A Letter to the Leader of the Ontario PC Party

Dear Mr. Tory,

My name is Grant Fleury. I am a resident of Sudbury.
I sent you a personal email back on Jan 17, 2007 and have not received
a reply or acknowledgement.

As indicated in that previous email, I have been lobbying the
provincial government to eliminate the locks from locked-in pensions
since 2004 when I discovered the limits to access of my own pension
money when I qualified to retire. I have since written articles in
local newspapers in Ontario and have been recently interviewed on the
CBC in the past few months regarding the unrealistic limits of the
current regulations of the PBA and of the discrimination of Bill 27 in
1999. Others in Ontario have also been working diligently to inform the
public of the truth and senseless arbitrary bureaucracy surrounding the
administration of locked-in pensions.

The recent announcement regarding amendments to the Pension Benefits
Act of Ontario by the Liberal government including a 25% unlocking
option, although positive steps in the right direction, do not go near
far enough to address the inequity of the two distinct classes of
citizens that were essentially created by the former Progressive
Conservative party.
As you are very well aware, Bill 27 (1999) and it's infamous
amendments, including the creation of a special exclusive group of 61
MPP's allowing a full transfer of the commuted value of their former
terminated "gold plated" pension plan to a group RRSP format bypassing
all the rules, regulations and limitations, continue to plague every
other ordinary Ontarian. Restrictions and limitations that continue to
restrict their ability to choose the level and style of retirement as
often dictated by conditions other than the "six conditions of
desperate hardship" amendments added in 2002 by the former ruling PC
party.

I agree that all pension ear-marked money should be off-limits until
the normal retirement age or 55 is reached, since it is intended for
retirement.

I agree that there may be a large number of people in the province that
do not have the financial knowledge to deal with their designated
pension assets. We have financial advisors for that purpose, just as we
have plumbers for plumbing and builders for building.

However, rather than assuming we are all inept in that area, unlike the
belief your previous PC party and the current Liberal party have of
themselves, you should adopt a positive approach of providing an
education for those that may stray instead of painting all Ontarians as
financially irresponsible. Maintaining such an attitude as this is
again shear arrogance on any level in any government.

I disagree, as supported by Statistics Canada, with the unrealistic age
of 90 used in calculating the yearly payment for these locked-in
pensions. The facts are simple - less than 1/2 of 1% live till 90. Life
expectancy is 77.2 years, not 90! Pick up any newspaper and read the
obituaries if there is any doubt.

I agree with the Saskatchewan government's lead to 100% unlock all
locked-in pensions for their residents in April of 2002 providing
retirees with more flexibility in managing their own financial affairs.
Your former PC party was ahead of their time in 1999 and had already
positively accomplished this with the grave exception that it was done
selfishly, exclusively and quietly, for all "members only" of the
legislature.

Moreover and more importantly, regardless of any of the above, and as a
direct result of the deceit and inequity of Bill 27, the basic
principle of equality for all Ontarians was broken!
This is why I, and all the other groups and organizations in Ontario,
such as CARP, are insisting on 100% equality and nothing less. If it's
good for 61, it's good for the estimated million others in Ontario who
have locked-in pensions in one form or another.
Every life is as important as the next, as is every law equally applied
for every citizen. The foundation of any true democracy is equality for
all members in it's society.
If that special deceitful exclusive provision for MPP's hadn't been
born in Bill 27, we would now be debating the merits of unlocking and
not the injustice of a misapplication of democracy, which would
probably lead us into other areas of discussing the pros and cons of
the unlocking issue.

But the reality is that "democracy" or lack thereof in this case, has
been broken and you, as party leader, and your members have inherited
this injustice.
It's now up to you to lead by example and show true leadership and
honour toward the people that you govern and re-apply that basic
principle of "EQUALITY' in our democratic society for which Ontario,
and Canada for that matter, were founded upon!

The 25% unlock amount, recently introduced, should be and could easily
be 100%. You and your party must come to terms with the simple and
missing notion of equality for all in a basic democracy where
discrimination amongst a people is totally unacceptable in every aspect
of it's application.
Condoning and upholding a paternalistic and arrogant attitude, with the
unwarranted belief that only 61 MPP's are capable of making sound
financial decisions and being the only ones to have that unique right
to manage their finances as they see fit, is an extremely disrespectful
position for you to assume to defend if you choose that route.

We, as parents and role models, are trying to teach our children about
equality and model that behaviour in our own daily lives within our
family unit. Previous generations, who worked much harder physically
with their hands, than we do today, had a much simpler way of life than
those of us experience today. I can't pick up a paper today without
finding some form of corruptive behaviour or deceit within one or more
levels of the people who govern us. Bill 27 was another stellar example
which was done purposely with intent to exclude and favour a select
few.
Seniors and retirees are astonished and outraged as they learn of this
deceitful act by the former PC party. Our forefathers escaped such
types corruption and severe arrogant control in their homeland to come
to Canada to start over with a clean slate and founded a great nation
based on the simple fundamentals of fairness and equality for all
citizens, regardless of origin.
Mr. Tory, you, being in and around my generation, no doubt were raised
with similar values as those used to create this great province and
nation.
You must do the right thing and make Ontario equal again.
I am fairly certain that you would never allow yourself to run your own
family in an undemocratic style where some would be privileged 0%, some
25% and some 100%. The honour and principles displayed in a family
should be the same type of honour and principles applied by governments
toward all it's constituents.

Bill 27 is a disgraceful slap in the face and an affront to basic
democracy in any society. You know it and so do I, along with every
Ontarian that has learned about this grave injustice created by the
previous Conservative government. The Liberal party with it's recent
budget announcement is continuing, albeit now at 75%, to insult and
disrespect the public by maintaining a paternalistic control of Ontario
retirees personal pension money.
Don't take my word for it, be honest and truthful and ask those around
you that know of Bill 27, what they think of this inequality and
injustice where two sets of rules govern certain individuals in our
province in extremely different ways regarding their same or similarly
commuted pensions.

You cannot, nor should not, ignore this inequity that was created by
your predecessors.
There cannot be any such thing as 25% or 50% or 75% more equal. Equal
is exactly what it means - 100% the same for everyone regardless of who
you are or your chosen vocation.

The former ruling Conservative party recognized the restrictive and
unrealistic paternalism of the PBA in 1999 and rightly so! As amazing
as this may sound, they in fact did the right thing to get as far away
from those regulations as they could as they all realized how
restrictive, insulting, and demeaning they were. The only HUGE mistake
they made was that they should have amended the act to include ALL
Ontarians thus upholding the basic principal of equality in our
province.

Mr. Runciman was more than well justified and showed true democratic
representation by standing up in support of Ms. Horwath's Bill 175 to
fully unlock locked-in pensions allowing all Ontarians the same 100%
unlock privilege that was afforded him and the other 60 members of the
legislature in 1999! This man truly realized the error of his previous
government and had the courage to come forward and admit a mistake.
This is an unbelievable accomplishment in light of the endless "blame
the other party" that more often than not pervades the legislature
during question period.

You sir have the unprecedented opportunity to correct the former
Conservative mistake and proudly own that accomplishment for yourself!

You will have the support of every locked-in pension holder in Ontario
at the upcoming election if you announce your guaranteed intention to
fully unlock and transfer locked-in pensions to an RRSP format at age
55 or the normal retirement date.
I assure you, as I continue my campaign to inform Ontarians of the
deceit and inequity of Bill 27 and the unrealistic and archaic
restrictions of the current rules and regulations of the PBA, there
will be hundreds of thousands of voters anxiously awaiting your
intentions regarding the locked-in issue by the time the election takes
place. The quality of retirement, and for those already living on the
edge, in their remaining years, are largely in your hands.

You and your Conservative party must now, in true and honourable
democratic fashion, insist on extending the privilege of those that
have benefited from the previous Conservative party's Bill 27 to
include the rest of all Ontarians in the application of that same 100%
unlock privilege that was afforded to those 61 MPP's of all
affiliations in 1999.

For our youth and children's sake, show them by example, how a true,
fair and equally applied democracy works.

Seniors and Retirees of Ontario, who were the builders of this great
province deserve the respect they've earned from this current
generation and all others to follow.
They deserve to live out the remaining years of their lives in a
dignified manner with the fruits of their labours in a manner of their
choosing and not that of a faceless beurarcracy.

They are watching and they are listening.

Mr. Tory, you have an enormous opportunity to show the people in
Ontario the true power of democracy by correcting a horrible selfish
act made by the former Conservative government by issuing a simple
unequivocal statement of full support. All without costing the taxpayer
a single dime!

Now that's a powerful gift sitting in the palm of your hand.


People Inform People
Time Tells All
Knowledge is Power

Sincerely,

Grant Fleury
Sudbury

Article in the Kitchener Waterloo Record

PENSION PREDICAMENT
Locked-in pensions can block investors from accessing their own nest eggs
ROSE SIMONE





(Apr 21, 2007)
By the time Bill Nafziger retired after 37 years at Krug Inc. in Kitchener, he had a nice nest egg built up in his pension plan.

But three years later, at age 64, Nafziger, is fighting for the right to do what he wants with his own money.

The Milverton resident has joined CARP, also known as the Canada's Association for the 50-Plus, in lobbying the provincial government to give pensioners the right to withdraw money in what are commonly known as "locked-in" funds.

Locked-in pension funds are like regular RRSPs, but they are much more restrictive because they have maximums on how much money a person can withdraw.

With the principal in his defined contribution pension plan "locked in," Nafziger says he probably will die without being able to access the bulk of the pension money he worked for.

He adds that after he and his wife both die, whatever is left in the fund will to their estate and get taxed as revenue in one year, so the "tax man" will get a bigger bite of it.

"It's completely illogical," he says. "There is no reason why you shouldn't be able to unlock that money, and use it for yourself and your wife while you are living," Nafziger says.

No one knows how many people in Canada have money in locked-in accounts. The Financial Services Commission of Ontario, which is responsible for regulating pensions in this province, says it doesn't keep track of how many there are.

Jack Mintz, a University of Toronto business economics professor who himself has pension money in a locked-in fund from when he left Queens University, says it affects millions of people in Canada.

It includes people like Mintz who took their money out of a group pension plan when they went to work for another employer, as well as people like Nafziger who have individual pension plans rather than employer-administered group plans in which cheques are cut each month for retirees.

Under the financial services commission rules, if pension money isn't being managed by an employer pension fund, or by an insurance company that pays out a monthly income from a life annuity, it has to go into a "locked-in" account to provide a regular income over the years of retirement.

The amount a person can take out in each year after retirement is capped at a small percentage of what is in the fund. For example, at age 62, a person can take seven per cent of what's in the fund. That goes up gradually, to 11.9 per cent at age 79.

Nafziger says this means if he dies at around the age of 79, which is the age when the average Canadian man dies, two-thirds of his money would still be in the locked in fund.

As an industrial engineering manager at Krug, Nafziger tucked away more than $150,000 in his pension fund through personal and employer contributions over the years.

He knows he has to pay taxes on the money he takes out each year so he has no intention of withdrawing his entire retirement fund in one year.

But he says he should be able to enjoy more of the benefits of that money now that he is in a lower income tax bracket compared to when he worked for the office furniture manufacturer.
If the bulk of the money is left to his estate, governments will take a larger share of the funds in taxes, he says.

"If I die at the age of the average man in Ontario, there would still be about $100,000 left in that estate when it is unlocked," he says. "If I could take it out over the next 20 or 30 years in small amounts, I could realize a savings in income tax because I am taking it out at a lower income. But you are not allowed to take significant amounts all the way along."

CARP agrees with him. It is lobbying Ontario to follow the lead of Saskatchewan, which allows people to transfer all of their locked-in funds to registered retirement income funds that don't have maximum payout rules.

In its most recent budget, Ontario announced a provision, to take effect next year, that will allow for a "one time unlocking" of 25 per cent of the money in a locked-in fund.

Scott Blodgett, a spokesperson for the Ontario Ministry of Finance, says the government is trying to "balance the twin goals" of giving seniors more flexibility while still ensuring that there is a steady stream of income through retirement.

In doing that, Ontario will become one of four provinces that allows partial unlocking of funds, he says.

But Bill Gleberzon, a director of government relations for CARP, says that's not good enough.

"Our position is that this is an insult," he says.

The government's rationale for not allowing full unlocking appears to be based on the fear that pensioners will be irresponsible and spend all the money in one year, he says.

But Gleberzon says there is no evidence people would do that, and there is a huge tax penalty if they do.

"This is just outmoded paternalism that should not exist in the 21st century," he says.
Retirees can apply to the financial services commission to unlock their money for health reasons or financial hardship. But people who have more than $17,480 in locked-in accounts also have to pay the commission a fee of $200 to $600 if they succeed.

"So they have to pay to access their own money," Gleberzon says.

About 30,000 people applied to unlock their money between 2003 and 2006, and only 52 were turned down, says Gleberzon. If almost everyone who applies is allowed to unlock anyway, why should people have to go through this costly bureaucratic process in the first place, he says.

Gleberzon says CARP will continue to lobby the provincial government and make locked in pensions an election issue if necessary.

He says it is particularly galling to pensioners who are lobbying for unlocking that in 1999, the Mike Harris-led provincial government passed legislation that allowed 61 MPPs to unlock their pensions early and roll their money into RRSPs.

Gleberzon stresses that it is a matter of giving people access to their own money.

Nafziger agrees. "It's our money. It should be our decision what to do with it, not the government's decision."

rsimone@therecord.com

((((There needs to be a correction where it states)))) " But people who have (((more))) than $17,480 in locked-in accounts "It should read.Retirees can apply to the financial services commission to unlock their money for health reasons or financial hardship. But people who have (((less))) than $17,480. or do not have a income of more then $29,133. in locked-in accounts also have to pay the commission a fee of $200 to $600 if they succeed

John Tory, Leader of the Ontario Progressive Conservative Party

Hi John:

I just received this plus 10 other E-Mails on this subject. with a awful lot of articles about what the Conservative Party has done in the past.

I havent had a chance to read them all yet but I just skimmed through them and It is'nt nice.

I realize that You personally didn't have anything to do with this scandal but many of your current MPP's did.

Bill Costello

When is a pension not a pension? The Ontario Conservatives reformed the MPP's' pension plan, violating federal tax laws. The Conservatives had opinions from legal and accounting firms that the reform would violate federal tax laws. They violated the federal tax laws anyway. Revenue Canada requires large amounts of money be removed from the pension plan and is demanding that the 300 current and past MPP's pay taxes on the amounts as part of normal income.
Using the rational that:
"the government of Ontario has determined that it has a legal obligation arising from the errors that were made by its consultants"The Conservative government, that is, the taxpayers, will pay this tax. But the payment of the tax will also be considered income and it too will give rise to a tax liability. Presumably, the taxpayers pay these repeated increasingly smaller taxes levied on the MPPs by Revenue Canada giving rise to yet another demand by Revenue Canada ad infinitum.
Thee and me must pay tax on money removed from our pension plans. Mikey & Co. get it out free. MPPs can use this money in any way they like. Mikey, the guy who approved the scheme reaps the benefit. He gets his hands on a fat bankroll, estimated at $864,000 (tax free) just in time for his retirement. Eves got $810,000. Bob Rae, Floyd Laughren, Sean Conway and Jim Bradley got $1 million or more, each. Because of Ernie's fat benefit, which was his creation, the Liberals claim he had a conflict of interest and wants an investigation by the public accounts committee.
Eves claims that this is all trickery by the federal government. A more cynical take is that Mikey & Co. planned this. You would like a large tax-free lump rather than taking it out over an extended period and paying tax on it. Its only common sense

A Letter To the Leader of the Ontario Progressive Conservative Party

John Tory, Leader of the Ontario Progressive Conservative Party

Hi John:

I am Just dropping a line to see if you have made a decision on the issue of unlocking pensions. I receive a stack of E-Mail just about every day from people asking if a party has come forward to unlock these pensions .

Many of us in the defined contribution part of the pensions are beginning to wonder if there wasn't some kind of conspiracy with government and financial institutions to mislead the people of Ontario about these pensions.

So many of us were encouraged to invest extra money in these plans so as we would be able to have a comfortable retirement when we were retired. We were led to believe that these plans would become unlocked when we retire.
I received a letter yesterday from a gentleman in British Columbia and he said that he has a group of about a thousand people and they are going to start getting the word out in their province to start lobbying their government to unlock these pensions.
Before the Internet it was easy to keep people in the dark about how their pensions didn't unlock at retirement . Now it is very easy to get the word out and it is spreading right across Canada.

It will be very easy to encourage people to vote for the party that unlocks pensions 100% in Ontario . Pretty well insuring a victory for the party that stops this discrimination and cruelty to many people.

Isent it time to have a government in Ontario that respects the peoples whishes.

Below is a statement in 1997 from a MPP in the Ontario Legislature . It is now 10 years later and this unjustness continues.

Please Do the Right Thing and Unlock these Pensions Bill Costello

Excerpt from the HANSARD in 1997 (a MPP discussing locked-in pensions)

Let’s say Harry Smith worked 28 years for ABC company. Harry is a member of a defined pension plan. ABC company said, “Harry, you will be getting $1000 a month if you work for 25 years.” Harry’s got his 28 years in. Every month he get 5% taken off his paycheque. The company matches the 5% Harry Smith puts in, and that 10% of what he makes becomes a defined plan. Over 25 years it will generate so much money and he will get so much pension if he’s age 55, 58, 60.

There’s a real Harry Smith. He can be any one of us. He’s a person in my riding who worked for Noranda Mines for 32 years, was commuted got a little more than his $130,000 or $140,000 I was talking about. The person is in his late 50s, he has cancer. It’s a true story. He and his wife wish to go to Europe to see the place of his birth. He is pension-poor. Because of the locked in provision, he can only take 7.55% out each year and when he get to be 80, he has to buy an annuity. The insurance company is telling Harry, “But the money will be around.” And Harry is telling the insurance company “Yes, but I won’t be.” It’s his money. Yet we have someone else who has another self-directed RRSP, the same as Harry has, but his is not locked in. So they’re both subject to a minimum, but the locked-in one , because of the LIF, the life income fund only allows you to take so much out. You’re capped and it goes to the insurance company. It’s automatic. In the other plan you have a minimum through a RIF but you have no maximum. And the government are saying “We want the taxes”? Is this fair”

This is a growing monster. More and more people are being commuted, are being bought out, because companies do not wish to assume the liabilities and responsibilities of future pension plans. They don’t have the same flexibility they once had because of scrutiny about the surplus fund, so they’re under the gun and rightly so. What they choose to do as an alternative – and I’m not impugning motive. It’s not for me to say whether it’s right or wrong. A buck is a buck here. But excuse me, something has to be done. This is self serving. It is not right to deprive people of their money when it is rightly theirs. It is not consistent with other RRSPs, it is not consistent with your life savings, it is not consistent with your worldly possessions, ie., house, car, etc; only in this monopoly, in this cartel that represents an attitude of yesteryear.

Thankfully some provinces are beginning to exercise some flexibility. They see the light. There is a human dimension. It’s a good case. It’s a true story.

We are asking our constituent to write a letter, to the carrier explaining his dire need, accompanied by a certificate from the MD and the specialist to back his case so he can have access to the fruits of over 30 yers of service.

It makes no sense to me whatsoever. No one wishes to be unjust, but what are we supposed to tell Harry? “Tell you what Harry, go to the broker or go to whoever is carrying the plan and tell them that you want to transfer to an RRSP.” Don’t even mention the lock-in. Do it two or three times and then some clerk on a busy day in February, before the end of RRSP season, will be too busy and you’ll become legit. You can’t ask Harry to cheat. It’s not done. What about the consequences? Peiople get imaginative. You can’t ask Harry to take his money and run. He wants to pay his taxes. That’s one example of the need to address this legislation.

You say, “What would you do?” One proposal would be to treat it the same way as an RRSP and if you need some money – you might not wish to take everthing out of it. Unless you need it, it would be stupid, because the tax burden would be so high. Both Revenue Canada and Revenue Ontario would take their share, would take their cut. You may wish to take a little more, but providing you take the minimum – and now I understand and I don’t disagree with age 69 in lieu of age 71 – a little painful for some; not much of a window. It might go to 65, I don’t know. Mr Martin professes no ulterior motives. But again, with those people, sometimes they wish to access whatever pool of money.

1740

That’s not as troublesome as the locked-in provision, the straitjacket provision. My friend Harry Smith is locked in. They’ve locked him in. With a pension, they should have issued him a set of handcuffs: “Here, Harry. Welcome to retirement”

We’ll be on our feet again to talk about the pension proposals. I understand that some consultations are taking place. It say right here that consultation will take place with the pension community.

I’ll tell you what: I was outside the Legislative Assembly of Ontario, and it is right downtown. All you have to do is look up. I see all those towers. I see Canada Life. I see the banks; the business community is well represented. I hope that when we talk about the pension community – to me, the pension community is the person who feeds the engine, feeds the locomotive.

Yes, Harry Smith, that’s the pension community. It is his earned money; nothing else matters. It’s much easier, I suppose, to return the phone call from a person of consequence, a person whose name is recognized so easily, a person with money, a person in a high position. They take a cut. They’re not on the take; they take a cut. It’s fee for service. I don’t mind. Give Harry Smith the opportunity and the flexibility access a small dream, the lifestyle that they both worked for for so many years, decades, to enjoy. After all, it is their money. They’ve made the contribution in good faith. They too believed that one day it would be possible. Yet the present system does not allow that.