Jerry) Mr Sorbara what is your response to what Mr. Costello was saying
( Sorbara ) Well you know ah the first thing to ah mention is that in the budget I presented on March 22 we provided for ah pensioners who have so called locked in funds to be able to access 25% of those funds.
The important thing to remember Jerry is that These funds are not funds that ah pensioners were paid during their working life .They were funds provided by employers on the biases that those funds would serve ah to provide pensions for those employees after they retired and that was one part of the bargain that one has to respect the other thing to say is that ah ah well ah ah Brian mentioned Saskatchewan .
We have to remember that there are very few pension plans that are actually regulated in the province of Saskatchewan (unable to make out) Ah paternalistic sense that the government has to oversee how seniors spend their money .
Far from it.We are just trying to represent the bargain that was made when those funds were ah put in ,So for example pensioners ah who ah put in one half of the contribution into the pension plan are freed when those pension planes are transferred ah to the individual retire
They are free to take that money out.
This is just about the money the employer whether it is a school board or a municipality or a manufacture put in towards the retirement pension of that individual and that part of the bargain that we are trying to respect and at the same time trying to provide seniors with access up to 25% of those funds at any time that they chose to unlock them.
( Jerry) Ok 25% at what age )
( Sorbara) Ah well ah I think its at the age when its whenever the individual retire moves from the pension plan to a locked in fund. Ah but for example during the transition ah when the Bill is finally passed ah any pensioner with a locked in fund ah will be able to have access at that time ah to 25%of the fund.
( Jerry) so no set age then just
(Sorbara) ya no set age
( Jerry ) Ok . Well why would the government tie up private pensions at all. You mentioned that you feel that it was part of the bargain but these people worked for this money and that was their part of the bargain
( Sorbara ) Ya they sure did and they worked hard and ah during their working lives ah
they received obviously a regular salary There were contributions made to the Canada pension Plan . there were contributions made to perhaps ah a group insurance plan and there are contributions made to pension plans. Ah we are just talking about the funds that are made by employers to the private pension plan and as I said a moment ago ah aga
we think that many private pension plans would think twice about continuing to be contributors to those plans if at the end of the day when the employee leaves he could simply or she could simply take that money and do what ever they want.
Again if I am providing money to you in order to provide for your retirement and then at the end of the employment relationship you say well forget about that part of the bargain , We don't think we are discharging our responsibility's if we just provide 100% access to those funds
. ( Jerry) Do senior citizens really need protection from unscrupulous investors?
(Sorbara) Ah I don't think that this has any thing to do with protecting senior citizens from ah ah investors whether unscrupulous or not.
It's about simply ah honoring the ah agreement the trust relationship between the employer and the employee at the time those funds were put in. and again if we if we simply ignore that I think down the road many employers will say well you know what we are not interested in ah providing a pension plan anymore for our employees And that would be to the determent of hundred's of thousands of workers across the province.
( Jerry) All three major political party's are taking a stand on this issue. Do you see it becoming a election issue.
( Sorbara) No ah ah I don't at all I mean it's it's a relatively ah ah minor issue Ahh it is interesting to here John Tory talk about the fact that ah he he would unlock up to i think 50% or perhaps a 100% Ah You know his party was in government for 8 1/2 years. They didn't make any move on this ah and ah I think he is trying to play to constituency ah where he thinks there may be some votes available but the vast majority of of pensioners who are have these kinds of locked in funds are perfectly happy with the current system and they are a well their glad we are providing access of up to 25% of the funds We don't think that there is going to be a major move towards ah by most pensioners to access these funds because they rely on the annual income ah to you know pay their mortgages to pay their taxes ah and to you know keep them in grocery's for the course of their retirement.
( Jerry ) So you don't think it's going to be difficult to plan financialy What If ( he cut Jerry off)
( Sorbara) No No I don't infact obviously you know if you know if you have a steady stream of income. ah lets say a pension ah income plan that provides you a thousand dollars a month ah as one of your retirement incomes sources. well if that's guaranteed under a locked in fund ah
the fact is that most pensioners will be simply be able to go to a bank and say I have this asset and I would like to borrow 20 or 30 thousand dollars because we want to buy a recreational vehicle or we want to take the holiday that we never had.
So this is not the kind of ah urgent crisis that some people would suggest and the fact that this government has now moved I think is to the ah it's something that most pensioners are saying was the right thing to do.
( Jerry ) Where did that 25% number come from?
( Sorbara) well we did an analyses of what was going on in other provinces. Most provinces do not provide any access Saskatchewan is the outlier because it provides 100% access but again it is a very small jurisdiction and it regulates actually very few pension plans.Ah so other provinces have ah various mechanisms of access and we thought that this was just right within that great ah Canadian norm that was our target
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