First remember to check for recent changes to various Pension Benefits Acts as many jurisdictions are now proposing more relaxed rules with regard to access to locked-in funds.
BUT, if you find that you still have funds that are locked in, there are a couple of strategies you can use to unlock some or all of those funds:
TWO STEP TRANSFER TO A REGULAR RRSP
If you have reached the age where you can convert your LIRA or LRSP to a locked-in account that allows for withdrawals (usually 55), but you are not yet ready to retire then you may be a candidate for this strategy. You can simply elect to take the maximum permitted withdrawal from the locked-in account and then make a corresponding contribution to your RRSP account. The tax payable on the locked-in account withdrawals will be offset by the contribution to your RRSP. This will essentially unlock a portion of your locked-in account. Do this as much as you can and you will have more and more flexibility with your retirement income later on.
I call this a "two step transfer" as you cannot just transfer funds from a locked-in account directly to a regularly registered account. You have to perform the transfer in two stages: One to withdraw the funds from the locked-in account, and a second to contribute to an RRSP.
A few caveats though: You will need to have the RRSP contribution room available to make the RRSP contributions, and you will also have to understand that you will be losing that RRSP contribution room as you use it. So if you have a large amount of RRSP contribution room available and it doesn’t look like you’ll be able to use it all up in your lifetime, you can use this strategy just fine. If you are maximizing your RRSP – you won’t be able to do this.
SMALL PENSION VALUES MAY NOT NEED TO BE LOCKED-IN
Again, you will have to check with local legislation, but if the total value of all your locked-in accounts is below a certain limit (for example $17,480 for 2007 in Ontario) you may be able to withdraw all the money in ONE LUMP SUM once you reach 55. You will have to fill out a special form – and certainly be sure to forecast the effect on your taxes with a qualified advisor! If you have RRSP contribution room you could put it right back into an RRSP to cancel out the tax on the withdrawal. In this case, you will have completely unlocked your locked-in retirement funds.
The same warning applies as above – you will be using up RRSP contribution room so be sure that you don’t unintentionally handcuff yourself by engaging the strategy and foregoing the ability to contribute to your RRSP in the future.