Unlocking a locked-in Pension (RRSP)

[oldman]

The Dalton Love Hour

To: eileen@cfrb.com
Subject: The dalton love in hour

What a disgusting piece of tripe I heard on CFRB yesterday. I could not believe what went on. Back slapping Buddies IE: Sorbara, Bradley, and the hand picking of the easy questions,( and very few for that matter ), did it for for me. A real leader would not be afraid of the real questions, nor the real answers, but he just dodged every political issue that was important to your listeners. I speed dialed your show for the whole hour.This will have an effect on how much I listen to CFRB in the future. What a disgusting display of partisanship, back slapping hip hip Gee what a great guy I am Dalton Show. I could not believe a station like yours would allow such deceit , and the side stepping of the real important issues and questions in this election, that your listeners would have liked to put forth. A fed up listener. Philip James

 

[oldman]

Hi All;
Below is a article many of you may have seen in the paper.
I just wanted to let you all know information I have received about the Commision Concerning the Study.

Pension law to be revamped

Posted 4 hours ago

Finance Minister Greg Sorbara says Ontario's pension law is out of date and needs a facelift.
He says the province is looking at revamping its pension law and has asked the Ontario Expert Commission on Pensions to hold hearings over the next few months. Sorbara says Ontario's pension law was a leader when it was enacted in 1986 but has lost pace with other regions.
The commission will take written and oral submissions from pensioners, employees, plan administrators and other interested people.
Hearings are set for Kingston, Ottawa, Sudbury, Toronto, Windsor and Hamilton.
The study is the first review of pension law in 20 years.

Information I have received.

The last time we contacted the Ontario Expert Commission on Pensions, they told us that unlocking of pensions was not included in the study.

Bill Gleberzon of CARP is submitting a large brief to try and change their minds and have them include unlocking pensions.

Many Members of The Coalition of independent holders have sent in e-mail submissions.

I encourage all people to still write their Premier and MPP's to unlock locked-in pensions.

We have not given up on this issue.

Regards Bill C

 

[alexthegreat]

Unlock Federal LIF

Hi,
I assume that you have a Federaly Regulated Plan that you removed from your employer and transfered it to a RRSP LIF. If you go to my site I will tell you how to unlock the funds. I have done extensive research on this topic, and I am almost half way through my mission.
You will fing all the information you need. www.grundie.com/lif

Alex Grundie

Hi :

A friend asked me to put this in the forums
Anna can be reached through me at l6oldman@yahoo.ca
The first letter in my address is a small L

or can be reached directly by joining the group RRSP forum at Yahoo
http://ca.groups.yahoo.com/group/Locked-in_RRSP/

Any former Federal Civil Servants on the site?

Hi all
I'm a former Federal Civil Servant and former member of the Public
Service Alliance of Canada for 20+ years. I have a locked in pension. I
contacted the PSAC and have been given a contact name with whom I'll be
discussing potential political lobbying to unlock Federal pensions. If
you are interested in pursuing this with PSAC let me know. The more
complaints they get the better.
Thanks
Anna Pollock

 

[oldman]

Information on the 25% unlocking

Hi All;

Here is some information on the Unlocking of your 25% in January. We Will still be going after the 100%. We are just letting the party's reorganize after the election.

Keep encouraging people to sign the online petition ( I will be mailing it in again ) and also Please keep mailing the Premier and MPP's and our soon to be new Finance Minister.

Take Care , Regards Bill C


Changes To The Rules For Ontario Locked-In Accounts
On July 27, 2007, O. Reg. 416/07 under the Pension Benefits Act was filed. The Regulation makes numerous important changes to the rules governing locked-in accounts. The following are answers to some of the questions that are likely to arise as a result of these changes. For ease of reference, the questions are grouped under the following headings:

Overview of changes
Q: What are the key changes to the locked-in account rules?

A: The key changes are:

A new Life Income Fund (the "New LIF") is introduced effective January 1, 2008. It will provide more flexible payments and allow owners a one-time opportunity to withdraw up to 25% of the amount in the New LIF.

An option to directly transfer money from a locked-in account to an unlocked vehicle, a registered retirement savings plan ("RRSP") or a registered retirement income fund ("RRIF") is provided in certain situations.

Effective January 1, 2008, owners of locked-in accounts who are non-residents of Canada, as determined by the Canada Revenue Agency ("CRA") for the purposes of the federal Income Tax Act, may apply two years after departure from Canada to withdraw the money in their accounts.

The current Life Income Fund (the "Old LIF") and the Locked-In Retirement Income Fund ("LRIF") will not be available for purchase after December 31, 2008.

Q: Which changes come into effect as of July 27, 2007?

A:

Owners of Old LIFs are no longer required to purchase an annuity by the end of the year in which they reach 80 years of age.

Owners of Old LIFs will be able to continue their LIF after they reach 80 years of age.

Owners of Locked-In Retirement Accounts ("LIRAs") can now keep the money in their LIRA until the end of the year in which they reach the age of 71 rather than the end of year in which they reach the age of 69. This reflects a change made to the federal Income Tax Act.

Owners of Old LIFs and LRIFs can transfer the money in their accounts to a LIRA prior to the end of the year in which they reach the age of 71.

Changes that affect the Old LIF
Q: I currently own an Old LIF. Do I have to make any changes to it to comply with the new rules?

A: There is no need to make any immediate changes to your LIF as a result of the new rules. However, since an annuity purchase is no longer required, you can continue your LIF past age 80 and you can transfer the money to a LIRA until the end of the year in which you reach age 71.

Q: Can I still buy an annuity with money in my Old LIF?

A: Yes, at any age.

Q: Will there be any effect on the amount of the annual income payment from the Old LIF in 2007?

A: No. The minimum and maximum amounts for the annual income payment for 2007 were established as of January 1, 2007 and will not change.

Q: Will the new rules change the formula for determining the minimum and maximum amount of the annual income payment for the 2008 year?

A: No. The minimum and maximum for 2008 will be calculated using the same formula as in 2007.

Q: If I want to transfer money out of my Old LIF, to which vehicles can I make the transfer?

A: You can transfer money in an Old LIF to a LIRA until the year in which you reach age 71, to another Old LIF or to an LRIF before December 31, 2008, or for the purchase of an annuity. After January 1, 2008, you will be able to transfer the money to a New LIF as soon as financial institutions make the New LIF available.

Q: What are the differences between the Old LIF and the New LIF?

A: The New LIF will have another option for determining the maximum annual income payments and you will have a time limited option to withdraw or transfer to an RRSP or RRIF 25% of the value of the funds transferred into a New LIF.

Q: Can I withdraw or transfer 25% of the funds from my Old LIF?

A: No. The 25% withdrawal or transfer option is only available under the New LIF.

Q: What happens if I die while I still have my Old LIF?

A: Your surviving spouse is entitled to the full amount in your Old LIF in an unlocked lump sum as of the date of death. If you do not have a surviving spouse on the date of your death, your named beneficiary, or if there is none, your estate, is entitled to receive the amount in your Old LIF. Effective January 1, 2008, your spouse will have the option of transferring the full amount to his or her own RRSP or RRIF where permitted by the federal Income Tax Act.



Changes that affect the Locked-In Retirement Income Fund (LRIF)
Q: I currently own an LRIF. Do I have to make any changes to it to comply with the new rules? What happens if I do nothing?

A: There is no need to make any changes to your LRIF as a result of the new rules.

Q: Will there be any effect on the amount of the annual income payment from the LRIF in 2007?

A: No. The minimum and maximum amounts for the LRIF in 2007 were based on the amount earned by the LRIF in the previous fiscal year and will not change.

Q: Will the new rules change the formula for determining the minimum and maximum amount of the annual income payment for 2008?

A: The minimum and maximum for 2008 will be calculated using the same formula as in 2007.

Q: If I want to transfer money out of my LRIF, to which vehicles can I make the transfer?

A: You can transfer money in an LRIF to a LIRA until the end of the year in which you reach age 71, to an Old LIF or another LRIF before December 31, 2008, or for the purchase of an annuity. After January 1, 2008, you will be able to transfer the money to a New LIF as soon as financial institutions make the new LIF available.

Q: What are the differences between the LRIF and the New LIF?

A: You will be able to withdraw or transfer to an RRSP or RRIF 25% of the value of the funds transferred into a New LIF and one of the methods by which to determine the maximum annual income payment (the cumulative investment earnings since the inception of the LRIF) will be replaced by the maximum amount under the LIF formula. If you transfer from an LRIF to a New LIF, you will no longer be able to carry forward the unused portion of your LRIF. If you do not use up the unused portion of your annual income payment in a fiscal year before your LRIF becomes a New LIF, you will no longer be able to add the unused portion to the maximum amount you can withdraw in future years.

Q: What happens if I die while I still have my LRIF?

A: Your surviving spouse is entitled to the full amount in your LRIF in an unlocked lump sum as of the date of death. If you do not have a surviving spouse on the date of your death, your named beneficiary, or if there is none, your estate, is entitled to receive the amount in your LRIF. Effective January 1, 2008, your spouse will have the option of transferring the full amount to his or her own RRSP or RRIF where permitted by the federal Income Tax Act.

The New LIF
Q: When will the New LIF be available?

A: The regulation allowing for the New LIF will come into effect on January 1, 2008. After that date, financial institutions will be able to make the New LIF available to consumers once they get approval for their New LIF contract from the Canada Revenue Agency.

Q: Who will be able to purchase the New LIF?

A: An owner of an Old LIF, an LRIF, a LIRA, or a member of a registered pension plan who has terminated employment and is entitled to an immediate pension, or the member's former spouse, may transfer their commuted value to a new LIF.

Q: What are the significant features of the New LIF?

A: First, you will be able to keep the New LIF past age 80. If you took the maximum income payment each year, your New LIF would be exhausted by age 90, but if there are assets remaining in the New LIF at age 90, you may continue to keep it and withdraw income from it in subsequent years. Second, the maximum annual income payment will be the greater of the amount you could be paid under the formula in the New LIF (which is the same as the formula in the Old LIF) or the amount of investment earnings of the New LIF in the previous year. Third, you will be able to withdraw or transfer to an RRSP or RRIF up to 25% of the amount transferred into the New LIF.

Q: How will the 25% withdrawal work?

A: Owners of a New LIF will have the one-time option of withdrawing or transferring to an RRSP or RRIF an amount up to 25% of the total market value of the assets transferred into the New LIF. The transfer to a New LIF may be from an Old LIF, an LRIF, a LIRA, or from a registered pension plan when an individual who is entitled to an immediate pension terminates employment and is entitled to a transfer of his or her commuted value. However, the 25% withdrawal will not apply when assets are transferred from one New LIF to another New LIF.

Q: When will I be able to make a 25% withdrawal? How do I apply, and to whom?

A: The owner of the New LIF will be able to apply to the financial institution that issued the New LIF within 60 days from the date the assets were transferred to the New LIF. Application must be made on a form that is issued by the Superintendent of Financial Services. The form will be available in January 2008.

Q: What would happen if I failed to make the 25% withdrawal within 60 days? Is there another opportunity to make the 25% withdrawal?

A: If you do not apply to make the 25% withdrawal within 60 days of a transfer of funds into a New LIF, there will not be another opportunity to take advantage of this provision

 

[oldman]

Hi All ; This is a letter I just recently sent to Government. We are still working towards unlocking LIF's 100% in Ontario Regards Bill C

Dear Dalton and Members of Provincial Parliament ;

Congratulations on achieving a second majority victory.

I am writing you again to request that you take a serious look at the locked-in pension issue.

There is no logical reason that these pensions should be kept locked in. The statement your past Finance Minister gave on the Unlocking issue was ,

Quote " I don't think that this has any thing to do with protecting senior citizens from investors whether unscrupulous or not. It's about simply honoring the agreement the trust relationship between the employer and the employee at the time those funds were put in. "

I have talked with a few employers about the last statement about " honoring the agreement " .

Their response to that was , the agreement to provide , was a negotiation between the employer and the employed to provide a Pension for retirement. They did not feel that this pension should be locked in at retirement.

Many People were caught in this locked in Pension Scam .

I was one of them! I also have received hundreds of letters ,as I am sure You have ,that there are many people that were misinformed about these locked in pensions.

This is what happened to me.

When I was asked to join this pension plan in the 70's I was told that the employer would contribute 4% of my wage to a pension fund if I contributed 4% ( It was voluntary , some people did not join)

I was told I could contribute more if I wished as it would help to give me more money at retirement. I moved my contribution up to 10% thinking that this was a great way to save for retirement (( I was sure wrong on that thought ! ))

I faithfully put money into the plan believing how good things would be when I reached Retirement .

In the early 80's a financial planer from Standard Life ( The institution that looked after our fund )
told us about RRSP's and how they weren't locked in and how we would have complete control of them at retirement.

I then spoke up and said that we had best get out of our locked in fund then and invest in RRSP's (( everybody in our group agreed on doing this ))

The Planner then said " You don't have to make any change , If you quit before your normal retirement date . You will be able to transfer your funds into a RRSP "

The one important thing he didn't tell us was that it would be a Locked-in RRSP.

None of us therefore invested in a Unlocked RRSP.

Years later in 1999 a fellow worker decided to retire at 60. He left his job and applied for his retirement funds .
He then got the shocking news that he would be only able to basically withdraw $ 8000.00 for every $100000.00 that he had in his pension fund. (( His plan was still Locked-in )) Needless to say he had to go back to work.

When we seen what happened we immediately went to the employer and told him we wanted out of the locked in plan.
The Employer agreed saying that he also did not realize that the plan did not become unlocked at retirement.
We then started up a RRSP plan and the employer still put in their share of the money and we put in ours. The only thing that changes was the plan was not Locked in.

Changing the plan did not help many of us as some were already nearer retirement and I became disabled and was no longer able to do my Job.

Thank God I had invested in a RRSP for my wife and we were able to withdraw her funds as needed for the last 8 years or I would have lost everything that I had worked so hard for .

There are many people that I receive letters from that saved believing that they would be able to use these funds in their retirement as they wished.

They were misinformed by the financial advisers and led to believe that they would have full access to their funds. (( It Should be noted !! This is their Own Money and they took the Risks in investment ))

Will You Please tell me why your government will not unlock these funds for the seniors of Ontario!!

As I am sure You know that Saskatchewan has unlocked these funds 100% in 2002 for their Retired Seniors.

Manitoba has also unlocked 50% and is being asked to unlock the remaining 50%.

Alberta unlocked 50% and Now British Columbia is going to follow Alberta by unlocking 50% in it's Province.

Organizations such as Canada's Association For The 50 Plus , The Common Front For Retirement Security with 2 Million members across Canada , The Ontario Coalition of Senior Organizations ,
The Ontario Coalition of Independent Lif Holders. All back unlocking LIF's 100% at 55 years of age in Ontario.

Prominent People such as Professor Jack Mintz , Actuary Malcolm Hamilton , Financial Writer Gordon Pape .
All agree that Ontario should unlock LIF's 100% as Saskatchewan did for their Senior retiree's.

Please tell me what logical reason why the Government of Ontario feels that they should only unlock 25% instead of the full 100% of the Citizens own Money.

Bill Costello ,

 

[oldman]

A Christmas Letter to Dalton

Hi Folks:
This is a Christmas Letter sent to Dalton. Maybe You would also like to send one and ask Dalton to think of the Seniors in the New Year instead of acting like Mister Scrooge.

Merry Christmas And a Prosperous New Year Regards Bill Costello.

Hon Dalton McGuinty dmcguinty.mpp.co@liberal.ola.org Premier

Hon Dwight Duncan dduncan.mpp@liberal.ola.org Minister of Finance

Hon Aileen Carroll carrollaileen@yahoo.ca Minister Responsible for Seniors

Good morning Mr. McGuinty,

Once again it is Christmas time and once again it is time to remind you of the plight of seniors who hold Locked-In pensions.

The Legislative Hansard reveals that on December 15, 1999 you asked the following question of then Finance Minister Ernie Eves.

"My question is for the Minister of Finance. Minister, with reference to Bill 27, we have discovered deep down inside a delightful Christmas gift that you intend to give to a select group of MPPs in this Legislature. I want to make it perfectly clear in this House today that I and my party will have none of it. Your special provision says that MPPs are going to have special access to their pension funds. You're going to give a right to MPPs that none of the other 11 million Ontarians are going to be able to enjoy. Your new bill will allow some of our MPPs to have instant access to their pension plan at age 55 when you're going to give no other Ontarian that said same right. Minister, how can you possibly justify this double standard?"

Bill 27 to which you referred was called An Act To Amend The Pension Benefits Act And The MPPs Pension Act. It received Royal Assent on December 22, 1999.

Despite you personally having voted against Bill 27, as did other members of your Liberal party, your words of December 15th 1999, ... "I and my party will have none of it" ... have proven to be totally false.

In fact, just the opposite has turned out to be the REAL truth.

There were members from your own Liberal party who received extraordinary financial gain with respect to their pensions, despite having voted against Bill 27. Further, the person who received the most financial gain was none other than your former Liberal colleague, Mr. Sean Conway.

Mr. Conway's own words from the Legislative Hansard for December 13, 1999 were ...

"Make no mistake about it: Some of us, with names like Conway, Harris, Eves, Sterling, Runciman, are very substantially advantaged by a portion of this bill, and it is wrong that we should be so advantaged. ........... What we have here today, I say to my friends, in one particular respect is another sweetheart deal for a few members of this Legislature named Harris, Eves, Conway, among others. I want to make it plain. No one benefits more from this change than I do. It's a wrong thing for me to support. I would go even further and say it's immoral."

Today, Mr. Conway has unfettered access to over $1 million of pension money that had previously been designated as Locked-In pension money. Yet he said such exclusive privilege was both wrong and immoral.

Now, let us fast forward to Christmas 2006.

As reported in the CTV article below of December 21, 2006, you Mr. McGuinty, were initially opposed to the magnanimous pay raise that was being proposed for MPPs. However upon the final vote being taken, you ended up being a major recipient of this magnanimous pay raise.

Once again, MPPs, including yourself, received extraordinary financial gain just before Christmas. Once again too, you have profited from gains achieved, in some measure, on the backs of seniors who hold Locked-In pensions.

Where certain special MPPs in 1999 received unfettered access to their pension monies at age 55, monies that had been accrued entirely from within a defined benefit plan called the infamous MPPs gold-plated pension plan, you now have had the audacity to allow seniors unfettered access to only 25% of their pension money, with the full access being delayed until age 90.

As you well know, most seniors will not be alive at age 90 and as such will forfeit much of their hard-earned pension monies to the government in the form of estate taxes. Yet your fellow Liberal colleagues such as Jim Bradley, Sean Conway, Elinor Caplan and Tony Ruprecht, and the list goes on, who also may not be alive at age 90, get 100% unfettered pension access at age 55 and thus are able to enjoy their pension monies while still living.

It is these forfeited pension monies that are paying a portion of your magnanimous pay raise.

Also, the CTV article below makes reference to the fact the MPPs no longer have a pension plan. Such information from MPPs is flat-out deception of the public through semantics. Each MPP does have a pension plan. It is called an RRSP plan to which they now have unfettered access. What each MPP no longer has though, is membership in the former MPPs gold-plated defined benefit pension plan. Under relentless pressure from the public because of the inordinate pension benefits that politicians had bestowed upon themselves over the years, this plan was dissolved in 1995.

The 10 per-cent of earnings that is now being contributed to each MPP's RRSP plan is in part coming from seniors who own Locked-In pensions. These are the same people Mr. McGuinty, to whom you refuse to extend unfettered pension access privileges.

Mr. McGuinty, as you attend the Christmas recital at the school where your wife teaches, look around the room and see the number of grandparents that are there proudly supporting their grandchildren's efforts. Some of these grandparents own Locked-In pensions and as such are unable to enjoy the quality of life during their golden years that they deserve.

Why? The answer is quite simple. You are denying them unfettered access to their own hard-earned pension monies while they are living. Yet at the same time you demand that they pay for your magnanimous pay raises and your rich pension buyouts of 1999.

Your recent announcement of a national holiday in February is nothing but another example of a cruel shell game perpetrated in part against seniors. Everything costs, including your new holiday announcement and for sure it will be seniors with Locked-In pensions who will once again be asked to dig a little deeper.

Why is a lock on one's financial assets, especially seniors, only acceptable for ordinary Ontarians but not acceptable for you Mr. McGuinty?

As we await your Christmas message and hope upon hope that you don't find another way to award yourself another delightful Christmas gift, will you answer your own question as it relates to Locked-In pensions ... that is the question you asked of Mr. Eves back in 1999 that is still waiting for an honest answer today?

"How can you possibly justify this double standard?

I, along with hundreds of thousands of other seniors, await your answer.

Kenneth Elliott

 

[oldman]

Locked in Pension Survey

Locked in Pension Survey
Hi All;
This is a survey I would recommend filling out. It is being done in British Columbia and recomended by CARP. Every province that unlocks pensions helps us accomplish it in Ontario and Federal.
It does not matter what Province your pension is in or if it is Federal. Everybody can fill this out if they wish.
Please also send this on to anybody you know that has a locked in pension.

Regards Bill Costello


You're invited to participate in a survey about retirement planning and private pension plans.
Will your pension be there for you? •

Do you have a private pension


• Have you ever needed ‘instant access’ to your locked-in private pension funds?
• Would you like to have the option to ‘instant access’?
If you answered ‘yes’ to any of the above questions then we want to hear from you!!
Please find below a link to a survey about retirement planning and private pension plans. Survey results will be used by Simon Fraser University researchers to generate policy alternatives with respect to the locking-in of private pension benefits.
CARP is happy to help with the research and urges former private pension members to complete the survey as thoroughly as possible. This survey is voluntary and you can withdraw at anytime. Your responses are confidential and will not be distributed to third parties.
In clicking on the below link you are consenting to participate in this study:

http://www.surveymonkey.com/s.aspx?sm=1DGgy793z6lQC0QFeX40_2fA_3d_3d

We thank-you in advance for your contribution to this important research.

 

[oldman]

25% Unlocking Reminder and Info.

25% Pension Unlocking Reminder
Hi All ;

I am just reminding everyone who is going to be transferring the 25% out of their locked in fund into a RRIF or RRSP.

If You draw a income from your locked in fund during the year . Make sure that you transfer your yearly allowed income out of your locked in fund and put it aside in a account so that you can use it for income through out the year.

Do this((( BEFORE))) You transfer into a new LIF fund in order to draw your 25%.
If you do not do this you will not be able to draw from the NEW LIF until the next calendar year and would then have to withdraw from your 25% instead.

DO NOT just leave this up to your financial institution as we have found the advisers are not always fully informed of change..

Also Remember once you have transferred into a new LIF (((( You have only 60 days to make your 25% withdrawal . After that you have lost the opportunity. ))))

There have been new rules added to the FSCO web site since the New Year.

To check them out go here.
http://www.fsco.gov.on.ca/english/pensions/locked-inaccountchanges.asp#how25

Q: Is the maximum annual income payment amount in the first year of a New LIF calculated based on the original amount transferred into the New LIF, or is it calculated using the adjusted amount after a 25% unlocking withdrawal has been made? For example, a New LIF is purchased with $100,000 deposited into it from a LIRA on the date of purchase. Fifty days later, the owner withdraws 25%, which leaves $75,000 in the New LIF. Is the first year maximum annual income payment amount based on $100,000 or $75,000?
A: The maximum annual income payment for the first year is based on the balance of the New LIF at the start of the New LIF’s fiscal year, regardless of any amount subsequently withdrawn. In this example, the maximum would be based on $100,000.
(((((((Note, however, that if the money deposited into the New LIF came from an Old LIF, LRIF or another New LIF, the maximum annual income payment amount for the New LIF for that fiscal year would be zero.)))))))

WE are still going after 100% unlocking in Ontario as Saskatchewan did for their citizens in 2002.
If you are outraged how the Ontario government restricts the Retire's from (((Their Own Pension Money.))

((( This is Not Government Money.))) Please write to your Premier , Finance Minister , Minister Responsible for Seniors , And Your MPP and tell them you want these pensions unlocked 100%.

You All Take Care Bill Costello

 

[Georgetmacd]

Dear Bill Costello,
I am a Canadian resident presently studying in the United States on an F1 Visa. I left my employer after 25 years and will receive a pay out sometime this month in the approximate amount of 150,000. I am in desperate need of this money. I need to unlock it in order to live.
My employer registered the pension plan in the province of Ontario. I worked most of my career in Newfoundland (5 years) and Quebec (20 years). When I returned to school in August, 2007 I left from Quebec.
I have opened two locked accounts to receive my monies; one in Toronto, Ontario and the other in Quebec City, Quebec. I am told in Quebec, that I can only have a monthly pay out totalling approximately 1,500 per month.
What are my options? Can I have the money deposited in Ontario and then withdraw the yearly amount as allowed and then withdraw the 25% one time only withdrawal? I am in desperate need of advice as the financial advisors in Canada have not helped and I receive the money within a few weeks.
Regards, George

 

[Kreskin]

It shouldn't matter where your account is held. It matters under what pension act the locked-in funds are governed by. You can hold a number of locked-in accounts with different pension juridictions in one office in any province.

As for your Ontario LIRA, since it is not already in a LIF there is no existing withdrawal mechanism. The income is created when the funds are moved from the LIRA to a LIF. In this case, according to what is said about the new legislation, you have 60 days from the transfer from the LIRA to the new LIF to withdraw up to 25%. You can take it as cash, subject to withholding tax, or you can move it to a regular RSP and control the dispersal as you need it.

If someone had an existing Ontario LIF they could withdraw their yearly maximum then transfer the remainder to a "new LIF" and withdraw 25% from the new account within 60 days of the switch.

 

[oldman]

Dear Bill Costello,
I am a Canadian resident presently studying in the United States on an F1 Visa. I left my employer after 25 years and will receive a pay out sometime this month in the approximate amount of 150,000. I am in desperate need of this money. I need to unlock it in order to live.
My employer registered the pension plan in the province of Ontario. I worked most of my career in Newfoundland (5 years) and Quebec (20 years). When I returned to school in August, 2007 I left from Quebec.
I have opened two locked accounts to receive my monies; one in Toronto, Ontario and the other in Quebec City, Quebec. I am told in Quebec, that I can only have a monthly pay out totalling approximately 1,500 per month.
What are my options? Can I have the money deposited in Ontario and then withdraw the yearly amount as allowed and then withdraw the 25% one time only withdrawal? I am in desperate need of advice as the financial advisors in Canada have not helped and I receive the money within a few weeks.
Regards, George

Hi George;

First of I will let you know that I am not a Financial Advisor. I am just a ordinary citizen that is fed up with the way government refuses to let people have control of their own pension money.

If your pension money in Quebec is regulated by Ontario policies then you could have it transferred to Ontario and regulated under Ontario rules.

If the Pension money is regulated under Quebec regulations. You can still transfer it to a Ontario institution but it will have to remain under Quebec Regulations.

If they are both under Ontario regulations , you could transfer them to one institution. then remove your yearly withdrawel . Then when you transfer them to a new LIF with draw the 25% and put it into a RRIF. If you take the full amount out in cash you will be hit with a substantial tax.

Another Option you may have is that seeing as you are studying in the States , maybe you could move there as a permanent resident for 2 years.

If you live out of Canada for 2 years under Ontario Rules you are able to unlock 100%.
I dont know what the tax implications are but you should be able to find out from your financial institution.

I hope this has helped you a bit Regards Bill Costello

 

[oldman]

Hi Kreskin:

Quote [" As for your Ontario LIRA, since it is not already in a LIF there is no existing withdrawal mechanism. The income is created when the funds are moved from the LIRA to a LIF. In this case, according to what is said about the new legislation, you have 60 days from the transfer from the LIRA to the new LIF to withdraw up to 25%. You can take it as cash, subject to withholding tax, or you can move it to a regular RSP and control the dispersal as you need it. "]

Kerskin;
I am not 100% sure on this and George would have to talk to his Financial institution.

Seeing as a person does not have to transfer into a New LIF until the 31 of December 2008.
Wouldn't George be able to move his LIRA into A LIRF ,Set up to withdraw his Yearly income and then withdraw that income and then transfer into the New LIF and then withdraw his 25% within the 60 allotted days ?

Just a thought as I have said I am not a financial advisor.

It is too bad that this Ontario Government wouldn't unlock 100% as Saskatchewan did for their Citizens in 2002 .

It would be cheaper for the Financial institutions ( Less red tape ), Cheaper for Government
. Better for the economy.
Better for people that are having financle hardship. ( they wouldn't have to pay the Ontario government $200 - $600 to get at their hard earned pensions).

Regards Bill Costello

 

[confused2008]

I'v been mislead on my RRSP.

I have an RRSP with a financial company, very poplular one, you get freedom when your 55, so 14 years ago they took my pension they put it in an RRSP, I was told when my ex turned 55, I would be able to cash it out. This was my ex husbands work pension, I got half on our deviorce. I was mislead for 14 years that I could cash it out, I wasn't told how to invest, or any other options. I'm just wondering How many other people have their pensions with this company, and also are not told the their RRSPs are locked in with the Federal Goverment and they can only get 5% every month, mine comes to $40.00 per month, not much to live on. The only person making money of my RRSP is my financial consultant, when I approached him, he said he didn't know it was a Federal Pension, isn't that what he is there for to know these things, and advise me what to do, 14 years ago if he gave me advise I could have put $40.00 a month in another RRSP, and now I would have approx $7,000.
I lost not only my pension, $7,000 I could have been building up all these years, and what about all the interest my RRSP has gathered in 14 years. Plus this consultant gets commission on my RRSP for the last 14 years.
There must be some way to recover what is rightfully mine.
Please anyone with any comments, suggestions, or similiar situations please let me know.
Thank you for reading this, hopefully it will help other people.

 

[oldman]

Federal Pension LIF 50% Unlocking

--------------------------------------------------------------------------------

Hi All; I am just updating you on what is happening in case you haven't seen this. It is time to get after the Ontario Liberals again as now the Federal government has allowed 50% unlocking of Federal locked in pensions.

This is a letter I just received from Bill Gleberzon of CARP.
The 2008 Federal Budget has a number of good improvements for LIF-holders. The following paragraph is from our analysis of the budget:

"Choices for federally regulated Locked-In Fund (LIF) - holders, such as, for those 55 years or older, conversion of up to $22,450 into to a tax deferred saving vehicle as well as an one time conversion of up to 50% of the principal into a tax deferred savings vehicle with no maximum withdrawal limits – also the option to unlock up to $22,450 for those with financial hardship."

This is not only good for federally regulated LIF holders but for our campaign in Ontario as an enhancement that the Ontario Government should adopt -- from unlocking $25% to unlocking 50% as well as increasing the amount that can be unlocked to $22,450.


Key in to the Federal Department of Finance and go to The Federal Budget Index under LIfe Income Funds.

Regards Bill Costello

 

[harleyhunny]

All of the Provinces as well as the Federal Government have their own Rules and Regulations concerning Locked-in RRSPs. Probably only you people that have one would know what I mean.
There are only two Provinces that allow you to unlock these RRSPs (Sask. being one). Manitoba allows you to unlock 50% (once). Ontario allows ex MPPs to unlock theirs, but nobody else. The Federal Government is the most restrictive. Since we are ALL Canadians we should ALL be treated the same. Isn't that what we have a Constitution for? The new Federal Finance Minister is an ex MPP from Ontario, so can unlock his. This should be standardized across the country. Banks and other institutions don't know what rules to follow. Hundreds in Ontario lost money recently in a scheme to extract money that was locked-in. Are there any of you in this situation?

Nobody is treated equally in Canada, just ask the white man. We won't go there. I imagine the locked in rule is for your own protection. We have an excellent broker, quite well known actually, and yes we have a locked in RRSP until we turn 55 (husband got a buy out from his company that he worked for for 30 years) so our RRSP is substantially large, so it is all invested into various stocks etc. We do not want to pull out our money, we would rather scrimp than do that, it is making us awesome amounts of money. Don't quite understand all the ins and outs of this sort of thing, but learning as we go along, but we also pay this group well to look after us and they do. We are quite happy with ours and how it is working for us. I do know that sometime one has to take it out because they have no other choice. But if you do not have to don't, the taxes will kill you, not worth it.;-)

 

[harleyhunny]

Yes we lost a bit of money recently but nothing to get worked up over, as it is a long term deal. So we will get it back. But for some they lost a lot, I have a couple of friends who did, and do not talk to much about it. I think they have to keep it in longer now to get some money back.

 

[harleyhunny]

yes we lost a bit of money but our rrsp is long term so we will get that back. But if you were short term and lost, you may want to keep it in to get some of that back.

 

[oldman]

Hi Harleyhunny ;
(Quote) " yes we have a locked in RRSP until we turn 55 (husband got a buy out from his company that he worked for for 30 years "

I am just letting you know at this time . No pension becomes fully unlocked at 55 except for the Province of Saskatchewan.
Some other provinces and Hopefully in the near future Federal have partial unlocking,
As for the rest . You are allowed to draw out approximately 6% a year.

If a person is able to unlock their fund. This does not mean that those funds have to be removed from their current investment. The only things that change with unlocking is that if a person needs more then the 6% that the government regulates. A person will be able to access their own money and Not be restricted with government dictatorship rules.

Regards Bill C

 

[harleyhunny]

Hi Harleyhunny ;
(Quote) " yes we have a locked in RRSP until we turn 55 (husband got a buy out from his company that he worked for for 30 years "

I am just letting you know at this time . No pension becomes fully unlocked at 55 except for the Province of Saskatchewan.
Some other provinces and Hopefully in the near future Federal have partial unlocking,
As for the rest . You are allowed to draw out approximately 6% a year.

If a person is able to unlock their fund. This does not mean that those funds have to be removed from their current investment. The only things that change with unlocking is that if a person needs more then the 6% that the government regulates. A person will be able to access their own money and Not be restricted with government dictatorship rules.

Regards Bill C

Thanks Bill for the information but I don't think ours works that way, because at 55 we can either use that money to live on, or husband can continue to work until he is 60-65, and keep that money in and working. The money is ours to do with at 55 according to our broker. I don't quite understand the whole thing yet, I guess that is why we pay someone else to look after it, etc, and our interests as well. We have lots of stock and monies into all kinds of things.
How is happened was, that my husband worked for a company for 28 years, the company was bought out by another company (BC Rail/CN), he was given a 2 year salary and and extra 20,000.00 as an incentive to take the buy out (they wanted to rehire at cheaper wages so really did not want the seasoned workers), then on top of that they were given their pensions money (accrued over all those years) to put into a locked in RRSP, which he can use when he turns 55, we do not touch that money, we had the other put into a spousal rrsp's that we could draw from, and just an account for this purpose. We did not know too much about rrsp's and such when we got this money, (it was kind of scarey as it was a substantial amount of money, it was like winning the lottery only it was earned), so I got a broker to handle it all, and he does very well. We are still learning, but we are quite happy with the way ours is being handled. I am also glad that we have not had to touch that money,or need to.
Thanks again.

 

[oldman]

Hi Harleyhunny ;

I am sorry to tell you . unless you live in Saskatchewan . If your pension is in a locked in RRSP in Canada and no matter what your Broker tells you your pension will not become fully unlocked at 55 - 65 . in many cases. Not until you are 90 years of age , unless legislation is changed.
Why do you think My self , CARP the Association for the 50 Plus and many other people are fighting this issue across Canada for the last few year to change this unjust legislation?

As of now . Saskatchewan allows unlocking of 100% , Alberta 50% , Manitoba 50% , Ontario 25% , New Brunswick 25% .

The federal government is bringing in legislation to Unlock 50% if passed.

The only other way would be that your pension could be unlocked is if your pension is small , as many jurisdictions allowed unlocking of small amounts.

From your explanation of your pension. It sounds as if your pension will fall under Federal Legislation. You may be one of the lucky ones.

There are thousands of people in Canada that are not allowed to unlock more then 6% from their pensions at retirement , and as They Retire they suddenly realize that what we have been telling them is True.

It is really too bad that many people don't really look in to their pensions more thoroughly, as many of them get the shock of their lives when they retire.

Instead of drawing X number of dollars as they have planed on . They are only allowed to withdraw around 6%. then at approximately 80 if you live that long and markets are right there is still 64% of your funds in the Locked in plan. At that time if both the holder and the spouse have passed away the money will then go to their estate.

Great You say . The money will go to my Children.

Not so !!! When the money goes to the estate it is now taxed at the highest rate before it goes to your children.

You can believe this or not.

It is time the people right across Canada started looking into their locked in pensions and started mailing their Premiers ,Finance Ministers , MP's and MPP's and demand that these pensions be unlocked 100%.

IT IS YOUR MONEY. Money you worked hard for and should have the right to spend and save as you wish.

We do not need some government bureaucrat telling us how to handle our money when they cant even handle the tax payers money properly.

For further information go to http://unlockinglockedinpensions.blogspot.com/ or to the CARP web site . Click on LIF on the left side of the page(( The site is down now but should be up shortly ))

Regards Bill Costello