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.
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.
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