Normally when transferring between Life Income Fund (LIF) plans the receiving LIF cannot make any payments in the year of transfer. There is no legislative requirement for the transferring institution to make that maximum payment, only to satisfy the minimum payment prior to the plan's closure. Therefore you should ensure when initiating a transfer-in from another LIF your member has received or asks to receive the maximum payment prior to transfer.
The only exception to this is under the PBSA 1985 jurisdiction which does allow for “double dipping” of the maximum payment when an annuitant transfers from a LIF to a Restricted LIF (RLIF) in order to facilitate the 50% unlocking allowed at age 55 or later.
Example: Joe (age 61) has a PBSA 1985 LIF worth $85,000 with a 2010 maximum payment of $4,921. In late January Joe requests to have his LIF transferred to a RLIF so that he can apply for the 50% release. Prior to the transfer, the maximum payment of $4,921 is made and, upon completion of the proper form, the LIF ($80,079) is transferred to a RLIF. On the date of transfer the maximum payment for the RLIF is calculated - $4,636 - though the actual payment is NOT made. Joe and his spouse complete the applicable forms to request the 50% release of funds based on the plan value of $80,079. $40,039.50 is transferred to a regular RRIF for Joe from which any payment stream can be chosen. His RLIF will have a remaining balance of $40,039.50 and will make a 2010 maximum payment of $4,636.
As a result, in 2010 Joe will receive a maximum LIF payment of $4,921, a maximum RLIF payment of $4,636 and a RRIF payment of his choice from the $40,039.50 unlocked. His 2011 RLIF maximum payment will drop substantially as it will be based on a plan value of approx $35,500 which is less than half of the value he started with at the beginning of 2010.