Hi folks,Copying everyone on the May email sent to each of the 107 MPPs and various newspapers in Ontario
.Regards,Bill Nafziger
Ontario is a “Have Not Province” for Seniors with Locked-in Pensions.During 1999, MPPs in Ontario and Saskatchewan discussed the consequences of locked-in pensions for their retirees.
Dalton McGuinty eloquently expressed the unfairness of locked-in pensions, commenting on Ontario Seniors as “getting down on their bended knee asking for their own pension money”, as evidenced in the 1999 Hansard.
The discussions in Ontario resulted in 61 MPPs of all parties unlocking their pensions in 2000, but denying the same right to all other Ontarians with locked-in pensions.
Saskatchewan’s decision in 2002 was to unlock 100% of their locked-in pensions for their retirees.
"There'll be no restrictions on the amount of withdrawal that can come out," says David Wild, superintendent of pensions."Anyone with a locked-in retirement account will have the option of moving monies to a RRIF [registered retirement income fund] at retirement. Anyone who already has a LIF or an LRIF in Saskatchewan will have that money in a RRIF immediately. So the LIF and LRIF will no longer exist."
According to Wild, retirees, financial planners and financial institutions had become "frustrated" with LIF and LRIF rules in the last four years.
On a technical basis, he says, they couldn't plan ahead because maximum withdrawals from LIFs and LRIFs change according to market conditions. Also, many found the formulas for calculating maximums complicated.
On a philosophical level, Wild says regulators "received complaints, such as 'I'm a responsible adult. Who is the government to tell me how much money I can withdraw from my own LIF or LRIF?'"
Ontario reacted six years later in 2008, unlocking an insulting 25% of locked-in pensions.
Ontario locked-in pension holders paid between $5.2 and $15.6 million in financial hardship application fees, to the Financial Services Commission of Ontario (FSCO) over a three year period (2003 to 2006) to reject only 53 out of over 26,000 applicants. Taxpayers paid for additional remaining costs.
Ontario continues to require these huge costs, to support a full-time department at FSCO , whose sole objective, is to determine which pensioners can have access to more of their own money.
Saskatchewan pensioners and taxpayers paid nothing, as their government allowed pensioners the flexibility to determine their own income streams.Saskatchewan moved past the “age of government paternalism” in 2002, which continues to exist in Ontario in 2008.
Perhaps this is another reason why Ontario is moving towards a “Have Not Province”.
Best regards,Bill Nafziger
Member:Canadian Association of Retired People
Ontario Coalition of Independent LIF Holders
Common Front for Retirement Security
