Larissa Dundon values her independence. After quitting her corporate gig five years ago to launch her own communications firm, she can’t imagine ever returning to a nine-to-five. Not even a coveted defined-benefit pension is enough of a lure.

“I have way more potential earning power, and I control where I want to go,” said the 37-year-old Vancouverite. “The payoff of having a pension isn’t worth it.” She saves for retirement in her registered retirement savings plan and tax-free savings account and considers herself fortunate that her husband has a pension.

But, she said, if someone offered her better retirement security that wouldn’t compromise her freedom as a small-business owner, she certainly wouldn’t say no. “If I had a standard amount coming in every month, I could supplement it and budget around that base.”

Experts say a recent change in federal pension rules suggests a way of giving Ms. Dundon and other Canadians like her access to reliable lifetime income in retirement, but they note that the new regulations will have to be greatly loosened before most people see any benefit.

The change came last year, when Ottawa passed budget legislation that allows people with defined-contribution pension plans and pooled registered pension plans to participate in what are known as variable payment life annuities (VPLAs). Though it will take some time for VPLAs to become available, the option will allow some retirees to exchange some or all of their retirement savings for monthly income.

When someone purchases a VPLA, their funds are pooled with those of other participants and invested in a combination of stocks and bonds. VPLAs are intended to be similar to DB pensions, with an important difference: While a DB pension provides a guarantee of the same monthly amount until the holder’s death, a VPLA payout can vary annually depending on investment performance.

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