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

[Bill C]

Hi I received this letter from a friend and he said I could post it.

Hi all,

We appear to be gaining momentum across the province as per an article in the Toronto Sun.

MPP Andrea Horwath introduced private members bill 175 to unlock locked in pensions just prior to Christmas which may/may not pass but will highlight this social injustice for Ontarians. Bill 175 is strongly supported by CARP (Canadian Association of Retired People) with over 200,000 members in Ontario alone.

Recently the Stratford Beacon Herald featured an article on locked in pension funds and a television interview on the A channel resulted in phone calls requesting further information and offers of assistance.

Please support Ontarians across the province lobbying to unlock locked in pensions by:

- accessing the petition on line (search for “petition to unlock locked in pensions”) on line and have interested people sign it on line including their comments which Andrea can present to the legislature on a continuous basis

- write/email a letter to the editor of your local newspaper requesting the Ontario Government to unlock your pension money

- visit, phone, email, write a letter to your MPP including their leaders urging them to unlock locked in pensions (search “MPP followed by your MPP’s name to get their email address, etc.)

email : Dalton McGuinty [email protected]

Minister of Finance [email protected]

Minister Responsible for Seniors [email protected]

John Tory [email protected]

Howard Hampton [email protected]

MPPs across Ontario are becoming aware of the locked in pension equity which was unlocked for MPPs using Bill 27 and which 61 MPPs of all parties took advantage, costing the Ontario taxpayers in excess of $20 million.

The current Minister Responsible For SENIORS in Ontario is Liberal MPP Jim Bradley who took advantage of Bill 27 at the public trough to unlock his locked in pension. MPP Bradley’s silence on the unlocking your pension money reflects political integrity at its worst level. Are MPPs more competent that you are to handle your pension money?

The provincial election slotted for October 4 may make the MPPs receptive.

Best Regards,

Bill Nafziger

[Jerry J. Fortin]

Correct me if I am wrong here...

I would think that if a person wanted access to locked in funds that they could simply move those funds to an account in a tax haven such as the Cayman Islands. Once those funds were transfered to that juridictions would they then not be free from Canadian regulations?

Reading the thread I realized that this particular discussion has some direct application to me. My employer recently changed our pension plan rules arbitrarily and has now removed an option that used to be available to any participant in the plan. It was described as a vested employee option where a member of the plan could gain access to all funds in a lump sum fashion following a formula that provided an equal monetary value if those funds were either recieved in a single payment or paid monthly until death. At least the formula accounted for an average life span of 78.5 years, so the lump sum payout woud equal 23.5 years of pension provided that the funds were not diluted and included calculated interest for the same time frame. In other words it would work out the same, if you didn't spend the money for 23.5 years! The idea being that the company, and the pension plan would save money doing it this way.

The unions are trying to get this option back, and we have some realistic hope that we will prevail based on recent rulings in Canadian courts. If we do get it back, I am tempted to take adantage of this option. My plan would be to put the locked in funds into a Canadian bank that had international branches, then transfer my account to a tax haven, because my plan calls for me to have to pay to see snowflakes upon retirement anyway! Once both those locked in funds and myself were out of the country, I have no idea how the government thinks it can still have juridiction over me and my money. I am hoping that somebody on this forum knows how this convoluted system actually works and can provide some insight !!!

[Bill C]

Hi Jerry;

Quote "I would think that if a person wanted access to locked in funds that they could simply move those funds to an account in a tax haven such as the Cayman Islands. Once those funds were transfered to that juridictions would they then not be free from Canadian regulations? "

The way Ontario has it set up it doesnt matter if You move out of country or become a citizen of another country. They say that if You have a locked in pension in Ontario that it has to be governed by Ontario rules and that You can not unlock it. I would imagine that they wouldn't allow You to transfer money into a account that they have no control over. Also if it would be possible a person would get hit with one lump sum of tax which would be at the highest rate.

Regards Bill Costello

[Bill C]

Hi This is a letter we received from CARP

Quote "I had my meeting yesterday with Mr. Sorbara's Special Policy Adviser who told me that ministry officials have already begun to look at LIFs because they have received a lot of correspondence on it. So, I suggest that you tell everyone you know to contact Mr. Sorbara about the subject. The Special Policy Adviser, whose name is Koddermann, said he'll get back to me when the bureaucrats are finished their review."

Besides contacting Mr. Sorbara [email protected]

You can also sign the online petition at

http://www.petitiononline.com/WRC101/petition.html

I send this to all of the members of the legislature a number of times

Thank You Bill Costello

[Bill C]

CARP’S POSITION ON UNLOCKING LIFE INCOME FUNDS/ LOCKED-IN FUNDS (LIFS)

January 16, 2007

CARP’S REQUEST:

The Liberal Government supports Bill 175 which would permit unlocking 100% of the principal in a LIF. The Bill was introduced in December 2006 by Andrea Horwath (NDP) and supported by Bob Runciman (Conservative).

THE ISSUE:

When Joe Smith retired from work he was able to roll his portion of the company pension into his personal RRSP as a LIF or Locked in Registered Fund (LIRF) or Locked-In Registered Account (LIRA) – different names in different provinces for the same financial instrument.

Because Joe lives in Ontario, he can access the principal in his LIF only if he can prove a dire financial or health crisis to a group of bureaucrats in the Financial Services Commission of Ontario (FISCO). Joe will have to fill in a 23-page document to make his case for unlocking his LIF. If successful, he will have to pay a fee of $200 to $600. Between April 2003 and March 2006, 29, 821 Ontarians applied to FISCO for this purpose. Of them, 26, 296 were approved, 3,525 did not complete the process and 52 were denied access to their own money.

CARP’S RATIONALE:

Such a reform will not cost Ontario a penny! In fact, the Province will realize greater revenue from income and sales taxes when individuals are able to withdraw their LIF principal. This will increase their purchasing power which, in turn, will stimulate productivity and employment. As well, the quality of life for LIF holders will be greatly enhanced.

ONTARIO PRECEDENT FOR UNLOCKING LIFS:

In 1999, Bill 27 enabled 61 Ontario MPPs to access 100% of their occupational pension. Mr. Runciman was among them. These individuals came from all parties.

UNLOCKING LIFS IN OTHER PROVINCES:

In Saskatchewan, 100% can be withdrawn; in Alberta the amount is 50%; in Manitoba 50% with another 50% to come; in New Brunswick, 25%. Federal legislation allows those in federally regulated industries to withdraw 100% of principal at age 90.

DISPOSITION OF LIF PRINCIPAL AT DEATH

LIF principal can continue to grow during retirement. Upon death of a LIF- holder according to LIF-holder Bill Nafziger:

“[Mr. Nafziger estimates that] a LIF or an LRIF would allow me access to ¼ to 1/3 of my total pension fund during my lifetime.  The remaining [balance of the LIF principal] would go to my estate/spouse after my death completely unlocked.  Upon her death, the remaining [balance] would be considered income in one year and severely taxed by Revenue Canada.”

CONCERNS AND RESPONSES REGARDING UNLOCKING LIFS

In discussions on the issue of unlocking LIFs with some Ontario politicians and bureaucrats, the following concerns were raised. (It should be noted that some bureaucrats did not know what LIFs were.) As well, a recent article by Linda Leatherdale, Money Editor for The Toronto Sun, quoted retired financial columnist and financial adviser Bruce Cohen on some other concerns. Following each concern is CARP’s response.

Concern: Squandering Pension

If Joe is given access to his LIF principal, he will squander his pension and eventually become “a ward of the state.”

CARP’s Response

This is paternalistic attitude based on prejudice and stereotyping rather than a shred of evidence. When CARP asked the Ministries of Finance in Saskatchewan, Alberta, Manitoba and New Brunswick whether they

had heard about individuals getting into financial hardships due to unlocking their Locked-In Funds, they stated that they had no information about this because they had not looked into it nor had heard anything about this sort of thing happening. Moreover, there are no similar objections to enabling individuals having access to the principal in their RRSPs or RRIFs.

Concern: Unfair to Others

One objection raised to unlocking LIFS, is that allowing access to principal would be unfair to those who opt to allow their pension to remain in their corporate or occupational pension.

CARP’s Response

People should have the freedom to choose for themselves the course of action that they believe will best improve their independence and quality of life. In other words, they should be able to decide whether to maintain their portion of their corporate or occupation pension with the company or occupation or roll it over into their own RRSP.

If Joe rolls over his portion of a corporate or occupational pension into his RRSP as a LIF, he will assume the risk of growing this pension. Accordingly, he merits access to the fruits of their labours – that is, full access to the LIF principal that he has grown. At the same time, his decision to assume the risk absolves the corporation or occupational entity of any liability as well as reduces the entity’s pension-related expenses.

Concern’s: Break Contracts

Some opponents to unlocking Locked-In Funds argue that individuals accepted a contract that obliged them not to access LIF-principal.

CARP’s Response

Alberta, Saskatchewan, Manitoba, New Brunswsick and the Federal Government, as well the Province of Ontario in 1999, did not find this to be a barrier to unlocking LIFs for all or some of their citizens.

Furthermore, CARP has heard from LIF-holders such as Mr. Bill Nafziger that the advice on LIFs he received from the human resources specialist at the company where he worked as well as from financial advisers he consulted made no mention about not being about to access the principal in a LIF.

Concern: Impact on Defined Benefit Pensions

Unlocking LIFS will impact adversely on Defined Benefit Pensions

CARP’s Response

Many Defined Benefit Pension do not permit the rolling over of pension funds into an individual’s RRSP as a LIF.

Moreover, corporations are moving away from Defined Benefit Pensions (DBPs) to Defined Contribution Pensions (DCPs) which are akin to RRSPs. The objective of this shift in pension policy is to absolve the corporation or occupation of the responsibility and costs of ensuring payment of future defined pension income. This development has no relationship to LIFs.

Concern: Adverse impact on Low-Income Seniors

If low-income seniors retained their unlocked LIFs, they might not be eligible for federal and provincial benefits such as GIS, GST rebates because it could generate too much retirement income.

CARP’s Response

When the insurance companies demutualized, the Federal Government passed special legislation to protect low-income seniors who might get a one-time payment as a result of this action from adverse impacts. Similar legislation could be passed in this instance.

Moreover, there is no evidence that this has happened in those provinces that have unlocked LIFs.

Concern: Creditors

If the LIFs are unlocked, the funds could be vulnerable to seizure by creditors.

Response

This assumes that the unlocked funds would be totally removed from the LIF. Rather, they will be transformed into Joe’s RRSP, which is protected from creditors.

[Bill C]

Senior seeks support for changes to legislation

regarding retirement savings

by Grant Fleury

… as printed in the Northern Life newspaper Wednesday January 24, 2007

I am writing this letter to inform the holders of LIRA, LIF or LRIF types of retirement accounts of the inadequate maximum limits you will face when you qualify to withdraw from these plans and of the injustice that you received from your provincial government regarding legislation it passed for it’s MPP’s contained in Bill 27 in 1999.

This Bill contained an exclusive provision which allowed all MPP’s to fully transfer their former pension plan assets into their RRSP’s, essentially bypassing the very rules and legislation they continue to impose on the rest of us.

LIRA stands for Locked In Retirement Account. LIF’s and LRIF’s are subsequently created from LIRA’s when one reaches the qualified age (usually 55) and chooses to begin to withdraw from the money contained in the account.

There are hundreds of thousands of Ontarians who are in possession of these locked-in retirement accounts. The number of these personal locked-in retirement accounts are growing steadily as more companies are getting out of providing defined benefit pension plans.

A large majority of LIRA accounts were primarily created as a result of former collapsed pension plans, pension plan wind-ups or employees leaving a company’s pension plan where monies earned by each plan member were then transferred into a Locked-In Retirement Account as legislated by the provincial government.

Once you reach retirement age (or 55) and you want to withdraw some of this money, the LIRA account must then be converted to either a LIF or LRIF. These names stand for Life Income Fund (Locked-In Fund) or Locked-in Retirement Income Fund. There are marked differences between the two but they are both locked-in and full access is restricted.

The existing legislation, supported by the current Liberal government of Ontario, regulates and prescribes the maximum amount of money it's plan-holders can withdraw annually from these LIF or LRIF plans. The current formulas used to arrive at these upper limits are grossly insufficient to meet the needs for a decent standard of retirement living. The prescribed table for LIF’s and formulas used for LRIF’s can be found at the Financial Services Commission of Ontario website located at (www.fsco.gov.on.ca).

Most, if not all of the people I talk to about this exclusion have no knowledge of this special exemption from the legislation that was created for these MPP's. They also aren't aware of the prohibitively low limits to access of their own money that they will face when they qualify to retire and begin to withdraw from their nest egg.

I have written to every level of government in this province regarding this incredible injustice. All have essentially brushed me off. It’s no wonder, since they’ve already taken care of themselves, why bother with the rest of us. The current ruling Liberal party, who’s leader, back then, openly criticized the “double standard” in the Ontario Legislature, has remained silent and done nothing to correct and create a “single standard for all Ontarians”.

When their pension plans were eliminated and wound-up in 1999, a special provision in this Bill was created to allow themselves to fully transfer 100 percent of their contributions from their terminated gold plated pension plan over to their personal RRSP’s. And as we all know, RRSP’s have no locks or maximum withdrawal limits for future withdrawals. This was done ONLY for themselves and as quietly as possible so as not to attract media attention or public scrutiny.

The current legislation is even at odds with Stats Can's life expectancy of 77.2 years for a male as it uses 90 years in all their formulas to calculate the maximum withdrawal limits! Also, according to Stats Can, there is less than one-half of 1 percent of people alive at 90. Most of us will never live to 90 and thus never see the greater percentage of the remaining money in our locked-in plans!

This current legislation must change! On December 13th, 2006, a Private Members Bill 175 was introduced at the Ontario Legislature by Andrea Horwath, MPP for Hamilton East, who has decided that the government has it wrong.

This Bill is an act to amend the Pension Benefits Act to allow the transfer of 100% of locked-in pension funds to a RRIF(Registered Retirement Income Fund) thus eliminating the maximum limits to access of your retirement accounts currently imposed by the existing legislation.

This action was primarily initiated by Bill Costello (private citizen) and driven and fully supported by various people including myself, Bill Nafziger (private citizen), CARP (Canadian Association for the 50 Plus) with a membership of 400,000 and many others in Ontario interested in changing this outdated legislation. We are all demanding that all Ontarians have the same equal opportunity to fully unlock our LIRA’s, LIF’s and LRIF’s as the MPP’s did for themselves in 1999. On January 16th, CARP presented a LIF brief to the special assistant for Greg Sorbara (Minister of Finance) requesting full unlock provisions for all Ontarians. This can be found on their website at www.carp.ca. Search for “LIFS” - identified as items 22 to 24.

As equally stated by CARP, holders of LIRA’s, LIF’s and LRIF’s are urged to communicate with your MPP, Mr. Sorbara, Mr. McGuinty and the leaders of the Opposition parties to express your support for the passage of Bill 175 insisting that the locks be removed from your locked-in retirement money. Additionally, you can sign the on-line petition to unlock locked-in pension funds at (http://www.petitiononline.com/WRC101/petition.html).

Bill 175, an act to amend the Pension Benefits Act, is one of the most important Bills to come along for the seniors of Ontario in some time. It will dramatically affect the quality and level of retirement for every Ontarian, as it will return full financial control of your locked-in retirement savings over to you by removing the locks and allowing a full transfer into a RRIF (which is not locked and has no maximum limits for withdrawal). All without costing the taxpayer a single dollar!

Grant Fleury is a Sudbury man.

He can be reached at [email protected]

[William Ashley]

Baby boomers will be a pension drain CPP etc.. is being geared to increase in pay into rates to support the boomers after the pool is drained. Hard to beleive a pension collapsable. I personally think that pensions should be option when paid into.. but the system will be forced to support people anyway if they are in dire straights

--- liberalizing retirement finances beyond the social security net is a good thing.

but it ends up just being a money grab to preempt the system collapse for the wealthy. It is the poor boomers that get stuck with a unstable and potentially unpopular system.

I think pensions would be better if they wern't personally based, as I think the government should exercise economic equality regardless... the rich are going to have money for retirement anyway.. pensions are just a perc for the rich.. while the poor a crutch to prevent them from institutionalization.

It is all about giving them enough to live on.. outside of government sponsered institutions. (it is all government money .. but cost of staffing and grounds keeping makes the difference

[Bill C]

Hi William;

I dont quite follow you on what You are saying . Quote " (it is all government money ) "

What I am talking about here is not CPP or OAS or any government sponsored program.

I am talking about a pension that You have when You work for somebody and they put in a amount of money and You put in an amount of money.

People that put money in these plans ( and Some put extra so as they could have a comfertable retirement in their early years) were led to believe that when they reached retirement age they would have access to these funds.

This not the case. You are only allowed to take out basically the interest on these funds Unless You are a MPP that unlocked the funds for them selves in Ontario or You are a Citizen of Saskatchewan , Manitoba , Alberta or New Brunswick.

Ontario prefers to keep their citizens money locked in so as they can tax their estates heavily when we pass away.

You also mentioned being wealthy . It is just not the wealthy caught in this pension scheme . It is the average Citizen that did without to save a little money for retirement that are being hurt the most.

The wealthy dont really want extra money out of these funds as it just puts them in a higher tax bracket.

Regards Bill Costello PS We are still looking for more signatures on our online petition.

http://www.petitiononline.com/WRC101/petition.html

[Bill C]

Hi I am just letting everybody know that is interested. I have sent in the online petition to the Premier and Finance minister of Ontario. I also sent the petition to every MPP in Ontario plus 60 newspapers across the province.

I am still looking for more signatures at http://www.petitiononline.com/WRC101/petition.html

I will be sending it in again.

We have approximately 415 signatures. This is something I dont really understand. With a estimate of two million plus people with locked in pensions in Ontario you would think the petition would be at least four thousand.

Many companies are moving away from defined benefit pension plans to defined contribution plans.

This means that the younger generation that is in the work force that is in or going to be in a company pension plan will eventually end up in a locked in pension .

There have been over twenty nine thousand people that have paid between $200 and $600 to have a small portion of their pension unlocked under the financial hardship provision in the last few years.

If they need more money in the next year because of hard ship they will have to pay another $200 to $600 to access their funds.

This is outright theft. Yet the government can get away with it. If we set up a scam like the locked in funds we would be put in jail.

The financial institutions and government did not properly inform the people that bought into these pension plans that they would not be unlocked when they retired and that they would only be allowed to draw of the interest NOT THE Principle.

This is Criminal. This is Your own money! this is not a government run program .

This is money that people saved for their retirement.

In that short time period also three thousand plus were turned down and not allowed to access any of the principle of their own money. As i said before This is criminal!

In 1999 61 MPP's had legislation passed to unlock these funds for them selves and transfer these funds into an ordinary RRSP of which all MPP's have now.

We contribute 10% of MPP's salries to their RRSP Yet these same MPP's did not unlock the funds for the rest of the people in Ontario.

We need to send them a clear message to unlock these funds and If the Ontario Liberals refuse we need to vote them out of power.

The NDP supports unlocking these funds 100% and the Conservatives are thinking about it.

Now is the time to make Ontario unlock these planes like Saskatchewan , Manitoba, Alberta and New Brunswick have done for their citizens.

There is going to be a meeting with CARP and a representative from the Ontario Coalition of Senior Citizens' Organizations and the Ontario Senior Secretariat and Andrea Horwath and other people working to have these pensions unlocked .

This is to form a solid front on this issue.

The Online petition is good to keep this issue in the minds of the politicians.

Think about Your Future please sign the petition .

http://www.petitiononline.com/WRC101/petition.html

Thank You Bill Costello

[alexgrun]

There is a difference in LIF LIRA LIRF Funds it is either under the

Provincial (Pension Benefits Act RSO 1990) & www.fsco.gov.on.ca (will be different in a diferent province)

or

Federal law (Pension Benefits Standards Act) 1985) & http://www.osfi-bsif.gc.ca/

There provisions in both laws provide the member with ways to unlock the funds based on Shortened Life Expectancy.

Provincial "where a physician certifies that owing to a physical or mental disability your life will be shortened to less than 2 years"

Federal "where a physician certifies that owing to a physical or mental disability your life will likley be shortened considerably" PBSA 1985 Sec 20.1 (3)

Federal And new as of September 2006 PBSA 1985 Update 26

"where a person is absent from the country for over 183 days or more for 2 years the funds can be unlocked" PBSA 1985 28.4 (1) (2)

the amount that you can remove per year of your gross portfolio per year is based on either the Federal or Provincial CanSin amount

at age 56 Jan 2007

Federal 5.5306 %

Provincial 6.5658 %

if you need more information contact mel

[Bill C]

Hi :

A friend asked me to put this in the forums

Anna can be reached through me at [email protected]

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

[Bill C]

This is a letter that a friend sent to Mr.Ted Arnott one of the MPP's that voted to unlock MPP pensions in 1999. Yet does not feel that the people of Ontario should have the same privilege.

It seems that he does not want to answer the Question put to him.

It seems that some MPP's think they don't have to answer questions from people that are not in their constituency.

They are making the rules and regulations that all people of Ontario have to follow.

Therefor they should answer to all people of Ontario.

Truth Motivated bu Honesty , integrity ????????

Good morning Mr. Arnott,

Irrespective of your most evasive reply to me this past week, I am still waiting for your answer to the following question.

Would you be willing to immediately transfer all your MPP pension assets that are currently in RRSP format into a Pension in a Locked-In format?

Having now read your article on global warming (the March 2nd edition of the Wellington Advertiser) entitled "Inconvenient Truth", it is obvious both you and Al Gore have something in common.

Not to undermine the issue of global warming in any way, I found it very interesting that just days after Mr. Gore's recent visit to Toronto, the media was then reporting about Mr. Gore's own substantial home hydro bill ... Mr. Gore's own personal Inconvenient Truth". Not following what you preach certainly leaves one's credibility very much in question ... wouldn't you agree Mr. Arnott? The old adage surfaces again. Nothing is ever quite as it first appears.

Mr. Arnott ... Let's again discuss your own "Inconvenient Truth", to which you have kept noticeably silent. For you, your voting record shows you found it both ethically and morally acceptable that 61 MPPs (of all party affiliations) be given the right to transfer all their Locked-In Pension assets to Pensions in RRSP formats, courtesy of Bill 27 (1999). The Toronto Star reported in 2002 that this magnanimous gift to your brethren cost taxpayers in excess of $20 million. In addition, the Pension reform of the day left you personally with an RRSP pension.

Why is it that the concept of excessive pension regulation by the Financial Services Commission of Ontario is so detestable to you and all other MPPs? At the same time though, you find such excessive pension regulation so OK for your constituents, both within your riding and across the province? Why is that?

As I said at the beginning . my question still awaits an answer from you. You can choose to answer it now or you can to choose to answer it often in public forum as the election nears.

Mr. Arnott ... I'm retired ... I have nothing but time and as such you have just become one of my personal projects leading up to election day.

You obviously have had great difficulty telling your neighbours about your "Inconvenient Truth". I may not live in your riding but for me, that is irrelevant. I have lived in Wellington County in the past and I have been around this region long before you were born. Further, as you are a graduate of Arthur District High School (the former Wellington County School Board), I feel I have a vested interest in ensuring that you find your way back ... to finding that ability ... to tell the truth ... rather than dance around it.

I suggest you think seriously about telling your "Inconvenient Truth" now! Remember the funeral scenario we discussed in your office on February 2nd?

We will surely be crossing paths,

Kenneth Elliott

[Bill C]

I received this in a E-Mail it is from the Archives of The Taxpayers Federation

It made my blood boil !

MPP Pension Fiasco: A $10 Million Taxpayer Mugging?

Imagine if you overpaid into your RRSP a few years back only to be notified by the Canada Customs and Revenue Agency (CCRA) that you now owe big-time taxes - let's say $10 million - on this overpayment. But don't worry Ontario taxpayers will pick up the tab for your mistake. If you're one of approximately 300 current or former MPPs, this is precisely what is happening.

This is the side issue - albeit a $10 million side issue - that has popped up right in the middle of the Ontario PC leadership campaign and it doesn't look good for former Finance Minister Ernie Eves who is leading the race to succeed outgoing PC leader and Premier, Mike Harris. In Mr. Eves defense, his officials have suggested that the timing of this "news" is suspect is probably the work of mischief-making Liberals who are trying to sully his image. Fair enough, there is likely some validity in this suspicion.

Nonetheless, it appears as though Ontario really messed up in 1996 in the way it wound down the gold-plated MPP pension plan. Of course, the concept of abolishing the plan was the right thing to do as was converting paid up amounts for MPPs in RRSP contributions. At issue is the manner in which this concept was executed.

The problem was (and is) that the Ontario government contributed too much into these RRSPs in direct contravention of overwhelming expert advice. Instead it relied on one outside opinion that said what they were doing was legal and acceptable under the Income Tax Act and relevant pension and RRSP legislation.

Some $54 million was withdrawn from the old MPP pension scheme and topped up with another $55 million from general revenues. This $109 million was in turn funneled into RRSP accounts for current and former MPPs or survivors.

The payouts into the RRSP scheme were quite impressive. Former Premier Bob Rae along with NDP colleagues Bud Wildman, Floyd Laughren and Dave Cooke received payments of $1 million or more. And current MPPs like Grit Sean Conway also made out very well. As for Ernie Eves and Mike Harris, their payments were $810,000 and $864,000 respectively.

In setting up this conversion, officials from the provincial Ministry of Finance, a major accounting firm, a prominent Toronto law firm, and Ottawa (including then DM of Finance and now Bank of Canada Governor, David Dodge) all warned Ontario against proceeding as it planned. But Ontario ignored this advice and counsel and marched ahead.

Now fast forward to 2002 and the 300 current and former MPPs have been asked to withdraw excessive contributions to their pension schemes, sometimes up to 50% and 60% of the original RRSP amount. But withdrawing this money counts as income which is subject to income tax. This is where the province (read: Taxpayers) will step in and pay out $10 million to cover the tax bills owing.

This boondoggle yields some fundamental questions. To start, it must be determined if Ontario actually received a 'ruling' from Ottawa. A ruling is a binding interpretation of tax implications (decided by CCRA and Justice) in advance of a financial transaction. If Ottawa gave a formal ruling, then Mr.Eves and crew did nothing wrong and the matter should be dropped.

However, if a formal ruling was not obtained, then other questions arise. Why wasn't a formal ruling sought? Was Mr. Eves was in a conflict of interest in pushing this scheme through when he stood to personally benefit? And is it fair that taxpayers absorb this entire $10 million hit or should former MPPs share in paying some of the taxes owing? At the very least, taxpayers deserve some answers to these $10 million questions.

[Bill C]

I received the Federation Of Labour article in my E-Mail and it made my

blood boil.

All MPP's of Ontario benefited the legislative change to the Gold

Plated pensions in 1999.

61 MPP's were allowed to unlock their pensions in 1999 and now all

MPP's have a unlocked RRSP of which the tax payers pay 10% of their

current salary.

With all this having happened Many MPP's still have the nerve after 8

years of discrimination against the people of Ontario .

They refuse to unlock the locked in pensions for the people of Ontario.

Please mail the Premier and Finance Minister of Ontario and tell them

this Discrimination has to stop

Also please sign the online petition at.

http://www.petitiononline.com/WRC101/petition.html

Thank You Bill Costello

[alexgrun]

If your plan is under the PBSA 1985 (federaly regulated) you can unloch your pension see PBSA Sec 28.4 , & PBSA Update 26 part No. 8, or 20.1

Hi; To anybody that is interested in unlocking locked in pensions . The Ontario Minister of Finance is asking for input from the public for the 2007 Budget .

This is a good time to send in submissions requesting that the Government unlock LIF's , LIRF's & LIRA's

These funds are our own money they are not government run programs Yet the Ontario government is still trying to keep the control of these funds from their rightful owners.

http://www.fin.gov.on.ca/english/consultat...7/calendar.html

The Ontario government unlocked these funds for themselves .

Just as they gave themselves a 31% raise . Yet they have no interest in unlocking the money for the rest of Ontario people.

Saskatchewan . Manitoba Alberta & New Brunswick have unlocked the funds for their people.

It just may be that the Ontario government uses the money from these funds to pay for their raise as when Seniors pass away and then the money is passed to the person's estate it becomes unlocked immediately and then is taxed by the Ontario government at the highest rate.

The only other way these funds become unlocked is if one spouse passes away then they become unlocked for the other spouse.

Or you reach the age of 90. How many of us will reach that age as the average lifespan of a man is around 77 & a women a few years past that.

I was talking to a senior yesterday and she said " Why are You working so hard to unlock these funds .You will be 65 next year and then they will be unlocked"

THIS IS NOT SO. These funds will not come unlocked automatically.

I would advise everybody that has a locked in pension plan to have a serious look at it or else you will be in for a sad surprise when you retire.

Now is the time to lobby the government as more and more people and organizations are getting behind the movement to unlock these funds and every letter that is mailed into your MPP, Premier & Finance Minister helps.

Regards Bill Costello

[alexgrun]

If your plan is under the PBSA 1985 (Federaly regulated not Provincial) you might qualify to unlock your pension see PBSA Regulations Sec 28.4 (1)(2), http://laws.justice.gc.ca/en/showdoc/cr/SO...bo-ga:s_18//en& PBSA Update 26 part No. 8

PBSA Regulations Sec 20.1 (3) http://laws.justice.gc.ca/en/showdoc/cr/SO...nchorbo-ga:s_17

I have been receiving a pension from my Locked in LIF since I removed my money from a federal employer in early 2003, only to find that the amount of pension I was paid was based on the Provincial amounts, and not the Federal amounts. In February of this year someone realized that a mistake was made, and now I receive about 20% less, as the Cansim federal amounts are not caped like the provinces are.

In Alberta you can unlock up to 50% of you locked in (provincial) pension.

I have started a complaint against the investment company & the trust company for providing me the wrong information. I had the option of leaving my money with my former employer and receiving a monthly pension when I reached age 55, I was 53 at the time, now I'm 56.

I am now financially screwed, I have lots of money in the funds and my portfolio has grown, but I can only take out 5.5% yearly, So I have been doing research over the last month, and according to PBSA (above 28.4) If I am out the country for over 183 days in each of 2 years I can unlock my plan, that is have the restriction of (PBSA 18) locked in part removed, making it a regular RRSP unlocked.

Check with your plan holder for what they require as proof of compliance.

Unlike the Provinces there are no hoops to jump through, all you got to do is comply with the act.

I intend to go to Dominican Republic for 6 months this year and 6 months next year so I can comply, just waiting for the info from the plan holder, so if all goes well I hope to unlock the plan in July 2008.

If you wish to contact me for my progress

[Bill C]

Hi Alexgrum: Thank You for the information keep us posted. You might also want to go to this site and post your information on it as there are a lot of people with federal pensions on it.

http://ca.groups.yahoo.com/group/Locked-in_RRSP/

Thank You Bill C

[Bill C]

Hi : This was a commentary on Owensound Radio.

Please write your MPP and the Leaders and tell them your story or just tell them you want these pensions unlocked the same as the other 4 provinces.

Hon.James J Bradley Minister Responsible for Seniors

[email protected]

Hon Dalton McGuinty Premier

[email protected]

Hon Greg Sorbara Finance Minister

[email protected]

Howard Hampton Leader of the NDP

[email protected]

John Tory Leader of the Progressive Conservative Party

[email protected]

And also please sign the online petition at

http://www.petitiononline.com/WRC101/petition.html

Take Care Bill Costello

Commentary can be heard on 560 CFOS Tuesdays & Thursdays at 7:08 am and 5:08 pm

Ross Kentner Commentary for Thursday, March 15th 2007:

People who heard my recent comment on Employment Insurance said they had never heard me so angry. Well, here’s another government scam that has me steamed. This time it’s the Ontario Government that is ripping us off. Now that I’m 65 and thinking of retiring in another five years, I’m looking at how I hope to fund my future.

It’s not a surprise to find I could have started saving sooner or could have been a smarter investor over time. But it’s a shock to learn that the instrument I thought was designed to furnish retirement income is not mine to use as I wish. And, while it may warehouse me when I can’t get around anymore, it will pay me at under the poverty rate when I finally have a chance to pursue hobbies or travel. That’s because, like many of you listening, my retirement account is locked-in.

You probably thought locked-in meant you can’t access your retirement account until you qualify to retire. Actually, it means the government has usurped control of your money and will only give it back to you in dribs and drabs…from 2.5 to 6.3 per cent a year. Do the math…it’s peanuts! You can’t live in Ontario in 2007 on that and you sure as heck won’t be able to live on it if you don’t retire for another 15 or 20 years!

Why did I call this a scam? The formula the government uses assumes you’ll live to 90. But according to Statistics Canada, less than one half of one per cent of us ever reach 90. If I die at 77, which is the average for Canadian men, I’ll never see by far the greater percentage of the money that I and, at one time, my employer paid into my retirement fund.

Can I prove this is a government-sponsored scam? What better proof than this? In 1999 when pension plans for Members of the Legislature were eliminated, a special bill was passed enabling MPPs to transfer their pensions to their personal RRSPs. Our elected members have full control over their previous pension funds. In other words, as things stand now, there is a law for Members of the Provincial Parliament and another law for the rest of us.

In opposition, the Liberals criticized this double standard. In office, they have done nothing about it. Andrea Horwath, MPP for Hamilton East has moved a private member’s bill to give all Ontario residents the option to transfer their locked-in pension funds to a RRIF. Bill 175 must be passed. There is no reason on earth for a government to control a taxpayer’s access to their own money. There’s even less when MPPs have unlocked their own pensions

[sideshow]

geoffrey; Tell Me why in H--- should a person have to borrow funds when You have plenty in a pension plan that the government wants to reap for their own benefits.

All that is needed is to convince the government to give the people control of their own money.

geoffrey ??? that was just an example!

Actually, it'd likely be better for you to borrow the funds.

You've got shitloads of assets, your going to get prime plus one... that costs you 7%. In a properly invested portfolio your likely to gain 10% in that same time frame these days.

So what up? Take my advice, keep your money locked away and just borrow. It's actually cheaper.

I've got numerous student lines of credit that I rack up and use the money to buy investments. I make 12-14% on them, and pay 5.5% because they are nice and give students a good rate. If I only qualified for government loans I'd be making even more. I make 7-9% without even investing my own money.

People are so poor at realising the obvious costs in taking out their investments.

So if you are taking student loans to invest, wouldn't that be the same as someone on welfare using their cheque to make money? Government handout\loan that is not needed for the purpose its given? hmmm.

[Bill C]

Hi I would like to introduce Professor Jack M. Mintz.

He just wrote an article on why locked in pensions should be unlocked. It was posted in the Toronto National Post.

I will be posting following this.

Jack M. Mintz

Professor of Business Economics

Degrees

PhD, University of Essex

MA, Queen's University

BA, University of Alberta

Positions Held

Academic Positions

Current

Professor, Business Economics, Rotman School of Management

Current

Director, International Tax Program, Rotman School of Management

1999- 2006

President and CEO, C. D. Howe Institute

1993-1995

Associate Dean (Academic), Faculty of Management, University of Toronto

1984-1989

Associate Professor, Queen's University

1986

Visiting Associate Professor, Department of Economics, Carleton University

1981, 1985

Visiting Researcher, CORE, Belgium

1978-1984

Assistant Professor, Department of Economics, Queen's University

Non-Academic Positions

1984-1985

Special Advisor to Assistant Deputy Minister, Corporate Tax Research, Department of Finance, Government of Canada

1974-1975, 1976

Consultant, Economic Council of Canada, Financial Markets Group

1971-1973

Budget Bureau and Fiscal Planning, Alberta Government

[Bill C]

Unlock LIRAs:

Workers who change jobs get hobbled with inflexible locked-in accounts. It's time to end this nanny-state paternalism

Jack Mintz, Financial Post

Published: Tuesday, March 27, 2007

Compared with the United States, with its bewildering and complex array of retirement savings plans, Canada has a proud record of levelling the playing field between pension plans and Registered Retirement Savings Plans (RRSPs): We ensure that similar rules apply to them and we make them transferable. Given the evolving labour markets, with people quitting jobs frequently throughout their career, and given our ageing population, our federal and provincial politicians deserve credit for reducing tax barriers to labour mobility and savings.

Yet, one important form of discrimination remains: the locked-in RRSP. It puts millions of pensioned employees at a severe disadvantage compared with RRSP holders who change jobs. Ontario's recent budget takes an initial step to correct this discrimination, but does not go far enough, especially when compared with some provinces that have done much more to remove this discrimination.

When a pensioned employee quits, a choice is made to keep money invested in the pension plan or to take out the money and invest it in a locked-in RRSP (either called Locked-in Funds or Locked-in Retirement Accounts, LIRAs). The money cannot be accessed until a certain age, such as at retirement (this depends on federal and provincial pension legislation) and these funds must then be invested in a life annuity or Life Income Fund. With the Life Income Fund, the investor draws out money subject to mandated maximum and minimum percentages of assets held in the plan. At the age of 80, remaining investments must be converted to an annuity (with 60% spousal benefit) or transferred to a Life Retirement Income Fund that allows the holders to manage their own money (but still subject to mandated withdrawal rules).

Nonetheless, with the locked-in rules for pension transfers, why even bother with a defined-contribution plan since employees could have the same risk and return, but much greater flexibility, with an employer-provided RRSP when changing jobs?

The usual argument against repealing lock-in provisions is a paternalistic one: Workers don't know what is best for them and will cash out their pension savings before retirement. This nanny-state view has been a basis for policy in some other countries, notably the United States, which has imposed penalties on early withdrawals from retirement savings plans. Canada, however, has smartly avoided this trap by enabling individuals to have full access to their RRSPs without extra penalty for withdrawals before retirement. Not only does this give greater flexibility for individuals, but also provides a significant incentive to invest in retirement funds, since individuals need not fear that their money is effectively locked up when facing unexpected contingencies. Locked-in RRSPs are therefore particularly unfair to pensioned workers since they do have the same rights to access their retirement funds.

With the recent budget, Ontario is proposing to allow individuals to unlock 25% of their funds no earlier than the early retirement date (usually 55 years of age), beginning in 2008, after consultations. At this time, individuals can only access their own money if they show special need, once they follow a costly bureaucratic procedure. According to the Canadian Association for Retired Persons, during the period of April, 2003, to March, 2006, almost 30,000 pensioners applied for relief, filling out a 23-page document costing anywhere from$200 to$600 when the application succeeded. Only 52 were rejected outright, leading to wonder as to whether this bureaucratic process is necessary. While the Ontario budget is a baby step in the right direction, NDP MPP Andrea Horwath proposed in a private bill, supported by Conservative Bob Runciman, to allow 100% access to locked-in funds. This would provide similar treatment to that available to many MLAs, who are given access to their occupational pension savings.

Some provinces have gone much further than Ontario to relieve pensioners from onerous rules after leaving their employer. Saskatchewan has been the most progressive province, providing for the full transfer of pension funds to RRSPs or RRIFs. Alberta and Manitoba allow pensioned workers to access 50% of their LIF funds, although Manitoba will soon be moving to full access. The only federal initiative so far in this regard is to unlock funds for federal employees at the age of 90 (we should all live that long!).

It is time to unlock the chains put on pension savings of employees who change jobs or retire. Doing so will help contribute to labour mobility, better retirement plans and, ultimately, a stronger economy.

- - -

- Jack M. Mintz is Professor of Business Economics, J. L. Rotman School of Management, University of Toronto, and Visiting Professor, New York University Law School.

© National Post 2007

[Charles Anthony]

© National Post 2007

Forgive me but what is the point of this post? This seems like a violation of the forum rules:

POSTING COPYRIGHTED MATERIAL

Copyright infringement is illegal on these forums. Therefore, please do not post articles in their entirety. When posting copyrighted material, please use the quote ([ quote ] & [ /quote ]) feature to highlight the important parts of the article and provide a thorough summary for others. You must also provide sufficient credit to the author and a link to the original article in your post. If the article cannot be found online, then at the end of the post provide an appropriate cite using any of the available citing formats, MLA, APA, etc. Find out more information on Fair Dealing in Canada.

http://www.robic.ca/publications/Pdf/032E-LC.pdf

[Bill C]

© National Post 2007

Forgive me but what is the point of this post? This seems like a violation of the forum rules:

POSTING COPYRIGHTED MATERIAL

Copyright infringement is illegal on these forums. Therefore, please do not post articles in their entirety. When posting copyrighted material, please use the quote ([ quote ] & [ /quote ]) feature to highlight the important parts of the article and provide a thorough summary for others. You must also provide sufficient credit to the author and a link to the original article in your post. If the article cannot be found online, then at the end of the post provide an appropriate cite using any of the available citing formats, MLA, APA, etc. Find out more information on Fair Dealing in Canada.

http://www.robic.ca/publications/Pdf/032E-LC.pdf

Hi Charles I am sorry that I set it up wrong I thought that if the author and the paper the article was posted in would cover any Copyright problems. Professor Jack Mintz is supporting our efforts as is CARP and the Coalition Of Ontario Seniors.

The following article that I am posting was sent to me personally by Carp to put in the forums that I am in.

I am a Senior Citizen who contacted CARP to join in with the efforts of other concerned citizens to have this cruel and unjust legislation changed. Again I am sorry if I broke the rules and hope I havent broken any in the next post. Thank You Bill Costello

[geoffrey]

Why do you need 100% of your funds today? And why do you think you should access that without giving up the tax advantages you got by locking in the funds?

[madmax]

Why do you need 100% of your funds today? And why do you think you should access that without giving up the tax advantages you got by locking in the funds?

Why do you ask?

Have you followed the activities of pension plans over the last 50 years?