Unlocking Locked in Pension's ( LIF, LIRF, LIRA )

[Bill C]

Hi This is a Great article that Linda Leatherdale wrote.

http://money.canoe.ca/Columnists/Leatherda...533775-sun.html

Any wise politician knows this: Don't tick off the blue-rinse crowd.

Well, this powerful voter group is ticked off. Skyrocketing property taxes have them seeing red. So do gouging electricity bills that Queen's Park hit with a debt retirement tax, plus GST. And they're angry about a clampdown on their precious income trusts, thanks to the feds.

But here's an issue that really has them riled. Not allowing them access to their locked-in pension money. Their anger hits meltdown when they recall how MPPs were allowed total access to their pension money in 1999, when some $54 million was withdrawn from the old pension scheme, then topped up with $55 million from general revenues, for a total of $109 million funnelled into MPP RRSP accounts.

"It's disgusting how elected officials have this ongoing trend of continually taking care of themselves, while totally ignoring the rest of the electorate," writes Eva Cherwinski, one of thousands who've signed a petition demanding access to locked-in funds.

Here's how Ontario's pension laws work. Let's say you're 48, and you get the boot out the corporate door. Any money accrued in your company pension plan would be moved into a Locked-In Retirement Account (LIRA), and you're not allowed to touch the money until you're 55.

Problem is access is very limited, like only 6.7%. The older you get, the more money you can get at -- but not until age 90 can you take all your money.

James Law accuses Queen's Park of being "cruel."

He wrote that five years ago his mother was diagnosed with cancer and his father, then 68, had a sizable amount of money in a locked-in pension. His parents wanted to travel and enjoy the money while they could, but his father was denied access to the funds. His mother died two years later, and now his dad is gone, too.

"We, his children, did not want their money," Law said.

Recent changes to pension laws allow people facing financial hardships to get at the money. Also, you're allowed access if a doctor certifies you have less than two years to live.

In the past, regulators voiced concern if people had access they could blow the money and become dependent on low-income government programs. Others worried benefits, like the GST credit and old age credits, could be jeopardized, plus investors would miss out on extra value in vested pensions.

But Malcolm Hamilton, a pension expert with Mercer Consulting, says their worries are misguided. "Personally, I don't see (why) the protection is needed," he said, pointing out investors have access to their RRSP money and there is no evidence of irresponsibility.

CONVERT OR CASH OUT

RRSP funds grow tax free up to age 71, when you must either convert to a RRIF or an annuity, or cash out. Cash out early and you pay tax at your income tax rate.

The bottom line is Saskatchewan already allows 100% access to those 55 or older, Manitoba is soon to do the same, Alberta allows 50% at age 50, and New Brunswick 25%.

It's estimated one million Canadians have locked-in pension money, with 450,000 of them in Ontario.

"Why begrudge Ontarians the same right?" asks Bill Gleberzon, director of government relations with Canada's Association for the 50 Plus (CARP).

With only 12 days to the Oct. 10 Ontario election, the CARP, along with the Ontario Coalition of Independent Locked-In Fund Holders, is making this a political hot potato. This week, they went to Queen's Park to demand changes that would see those aged 55 be allowed to access 50% of locked-in funds, and at 65, 100%.

CARP has Conservative leader John Tory's support. He promises 100% access.

NDP leader Howard Hampton is also committed. In December 2006, NDP MPP Andrea Horwath tabled a private's members bill that would unlock funds.

With the heat on, Fiberal leader Dalton McGuinty was forced to introduce legislation to take effect in January 2008, that would allow people to transfer their current locked-in fund into a new locked-in fund, and be able to access 25% of the money within 60 days.

"Miss the 60 days, and you're out of luck," said CARP's Gleberzon.

Wanna fight back?

Go to www.petitiononline.com/WRC101/petition.html.

As Patricia Reeves argues, "It's our money, not yours!"

[Bill C]

Hi All ; This is a letter Ken sent to a Liberal MPP.

Good morning Mr. Kwinter,

Like your Liberal colleagues, both past and present ... Mr. Michael Brown, Mr. Michael Bryant, Mr. Sean Conway, Ms Caroline DiCocco, Mr. Bruce Crozier, Mr. John Gerretsen, Mr. Dalton McGuinty, and the list goes on ... you clearly understood the incongruity of Bill 27.

Your words from the Hansard for Thursday, December 9, 1999 are ...

" I haven't quite come to terms as to why there is a special provision for MPPs. What is the intent? I don't understand that.......... Why are we now singling out MPPs, and not only MPPs but a very small number who could have access to this provision?

In fact on that same day you went to great lengths to tell the Legislature that as a former Minister of Financial Institutions in 1986, you had introduced Bill 170, an Act to revise the Pension Benefits Act.

You said concerning Bill 170 ... "I would caution the members on the opposite side and the minister and the people in the ministry to make sure they have a coherent, clear rationale for why this is being done, particularly when you take a look at Bill 170, the bill I introduced on December 9, 1986, where there was absolutely no mention of MPPs, no mention of any particular group other than pensioners. It was totally universal across the whole field of pensions."

I have been asking you for some time ... are you a man of integrity . are you going to tell Ontarians the REAL and WHOLE truth behind Bill 27 . given that Mr. Bradley, Mr. Conway and 18 others from your Liberal party received totally unfettered, unlocked pensions ... pensions that had been previously locked-in ... and ... despite many members of your own party, including yourself, speaking strongly against such exclusive privilege . they accepted their unlocked pensions anyway.

As you are well aware, this same extraordinary financial privilege has never been extended to any other Ontarian.

Your recent offering of a one-time, 25% unlocking privilege of principal . full unlocking being available at age 90 ... is a cruel and vicious joke against Ontarians ... when compared to what Mr. Bradley and Mr. Conway received!

Does the word HONOURABLE before your name compel you to tell ALL the truth ALL of the time ... or does it simply mean an enhanced pay cheque ... a pay cheque that is paid in part by seniors who own locked-in pensions and who must submit to the vulgar restrictions imposed on their pensions by the Financial Services Commission of Ontario.?

Are you or are you not going to tell the WHOLE truth? You have been in power since 2003 and as such, have had ample opportunity to do so!

I again await your answer,

Kenneth Elliot

[ilovemycat]

Hi Bill

I questioned the Liberal candidate in my riding as to where he stands on unlocking LIRA's. He indicated to me that if returned to government the Liberals would unlock 100% of LIRA's. I suggested that the platform policy statement was silent on the issue of LIRA's and I had not heard any mention during the campaign. He said he learned about it during a conference call with candidates. Am I being snowed? Have you heard anything? If he is correct, then all 3 parties support unlocking 100% of LIRA's and all your work has paid off.

[Bill C]

Hi Bill

I questioned the Liberal candidate in my riding as to where he stands on unlocking LIRA's. He indicated to me that if returned to government the Liberals would unlock 100% of LIRA's. I suggested that the platform policy statement was silent on the issue of LIRA's and I had not heard any mention during the campaign. He said he learned about it during a conference call with candidates. Am I being snowed? Have you heard anything? If he is correct, then all 3 parties support unlocking 100% of LIRA's and all your work has paid off.

Hi Ilovemycat;

It's good to hear from you.

Yes You are being snowed. It looks like the Liberals are up to their usual tricks Lying to the People.

Promising them things that they have no intentions of keeping.

Do this date The Liberals have refused requests from all the Organizations to unlock pensions more then 25%.

I am sure if there was any suggestion of that at all they would notify us in order to get us off their back.

Sorry Ilovemycat , just another politician trying to get a vote.

Regards Bill Costello

Edited October 8, 2007 by Bill C

[Bill C]

Hi All; This part of the fight is just about over, the story will be told on Wednesday.

If the Liberals get in We will have a hard fight to try and have these pensions unlocked 100%

Anybody that wants these pensions unlocked had best get out and Vote for either the PC or NDP party because if not. Who Knows!!

Here is a letter I sent out to some papers in NW Ontario recently and some of my thoughts below it

Regards Bill Costello

Unlock pensions

Bill Costello

Wednesday, October 3, 2007 Dear editor:

An open letter to local Liberal candidate Mike Wood.

Why is it, when asked the question to all members if they would unlock locked-in pensions at the all-candidates’ debate on Kenora TV, that you immediately attacked Howard Hampton and his wife for having their pensions unlocked 100 percent when they retire at the age of 55 or their earlier retirement date.

Why didn’t you also state that 20 of your own party members also had their pensions unlocked—and many of them for a lot more money than Howard and his wife will receive when they retire.

We don’t begrudge the MPP's for having their pensions unlocked. This is the sensible thing to do.

We do, however, begrudge the fact that even though the Liberal leader spoke out in the legislature against it being done for the 61 special MPP's (including himself), that it was not fair because it was not done for the rest of the citizens in Ontario.

He now refuses to do it for the working people and seniors of Ontario.

Why is it that the Liberal party now only offers to unlock these pensions 25 percent and the remainder at 90 years of age? An age when most of the people already will have died!

Why is it that the Liberal party refuses to unlock 100 percent when the NDP and the Progressive Conservatives, plus C.A.R.P. (the organization for 50-plus) and experts in the field of pensions, such as Gordon Pape, Jack Mintz, and Malcolm Hamilton, all agree that these pensions should be unlocked 100 percent for the citizens of Ontario at their retirement age, as it was done for the citizens of Saskatchewan in 2002.

Why is it the Liberal party refuses to do the right thing? Especially considering that it would not cost the taxpayer one cent and also would improve the economy.

Why is it the Liberal party refuses, after being lobbied for two years, to do the honourable thing and unlock these pensions.

(Signed),

Bill Costello

Atikokan, Ont.

Editor’s note: Bill Costello is with the Ontario Coalition of Independent Locked-in Fund Holders

[Bill C]

Why will the Liberals not unlock our Personal Pensions

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

Hi All This is a note to a question I was asked. ( Why wont the Liberals unlock our personal pensions? )

My Reply

It Just doesn't make sense and I cant understand their thoughts because of these things.

A person that has a LIRF can invest their money and lose it all . ( they have no problem with that )

They allow the pension to be unlocked fully and transferred in to a RRIF If the pension holder dies and it goes to the spouse.

( I have no problem unlocking for the spouse) The Part I cant understand is if they can do that for one. Why cant they do it for two ? ( to me this doesn't make seance as the Plan Holder more the likely has more knowledge of the workings of the funds.

People like Jack & Malcolm & Gordon & CARP & Senior organizations endorse unlocking these pensions 100%.

Financle institutions say it would be better for them. ( Less paper work )

It would be better for the economy of Ontario.

Saskatchewan did it 5 years ago and Other provinces are following.

The people have been Asking for this to be done.

Greg Sorbara The Ontario Finance Minister Said "it is not to protect the people".

Greg Sorbara said "it was to protect the contract with the Employer " ( This Contract is no longer a contract when the plan is moved to a LIRF or RRSP ( The employer is no longer involved )

Is it that McGuinty and Company want to have power over the people of this province.

If there really a logical reason that they want to keep these pensions locked in.

I cant under stand it.

It would be sure nice if we could sit down face to face with the Liberals and let them logically explain why they refuse to unlock these pensions.

Regard Bill C

[Bill C]

CARP’s campaign to unlock locked-in funds in Ontario

Article By: Bill Gleberzon, CARP co-director of Government Relations

CARP campaigns to unlock locked-in funds 100 per cent for 450,000 Ontarians.

The primary objective of CARP’s campaign in conjunction with the Ontario Coalition of Independent Locked-In Fund Holders is to prompt the government elected on October 10th to unlock LIFs by 100% in Ontario as Saskatchewan did in 2002.

Our proposal is to allow LIF holders to unlock 50% at age 55 and the balance (or total) at 65.

Locked-In Funds are the best kept pension secret in Canada - and the most misunderstood. Therefore, the second purpose in our campaign is to make the estimated over 450,000 Ontario LIF-holders, the general public and the media aware of what a LIF is, how it works and the obstacles that currently await Ontario LIF-holders when they want to access their pension money. To achieve this objective a media conference was held at CARP’s National Office on September 26, 2007.

CARP’s position was supported at the media conference by:

- Canada’s preeminent tax expert Professor Jack Mintz, Joseph L. Rotman School of Management, University of Toronto (“… I don’t see why [unlocking LIFs] should be any less than 100 percent …from a public policy perspective.”)

- Actuary Malcolm Hamilton, World Wide Partner Mercer (“… we can conclude with great confidence that these [locked-in] rules aren’t doing anything constructive any more.”)

- With a message from financial author and publisher Gordon Pape (“I wish to strongly support CARP’s initiative to encourage the Government of Ontario to implement 100% unlocking of the assets held in LIRAs, LIFs and other types of locked-in plans.”)

- Ontario Coalition of Independent Locked-In Fund Holders members Philip James and Bill Nafziger provided personal testimony on the adverse impact of not giving LIF-holder access to their own money

- Bill Gleberzon, CARP’s Director of Government Relations, presented CARP’s case.

Their speeches and supporting documentation, including a letter of endorsement from Ontario Society (Coalition) of Senior Citizens’ Organizations and CARP’s unofficial list of 61 MPPs who accessed their Locked-In Funds 100%, are available on the LIF web page at www.carp.ca.

A precedent for unlocking LIFs 100% was set in Ontario in 1999 when 61 Ontario MPPs were enabled by legislation to unlock their Legislative pension by 100%. Some of these 61 MPP's are running in the current campaign, including Mr. McGuinty, Mr. Sorbara, Mr. James Bradley, Mr. Hampton and Mr. Runciman -- the later two have admitted publicly that they were among the recipients of this privilege. CARP does not begrudge these 61 MPP's the right to unlock their LIFs 100 per cent. But the Association does greatly begrudge them denying that right to all other Ontarians.

As a non-partisan association, CARP focuses on issues, not parties or personalities.

However, at this point in the current election campaign:

- the Conservatives have promised to unlock them 100%

- the NDP introduced a Private Members Bill in December, 2006 to unlock them 100% -- although the Party has not yet followed up by including that proposal in their platform

- the Liberal’s new policy to unlock LIFs by 25 per cent will take effect in January 2008.

CARP’s recommends that:

- if the Conservatives win the election, they must live up to their commitment to unlock LIFs by 100 per cent soon after forming the government.

- if the NDP are elected, we trust that they will implement the Private Members’ Bill introduced last December within a short period of coming to power.

- and, if the Liberals are re-elected, we urge them to do the democratic thing and unlock LIFs by 100 per cent. Or, at the very least, they should hold extensive public consultations across the province on their new policy of unlocking LIFs by 25 per cent to determine if that is what Ontarians want done—rather than establishing their new policy by paternalistic fiat.

To sign a petition on unlocking Ontario LIFs 100 percent, go to:

www.petitiononline.com/WRC101/petition.html

[Bill C]

DALTON MCGUINTY'S TIME ON AIR YESTERDAY

I know it is too late to change peoples minds about the people we are voting for , To Me it just shows how much disrespect the Liberal Government has for the people of this Province.

Below are a couple of letters sent out in disgust of what happened at a radio show that was to take call's to ask questions of the Premier.

Good morning Eileen,

Yesterday afternoon, Michael Coren admitted on air that Mr. McGuinty had not, as had earlier been promised to CFRB listeners, opened the phone lines to the Ontario electorate.

Not only did we witness another brazen example of this man's contempt for Ontarians, but CFRB went on to support such deceit by announcing that there would be a repeat broadcast later in the evening.

Your unwillingness to expose this man for what he is ... one who refuses to have open and honest dialogue with Ontarians ... a glaring example being his recent brush-off of the Ottawa cancer patient ... has left me wondering if there is even one member of the media (CFRB included) who values truth and moral decency any longer.

Taylor Parnaby, during his news broadcast on Friday, October 05, 2007, was musing over the proliferation of "spin" . half-truths, quarter-truths and outright lies ... that is handed to Ontarians daily and how difficult it is, even for him, to get honest answers to direct questions. He went on to say that one person from one of the political parties who has been regularly sending him "spin", will no longer be welcome in his office, once the election is over.

Why didn't CFRB immediately take Mr. McGuinty off the air when it realized there would be no open phone lines for listeners? After all, listeners were being encouraged by CFRB, right up to the last minute before the programme aired, to call in if they wanted to speak directly to the Premier.

Just disgusted ... this blatant manipulation of Ontarians by our politicians has to stop ... otherwise our vote is nothing more than an exercise in futility.

Kenneth Elliott

To: [email protected]

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

[Bill C]

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

[ScottSA]

Normally, I'd rather have people direct their own finances. The trouble of course is that far too many people will access their pensions, blow it in a year or two, and then look askance at the government (read taxpayer) to bail out the rest of their lives. If one would be willing to sign away Canadian government services to a degree equal to the previous amortized LIF payments, I'd be more than in favor of relaxing the rules and putting them in the same category as a RIF

[capricorn]

Normally, I'd rather have people direct their own finances. The trouble of course is that far too many people will access their pensions, blow it in a year or two, and then look askance at the government (read taxpayer) to bail out the rest of their lives. If one would be willing to sign away Canadian government services to a degree equal to the previous amortized LIF payments, I'd be more than in favor of relaxing the rules and putting them in the same category as a RIF

Yes, I suppose some people just can’t manage money. Just to be clear though, the legislation discussed here is unlocking 25% of the pension funds which only applies to Ontarians already drawing a pension from those funds, that is 55 years of age and older.

What about retirees who are living off their unlocked RRSP savings. If they dip into their RRSP funds or cash them in a lump sum, would they not also be tempted to blow it all and look for government handouts? Would you have those retirees pay an assignment for potential future government help as well? Or would you apply your proposal strictly to pensioners with locked in funds?

[Bill C]

Normally, I'd rather have people direct their own finances. The trouble of course is that far too many people will access their pensions, blow it in a year or two, and then look askance at the government (read taxpayer) to bail out the rest of their lives. If one would be willing to sign away Canadian government services to a degree equal to the previous amortized LIF payments, I'd be more than in favor of relaxing the rules and putting them in the same category as a RIF

ScottSA

The Pensions we are talking about here is the Peoples Own Money . If they should want to take it out and blow it. That should be intirely up to them. (( It wouldent be very wise to do as the Tax hit would be high.))

If people put money into these plans to be Comfortable in their years of retirement and decide to use it in their erlier years . That should be up to them.

Why Should these people have to sign away government services.

If somebody did without new cars etc. and put their money into a retirement fund for them selves. WHY SHOULD THEY BE TREATED DIFFERENT THAN THE PERSON THAT BOUGHT A NEW CAR EVERY FEW YEARS AND DRANK UP THEIR MONEY IN BARS AND DIDENT SAVE A PENNEY FOR PERSONAL RETIREMENT.

And as Capricorn Said are You also going to penalize people with RRSP's also. They also have the same tax benifits as a locked in fund, but have full access to their money.

Many of these locked in funds resulted from People in DFB Plans and loosing their job and the money was transfered into a LIRA . This money then no longer qulified for a company pension.

Other People as my self were in defined contribution plans where we contributed 50% or more into these plans and Were lead to belive by uninformed Financle Planers that these funds would become unlocked at 65.(( To this Day I am still finding about Financle Planers that still think that these plans become unlocked at 65)) ( This is not so !!!! a person is only able to draw from 6% to 11% on their princible and only become unlocked at 90.

Tell Me Why Logically, Why These Funds Shouldn't Be Treated The Same As A RRSP.

Bill C

[Higgly]

Bill C, thanks very much for your excellent posts on this subject! I agree 100% with you. These locked in retirement vehicles are ridiculous. That's why the MPPs unlocked theirs!

I haven't retired yet, and I have a locked in RRSP, as well as a regular RRSP. It is a complete pain and makes for very inefficient investing.

What is the status of locked in RRSPs at the moment? Any changes pending?

Thanks again. Good stuff.

[Bill C]

Bill C, thanks very much for your excellent posts on this subject! I agree 100% with you. These locked in retirement vehicles are ridiculous. That's why the MPPs unlocked theirs!

I haven't retired yet, and I have a locked in RRSP, as well as a regular RRSP. It is a complete pain and makes for very inefficient investing.

What is the status of locked in RRSPs at the moment? Any changes pending?

Thanks again. Good stuff.

Hi Higgly. Thank You. Ontario will be allowing a person to unlock 25% effective January 1 /08

You will have a window of 60 day's to do this when You retire and transfer your money into a New LIF.

The information is posted about 6 posts above this.

Take Care Bill C

[Bill C]

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 ,

[Higgly]

Bill C, this is a terrible tale. RRIFs should not be locked in, and neither should RRSPs. The fact that it was an insurance company that snookered you is very telling. Insurance copamies want to guarantee income for themselves while giving very poor guarantees to their customers.

[Bill C]

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 [email protected] Premier

Hon Dwight Duncan [email protected] Minister of Finance

Hon Aileen Carroll [email protected] 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

[Bill C]

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=1DGg...FeX40_2fA_3d_3d

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

[Bill C]

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...anges.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

[capricorn]

So far, I have found the following financial institutions that offer the new Ontario Life Income Fund that provides the once in a lifetime opportunity of unlocking 25% of the value of locked in pension funds.

Royal Bank Insurance Co.

http://www.rbcinsurance.com/files/00112/file-112392.pdf

Scotia Capital

http://www.scotiabank.com/images/en/filespersonal/17224.pdf

Canadian Western Trust Co. (Aetna Trustee)

http://www.steadyhand.com/Asset/iu_files/Forms/LIF_ON.pdf

Standard Life

http://advisors.standardlife.ca/en/pdf/mut.../forms/6254.pdf

Manulife

https://hermes.manulife.com/canada/wmInvest...inv_OntLIFChges

If anyone comes across any others could you post them here? Thanks.

[Bill C]

Thanks Capricorn; I have had a few people inquiring what places were offering to unlock.

Apparently there are some places that are dragging their feet. One person was even told maybe late fall.

On another note . If a person is in the stock market it doesnt look like a very good time to take out your 25%. We do have until the 31st of December /08 to buy into a New LIF and then from what I understand 60 days there after to draw the 25%.

At any rate if a person is withdrawing now . Have a good talk with your institution Advisor.

Also please remember that if you are currently taking income from your current fund . Remove your allowed amount for this year as a person is not allowed to withdraw from the New LIF until the next calendar Year.

Regards Bill C

So far, I have found the following financial institutions that offer the new Ontario Life Income Fund that provides the once in a lifetime opportunity of unlocking 25% of the value of locked in pension funds.

Royal Bank Insurance Co.

http://www.rbcinsurance.com/files/00112/file-112392.pdf

Scotia Capital

http://www.scotiabank.com/images/en/filespersonal/17224.pdf

Canadian Western Trust Co. (Aetna Trustee)

http://www.steadyhand.com/Asset/iu_files/Forms/LIF_ON.pdf

Standard Life

http://advisors.standardlife.ca/en/pdf/mut.../forms/6254.pdf

Manulife

https://hermes.manulife.com/canada/wmInvest...inv_OntLIFChges

If anyone comes across any others could you post them here? Thanks.

[capricorn]

On another note . If a person is in the stock market it doesnt look like a very good time to take out your 25%.

I doubt that anyone over 50 would have risked pension income with the stock market. The risk is too high. I have kept mine in a GIC plan and although the interest rate is low the capital is guaranteed not erode.

We do have until the 31st of December /08 to buy into a New LIF and then from what I understand 60 days there after to draw the 25%.

At any rate if a person is withdrawing now . Have a good talk with your institution Advisor.

Most financial advisors I know don't want you to unlock your funds because it reduces the amount of money they can invest on your behalf which cuts into their commissions.

Also please remember that if you are currently taking income from your current fund . Remove your allowed amount for this year as a person is not allowed to withdraw from the New LIF until the next calendar Year.

This is done automatically under Ontario pension regs, no? Example, if I purchase a new LIF tomorrow from a new company, the old company must remit my remaining withdrawal for the remainder of the year until Dec. 31, then my regular payments won't kick in until the following Jan. 1.

[Allison]

Do anyone know who I would have to contact, or any information on how to unlock a Federal Pension Plan, I just found out today that my pension which is sitting in an RRSP at London Life, is locked in forever, and I will get $40.00 a month to live on.

Any information would be greatly appreciated.

Thanks

Allison

[capricorn]

Allison, it depends on your age. Are you under the age of 45? If you are, I believe you can withdraw the entire amount of your contributions. If you are over the age of 45, different rules apply and yes, the funds could be locked in. I suggest you contact London Life and discuss your situation with them.

[cardshark]

Where does this leave us with dcpp's