A Response from a Burlington Counselor

I received a letter the other day that was copied to me from Rick Goldring . It was a response to Ken Elliott's request for his support of Ted Chudleigh's Private Members Bill 116,

I am sure Counselor Goldring doesn't really know the harm these locked in pensions are causing people in these turbulent times.
Locked in pensioners do not have the luxury that ordinary RRSP holders have even though they hold the same type of investment accounts and receive the same gains and losses .
The only difference is RRSP holders can access their funds unrestricted where as LIF holders are restricted to a small percentage .

I don't know why we cant get it through to the powers that be that unlocking these accounts would be a benefit to all citizens of Ontario , especially in these economic times .

Below is the Response Rick sent Ken and Ken's response . I would hope that Rick can answer Ken's Question as I would hope the ones against unlocking these funds can also answer .

Bill C.


Ken,

I am not sure if you want to give people the option of being able to cash in their locked in retirement accounts as these funds are supposed to be used for sustainable retirement income.

While I do not know your circumstances, I suggest converting your locked in registered funds to a life or joint life annuity may be an appropriate strategy to provide you with lifetime guaranteed sustainable income.

Just a thought??

Rick Goldring

Hi Rick,

Thank you for your reply.

Referring to your 1st paragraph below Rick, please ask yourself the following questions.

(a) Out of the hundreds of thousands of Ontarians who are over the age of 55, how is it that there are only 61 people deemed capable of prudently managing their own pension monies contained within locked-in retirement accounts?

(b) What actual means tests were these 61 people ever subjected to, in order to validate such prudent management skills? Why haven't other Ontarians also been tested?

(c) Does it not seem a slight bit unusual that these 61 people just happen to be members of the Ontario Legislature?

(d) For the hundreds of thousands of Ontario seniors who own Locked-In Retirement Accounts and for whom the Ontario government feels justified in locking-in their hard earned pension dollars, assuming they might just pre-maturely squander all pension monies if given free access, why aren't these people prohibited by law from ever attending casinos, race tracks or playing the lottery? Might it just be because the government, through these facilities, is more interested in tax revenue than about the financial security of seniors?

(e) For the hundreds of thousands of Ontario seniors who own Locked-In Retirement Accounts and for whom the Ontario government feels justified in locking-in their hard earned pension dollars, how is it that all through their working days until age 55, they were able to raise families, buy and sell homes, buy and sell automobiles, pay all or part of the post secondary education costs for their children, pay medical bills not covered by insurance, give to charities, run successful businesses, and the list goes on and on, all without government intervention but the instant they turn 55, they suddenly become financially paralysed, according to our Ontario government?

(f) How is that the government can guarantee 61 MPPs will never acquire this same financial paralysis?

(h) Locked-In Retirement Accounts are protected from creditors If this benefit is so great, why did 61 MPPs willingly opt to forgo such when they unlocked their own Locked-In Retirement Accounts?

(i) Why, for a married couple with only one Locked-In Retirement Account, will the Ontario government only allow full unlocking after the death of a spouse? Why can't it be unlocked while both spouses are still alive? Why can't they have full use of their pension monies while both are still living instead of just one being allowed full unlocking privleges? Why must their golden years together be marginalized simply because they aren't allowed full access to their own hard-earned pension monies, monies that took years to accumulate? Why is that 61 MPPs and their spouses will never be subjected to such inhumane treatment?

(j) Why are provincial boundaries seemingly the determining factor concerning unlocking privileges. Residents of Saskatchewan since 2002, have been allowed full unlocking ... in Alberta & Manitoba, residents are now allowed 50% ... in Nova Scotia & Newfoundland, residents are allowed no access at all. Are Canadians not all equal?

(k) Why has there never been any statistical data out of Saskatchewan showing a spike in people on welfare as a result of people having pre-maturely spent all of their unlocked pension monies? Might it just be, contrary to what governments tell us, people, for the most part, are financially responsible?

(l) Why are governments, during this economic crisis, willing to give bailouts and handouts to corporations but at the same time, unwilling to allow seniors full access to their own pensions monies ... monies they have already earned ... monies that are neither a bailout or a handout?

(m) Why is a long time resident of Ontario, now living in Saskatchewan, still not allowed full access to his or her locked-in retirement account? The Ontario government says it's because the pension originated in Ontario. What does that have to do with anything, other than government suppression of the people? After all, 61 Ontario MPPs with their fully unlocked locked-in retirement accounts can choose to live in Saskatchewan anytime they wish, yet their pensions certainly orginated in Ontario.

(n) Why, as the end of February approaches, do all financial institutions always advertise about RRSPs? They never have any advertisements about Locked-In RRSPs? Is it because they don't really want you to know all about the restrictions overriding such accounts? Is it because by keeping your pension funds under lock, they stand to make a lot more in commissions, mers, adminstration fees etc.? Put bluntly, do Ontario financial institutions have a vested interest in keeping locked-in retirement accounts fully locked?

(o) Does it not seem a bit odd that two former Ministers Responsible for Seniors ... Mayor Cam Jackson of Burlington and Transportation Minister Jim Bradley of St. Catherines both had their own Locked-In Retirement Accounts fully unlocked, courtesy of Bill 27, but ever since, they have been totally silent about such privilege? Why don't they want their constituents to know? These are the same people whose mandate calls that they ensure all legislation concerning seniors is both fair and equitable ... not tilted so as to provide incredible financial benefit to MPPs only, especially Ministers Responsible.for Seniors.

(p) Both our current and former Finance Ministers, Dwight Duncan and Greg Sorbara, have indicated that locked-in pensions are necessary in order to protect the integrity of the pension from where the monies originated. If that be the case, why did MPPs from all party affiliations, during their party's tenure as government during the last number of years, turn the former MPPs defined benefit plan into a gold-plated defined benefit pension plan? Where's the integrity in that self-serving move?

(q) Why is it that 61 MPPs are the only ones allowed to circumvent all of the locking-in rules imposed by the Financial Services Commission of Ontario? Why are no other Ontarians allowed the same privlege?

(r) Why are 61 MPPs, by virtue of being all allowed full unlocking of their own locked-in retirement accounts, able to enjoy their retirement to the fullest starting at age 55, but for ordinary Ontarians who die before age 90, most of their locked-in pension money will be lost to the government through estate taxation? Might it be that our government counts on seniors dying before age 90 so as to reap the rewards of high estate taxation? Given this is the reality for many Ontarians, why have Cam Jackson and Jim Bradley been so silent? Might it just be ... they already have their own locked-in retiremeet account fully unlocked?

(s) How is it that several months back the Ontario government can give $850,000 to the Toronto Cricket Club when they only ask for something around $100,000? Given the money, to my knowlege has never been recovered, who is it that can't manage their money? It for sure isn't seniors who own Locked-In Retirement Accounts.

Rick ... I could go on and on lisitng valid questions undermining our government's rationale that insists locked-in retirement accounts are necessary. Please don't ignore my questions. I would truly like to hear your answers to these questions..

Thanks,
Ken Elliott