The Canadian Department of Finance has announced regulatory changes now in effect allowing Canadians to take advantage of Budget 2008 improvements to the administration of Life Income Funds (LIFs). The Department also released questions and answers relevant to the changes and a Regulatory Impact Analysis Statement.LIFs hold investments stemming from federally regulated pension plans. Budget 2008 significantly enhances the flexibility to withdraw funds from LIFs through three provisions described below, which are now operational.Individuals 55 or older with total holdings in federally regulated locked-in funds of up to $22,450 will be able to wind up their accounts or convert to a tax-deferred savings vehicle with no maximum withdrawal limit, such as a Registered Retirement Income Fund or a Registered Retirement Savings Plan (RRSP). Individuals 55 or older will be entitled to a one-time conversion of up to 50 per cent of LIF holdings into a tax-deferred savings vehicle with no maximum withdrawal limit. All individuals facing financial hardship (e.g. low income, high disability or medical-related costs) will be entitled to withdraw up to $22,450 a year. Budget 2008 further unveiled a new personal savings vehicle. The Tax-Free Savings Account is a flexible, registered, general-purpose account that will allow Canadians to watch their savings grow, tax-free. This new initiative will help Canadian seniors stretch their retirement savings further since capital gains earned in the plan will be exempt from any tax, even when withdrawn. The regulatory LIF changes also provide individuals facing financial hardship who have locked-in RRSPs that are subject to federal pension rules with the ability to withdraw up to $22,450 a year. Financial intermediaries will be required to include these provisions in all new LIF and locked-in RRSP contracts that are subject to federal pension rules under the Pension Benefits Standards Act, 1985. Individuals with existing contracts who wish to avail themselves of these provisions should discuss the required procedures with their financial institution or advisor.