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chub111, Thunder Bay
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posted in Petition to unlock locked in pensions
28 September 2007 6:56 PM
Statement from Conference
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Hi All; This is a statement from our conference. It was quite a success.
As i get caught up with everything that has been happening I will try and post some of it. We are definitely gaining momentum.
Regards Bill C
Good Morning and thank you for allowing us the opportunity to speak to you today.
The Ontario Coalition of Independent LIF Holders is composed of a number of private citizens assembled from various regions in Ontario who's sole purpose is to lobby the government to unlock all "locked-in" pensions in our province.
We are primarily arguing two issues within one campaign.
The primary issue is that of fairness and equality under one law for all Ontario citizens regardless of vocation and void of political favouritism.
The secondary issue is that of the unjust government control of Ontarians access to their own personal locked-in pension assets. Assets that were generally derived from former employers "wound-up" defined benefit plans and employers defined contribution plans.
Regarding the primary issue, the current rules and regulations set out in the Pension Benefits Act are discriminatory, as theyre not equally applied to all Ontarians. The MPPs pension assets, derived from their former wound-up pension plan in 1995, fall under the jurisdiction of the MPPs Pension Act, thus the discrimination. Two separate Acts for the same type of locked-in pensions.
Discrimination?
YES, there are currently 61 MPP's, both former and present, that through a deceitful amendment to the MPP Pensions Act, cloaked within Bill 27 in 1999, exempted themselves from the highly restrictive and paternalistic legislation that governs all other Ontarians LIRA's, LIF's and LRIF's.
Regarding the secondary issue, the yearly maximum withdrawal limits for those who meet the minimum age requirement (usually 55) for access to their locked-in LIF and LRIF pensions is approximately 6.5%, increasing slightly year after year, until either age 80 if it's a LIF or age 90 if it's an LRIF. The aforementioned 61 MPP's have 100% access! The zenith of discrimination!
YES, 100% unrestricted access to the same type of pension-derived locked-in assets as compared to the rest of all other Ontarians 6.5%!
Outright inequality and double standard. Two separate laws for the same type of pension.
One for 61 MPP's and one for an estimated million plus other Ontarians.
Our Coalition is dead set against such inequality and blatant discrimination. Discrimination and silence since 1999 that continues to percolate within the ruling Liberal party.
We are demanding fair and equal treatment and insist on being included in this exclusive group of 61 privileged Ontarians by receiving the same 100% access to our locked-in pensions.
According to our research, there were Sixty-one (61) MPPs, across all three parties that benefited from this immorally and selfishly conceived piece of legislation consisting of 22 PCs, 19 NDP and 20 Liberals. The names of these 61 MPPs are known to the Coalition as they were derived, with reasonable assurance, from the Ontario Legislature Hansard.
This legislation, quietly kept from the public and cleverly tucked away within Bill 27, only unlocked their locked-in pensions, while leaving all other Ontarians behind.
For the past four years, Premiere Dalton McGuinty, Finance minister Greg Sorbara and Seniors minister Jim Bradley have continued to ignore the pleas of Ontarians begging for full access to their locked-in pensions, while specific members within their party, hypocritically, continue to have full 100% access to their own former locked-in pensions.
In the recent Liberal budget back in March, Greg Sorbara introduced a one time 25% unlocking option to hopefully appease the holders of locked-in pensions. This was an insult to all Ontarians and continues to fly in the face of democracy, and equality under one law for all.
In 2002, Saskatchewan listened to the will of their people and eliminated these restrictions, granting full 100% access to all locked-in pensions through legislation that applied to ALL their residents, and not just their provincial politicians. Their belief was that their residents know best how and when to use their own private pension assets.
In December of 2006, Andrea Horwath of the NDP, introduced Bill 175 to unlock all locked-in pensions in Ontario receiving verbal support in the legislature from Bob Runciman of the PCs.
Predictably and true to their ignorance towards seniors locked-in pensions, the Liberal party ignored this bill and instead went on to introduce and pass a bill for themselves that essentially granted all MPPs a 35% pay raise.
During the current campaign in a press release and public appearance in July, the leader of the Progressive Conservative Party, John Tory committed to unlocking all locked-in pensions 100% if elected, citing that "Ontarians know best how to look after their money, not government".
Our goal here today is to create an awareness of these two issues within the general public.
A public who for the most part, have no idea about the restrictions they will face when they qualify to withdraw their hard earned locked-in pension assets and who further and more importantly have no idea of the hypocritically conceived legislation that was created by politicians, for politicians, leaving the rest of Ontario shackled and begging for equal access to their own pension money.
We encourage you to support the parties in the upcoming election that will unlock pensions 100% for ALL Ontarians and not just a select few as was done in 1999.
Thank you for your time and allowing us the opportunity to speak to you about this extremely important issue affecting the quality and standard of living for the estimated million plus
locked-in pension holders in the province of Ontario.
Sincerely,
Grant Fleury
Ontario Coalition of Independent LIF Holders
The Principals in the Coalition contact information is listed below;
Bill Costello: banjo6@baytel.net Bill Nafziger: nafjbg@perth.net
Ken Elliott: kenneth.elliott@sympatico.ca Philip James: philipajames@rogers.com
Anna Pollock: beachers2@yahoo.com Bill Foan: wfoan@storm.ca
Grant Fleury: gjfleury@sympatico.ca
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Ontario Forum
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posted in Petition to unlock locked in pensions
26 September 2007 9:31 AM
Hi All; I just found this it was posted today.
NEWS RELEASE
JOSH PRINGLE
PC CANDIDATE
SAULT STE. MARIE
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A John Tory government will protect seniors
PC Leader John Tory said a PC government will give Ontarians 100 percent access to their locked-in pension income.
This would mean seniors and retirees would have access to 50 percent of their pension at age 55 and the remaining 50 percent at age 65.
In Dalton McGuinty's Ontario, pensions are locked-in by the government as late as age 90 and the most any senior can hope to access from their pension savings is one out of every four dollars.
Tory indicated that when the Ontario Expert Commission on Pensions reports back in the summer of 2008, he will move quickly to implement its recommendations.
“We can, and must, do more for our senior citizens,” Mr. Tory concluded. “This means adopting policies that put fairness for seniors first. Our seniors have done so much to make Ontario what it is today. In order to repay that debt, leadership matters.”
John Tory has cited comments made in March 2007 by Dr. Jack Mintz of the University of Toronto calling for Ontario to unlock the chains put on pension savings of employees who change jobs or retire.
According to Mintz, unlocking locked-in pensions would help contribute to labour mobility, better retirement plans and ultimately, a stronger economy.
“Seniors and retirees built the foundation for the strong community and Ontario we know today. They deserve to have control over their hard-earned retirement savings,” said Pringle. “We believe that Ontarians know best how to look after their money– not government.”
“Our plan will allow seniors and retirees to have control over their own money and better plan for retirement based on their own needs,” said Pringle. “Ontario's pension regulations present unnecessary challenges for seniors and retirees looking to transform a lifetime of hard work into financial freedom.”
Pringle added: “This is a simple change to Ontario's pension rules with no cost to the taxpayer. Unlike Dalton McGuinty, who is only willing to provide seniors and retirees with partial access to their locked in pension funds, a John Tory PC government will respect the wishes of these individuals to manage their money as they see fit.”
In the 2007 budget, Dalton McGuinty responded to seniors and retirees concerns about this issue by proposing a plan that would give Ontarians access to 25 percent of locked-in accounts at the earliest retirement date of the pension plan from which the money was transferred and 100 percent access at age 90.
To date, no regulations or legislation have been brought forward to enact these proposed changes.
“Leadership is about listening to seniors and retirees," said Pringle. "If we are going to remove the barriers and give the people of our community the fairness and peace of mind they deserve, then leadership matters."
Ontario PC Leader John Tory also today detailed the Progressive Conservative plan to protect senior citizens and other vulnerable homeowners struggling with rising property assessments and unduly restrictive pension structures.
“Today, many seniors are struggling to make ends meet. They are penalized by a property assessment system that punishes people on fixed incomes most of all,” John Tory said.
“Dalton McGuinty has failed to show real leadership on Ontario's assessment crisis. Too many seniors are on the verge of being forced out of their own homes.”
John Tory said his government will take aim at the current municipal property tax assessment system, which is facing a “crisis of credibility” according to the Ontario Ombudsman.
The average assessed home in Ontario recently rose from $179,151 in the 2003 taxation year to $232,883 in the 2006 taxation year.
Some assessment increases have been as high as 150 percent, and homeowners are receiving assessments that contain incorrect information about their properties.
A John Tory government will provide stability to homeowners by:
- Establishing a five percent annual cap on property assessment increases for as long as a person owns his or her home (including if the property is transferred to a spouse).
- Implementing a new reverse onus appeal system so the Municipal Property Assessment Corporation (MPAC) will have to justify an assessment increase.
- Ensuring MPAC fully implements the recommendations of the Ombudsman, and if the serious problems he identified are not addressed, shutting down MPAC and building a better system.
- Addressing rural assessment inequities which currently penalize farmers who have been encouraged to have value-added production services.
PLEASE NOTE:
John Tory and the Progressive Conservative Party have endorsed 100% unlocking of pension funds (LIFs, LRIFs, etc.), 50% at age 55 and 50% at age 65.
The NDP endorsed unlocking of pension funds as MPP Andrea Horwath introduced private members bill #175 to unlock 100% of pension funds.
The Liberals offered a insulting 25% unlocking in their 2007 budget.
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Ontario Forum
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posted in Petition to unlock locked in pensions
24 September 2007 8:38 AM
Response to a Article in the Star.com
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Hi All; This letter is in response to a article that was read in thestar.com
Ontario Election , Drawing the line on campaign attack ads.
Good evening to all Liberals who seem to think it is honourable to tell less than the whole truth. Your collective silence as Liberal Party members on the issue of locked-in pensions is despicable!!!!!!!!!!
In the article below, Ben Chin, Liberal campaign spokesperson is once again only telling part of the truth, while hiding the whole truth as it relates to the Ontario Liberal Party.
(See the 4th and 5th last paragraph of this article.)
As you are well aware Mr. Brown, Mr. Kwinter, Mr. Bradley, Mr. Ruprecht, Mr. Patten, Mr. Phillips, Mr. Ramsay, Mr. Sorbara, there were 20 Liberals in all who received the same financial opportunity that Howard Hampton and Shelley Martel received courtesy of Bill 27, An Act To Amend The Pension Benefits Act And The MPPs Pension Act.
Each of you received the same privilege as did Hampton and Martel.
In fact your former colleague, Sean Conway (also a recipienet of the same privilege as Hampton and Martel) said in the House (see Hansard for Monday December 13, 1999) about Bill 27 ... " I want to make it plain. No one benefits more from this change than I do. It's a wrong thing for me to support. I would go even further and say it's immoral."
As for you Mr. Bradley, Minister Responsible for Seniors, your complete silence on this issue, while hundreds of thousands of your constituency (seniors holding locked-in pensions) suffer under the disgusting confines imposed by the Financial Services Commission of Ontario, is abhorrent. I don't know how you can live with yourself!
Is there even one Liberal party member with the guts to stand up and tell the honest truth about Bill 27, even as it relates to the Liberal Party.
So far there hasn't been one individual with that integrity.
STUDENTS SPEAK OUT
Kerry Gillespie
Queen's Park Bureau
Like most teenagers, Xing Chiu watches television.
What's unusual is that she's particularly interested in the political ads and in reading what the various leaders have to say about their plans for Ontario.
But in an era of negative campaigning, she's often disappointed. Instead of learning about what each party will do, more often than not, she finds out just how much they dislike what the others are up to.
"Recently, Progressive Conservative Leader John Tory accused Ontario Premier Dalton McGuinty of being `the worst promise breaker of modern times.' At what point, or is there a point, where we draw the line between actually campaigning (on policies) and plain accusing and humiliating opponents?" asked Chiu, a 17-year-old student North Toronto Collegiate.
"You do draw the line ... you don't engage in nasty name calling," Tory said when the Star asked Chiu's question.
"To say someone is the greatest promise breaker in modern times, there's a bit of a tongue-in-cheek aspect to that ... but I'm trying to make a serious point," Tory said.
"The nature of some of the broken promises is unprecedented and it's a huge issue in this election if you believe as I do that you have to have credibility and trust in order to govern and lead effectively.
"But I will admit ... finding that balance between discussing your opponent's record and putting forward your own is a difficult challenge. But I really try."
There's a reason parties resort to bashing their opponents in the media and in paid negative ads, said Nelson Wiseman, University of Toronto political science professor.
"Some work, some blow up in your face, but for the most part (negative ads) do work and that's why parties use them," Wiseman said.
Last week, the NDP launched its first television ad. But rather than tell about its policies, all it does is bash McGuinty and his policies.
Often, it's not the party leader throwing the dirtiest mud.
Yesterday, within minutes of NDP Leader Howard Hampton promising to roll back the 25 per cent pay hike MPPs gave themselves last year, McGuinty's staff had sent reporters an email titled: "Troubling questions on Howard Hampton's rich rhetoric."
"When Mike Harris eliminated the MPP pension plan, Howard Hampton and his wife, Shelley Martel, were handed a near $1 million payout. Pretty easy to talk about pay cuts when you're sitting on a million-dollar nest egg, isn't it?" Liberal campaign spokesperson Ben Chin wrote.
Chiu, senior vice-president on her school's student council, knows a little about election campaigning.
"Campaigning means selling yourself, not degrading your opponents," Chiu said.
"I guess it's unavoidable in a provincial-level election to point out your opponents' flaws to boost your own popularity, but when opponent-bashing is the basis of one's campaign ... both parties lose credibility," she said.
PLEASE NOTE:
John Tory and the Progressive Conservative Party have endorsed 100% unlocking of pension funds (LIFs, LRIFs, etc.), 50% at age 55 and 50% at age 65.
The NDP endorsed unlocking of pension funds as MPP Andrea Horwath introduced private members bill #175 to unlock 100% of pension funds.
The Liberals offered a insulting 25% unlocking in their 2007 budget.
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Ontario Forum
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posted in Petition to unlock locked in pensions
21 September 2007 2:19 PM
MEDIA ADVISORY/INVITATION
CARP FIGHTS FOR COMPLETE ACCESS TO LOCKED-IN-FUNDS
FOR ALL ONTARIANS BY AGE 65
Proposed policy will enhance equity and quality of life for LIF holders
Toronto, Ontario, September 19, 2007 – On Wednesday, September 26, at 10:30 a.m., Canada's Association for the 50 Plus (CARP) will hold a press conference to urge the Ontario government to unlock LIFs for all Ontario LIF holders. CARP, in conjunction with the Ontario Coalition of Independent Locked-in-Fund Holders (OCILFH), proposes that 50 per cent of the principal in a LIF should be unlocked at age 55, with an additional 50 per cent unlocked at age 65.
450,000 Ontario LIF holders are seeking equity with the 61 Ontario MPPs who were allowed to unlock their LIFs; CARP urges the government to follow the example of Saskatchewan which has unlocked LIFs 100 per cent.
When: Wednesday September 26, 2007 @ 10:30am
Where: CARP'S National office, 27 Queen Street East, Suite 1307, Toronto, corner Victoria.
Who: Speakers will include preeminent tax expert, Professor Jack Mintz, leading actuary Malcolm Hamilton, Dr. W. Gleberzon, CARP's Director of Government Relations, with a message from financial author and publisher, Gordon Pape.
Personal testimony by LIF holders will also be presented.
Contact: Michelle Taylor at 416-363-8748 ext. 236 or at m.taylor@50plus.com
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Ontario Forum
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posted in Petition to unlock locked in pensions
17 September 2007 3:15 PM
Good Morning All,
As some of you may or may not be aware as yet, Philip James has secured a one hour time slot on the Bill Kelly Talk Show at radio station CHML Hamilton 900 on the AM band at 11am on Wednesday Sept. 19th. The broadcast will be streamed live and can be heard on the Internet at http://www.900chml.com .
Philip & Ken Elliott will be participating together as Billy Kelly's guests.
Over the last few days, we've been working together gathering material and discussing topics and various strategies in preparation for the program.
The topics will be around the various locked-in pensions issue and hopefully they will be able to provide the listeners with a clear realization of what a locked-in pension is, if any of the listeners in fact do have one that don't yet even realize that they do, the consequences and limitations of locked-in pensions, the current political parties position regarding unlocking these pensions, the hypocritical position and silence from the current Liberal government and of the real truth and discrimination behind Bill 27 and the select 61 MPP's who cleverly and deceitfully created legislation to bypass the very rules they continue to impose on Ontarians today.
Hopefully as time permits, they will be able to get most of this material out to the listeners and create enough of a buzz among the voters who can then decide how important an issue locked-in pensions really are for themselves and how they detrimentally affect not only the current holders of LIF's and LRIF's but also the continually growing number of employees with LIRA's resulting from their employers DC type pension plans.
I will make every attempt to record the interview and create a copy of the program in an audio file and distribute it to those who want a copy, subject to the radio station's permission.
Please feel free to pass this on to all of your own set of contacts within your respective areas. The more listeners, the better chance to get the message out.
Regards,
Grant Fleury
Ontario Coalition of Independent LIF Holders
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Ontario Forum
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posted in Petition to unlock locked in pensions
14 September 2007 6:50 PM
Dear Bill,
I am pleased to be writing this letter in support of unlocking the pensions of those Ontarians with LIF, LIRA, and LRIF pension holdings. My colleague Andrea Horwath, the NDP Pension Critic introduced a private members bill in the last legislature that would have allowed seniors to withdraw up to 100 per cent of their locked-in pension funds. I strongly believe that this is legislation that needs to be reintroduced and acted upon by the legislature as soon as possible after the October 10th election.
Seniors want the right to access and control their own money, and deserve to have that option. People should not have to wait until age 90 to access the full amount of their pension funds, to limit access to 6.2 percent of principal, in an era when so much talk is being bandied about around choice for seniors, is simply ridiculous.
Alberta, Saskatchewan, Manitoba and New Brunswick and the federal government have already changed their laws to enable older adults to access some, or all, of their locked in pension, but in Ontario, only a select number of MPPs have the freedom to unlock their pensions. This is wrong. It isn't fair, and is something I want to see changed.
Some people may question if a 25 year old understands the importance of this issue, but with my own parents approaching retirement age, I understand this issue not only from a political perspective but also from the personal perspective of my own family.
Allowing access to the principal in locked-in funds is the fair thing to do for Ontarians especially since a precedent was set in 1999 under the Conservative government with Bill 27 when 61 MPPs were permitted to do so.. For MPPs to give themselves the right to access that is denied to everyone else is wrong. I look forward to working in Queen's Park to set it right.
Sincerely,
Stephen Maynard
NDP candidate
London-Fanshawe
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Ontario Forum
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posted in Petition to unlock locked in pensions
12 September 2007 7:11 PM
Hi ;
There is a new site on locked in funds at the CARP web site.
http://www2.carp.ca/display.cfm?cabi...&libraryID=102
Regards Bill Costello , The Ontario Coalition of Independent LIF Holders
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Ontario Forum
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posted in Petition to unlock locked in pensions
10 September 2007 5:54 PM
A Letter to John Tory
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Mr. John Tory, MPP
Leader - Progressive Conservative Party of Ontario
September 7th, 2007
Dear Sir,
I am writing you in response to your announcement in July regarding
your commitment to fairness for all Ontarians concerning locked-in
pensions.
Although we haven't met, you may be aware of me through your Economic
Policy Advisor, David Goodwin. Mr. Goodwin and I worked together, the
day before, to the extent where I provided the details and facts for
your information backgrounder and your subsequent announcement for
unlocking pension income the following day.
I thank you for addressing the needs and the quality of life for the
many retiring and retired Ontarians by committing to unlock all Ontario
locked-in pensions 100%. I'm certain all people in Ontario with
locked-in pensions will undoubtedly thank you as well.
As you are aware, there has been a significant lobbying campaign in the
province by a large number of private citizens, the Ontario Coalition
of Independent LIF Holders and CARP.
I believe listening to the voices and stories from people such as these
has led to your decision to right the wrong of your predecessor that
occurred within Bill 27 in 1999. Fairness, such as this will no doubt
give more people a chance to contribute to the province's prosperity
and the ultimate right to manage pension money that is rightfully
theirs.
Although I would have preferred your intention to be 100% unlocking at
the qualified age or 55, whichever came first as was done for 61 MPP's
in 1999, the 50% split at 55 and the remainder at 65 is certainly and
without a doubt a huge step in the right direction to ending government
interference in the personal and private financial matters of all
Ontarians.
As I'm sure your research will confirm, there is in excess of an
estimated one million LIF and LRIF holders in our province. That number
grows steadily as a number of people continue to be forced to commute
their DB (defined benefit) pension plans and convert their assets into
LIRA's (Locked-In Retirement Accounts) and eventual subsequent LIF's
and LRIF's due to plant closures and permanent layoffs. Obviously this
is a very large number of affected people, some of whom are unaware, as
yet, of the severely limited access they will have to their locked-in
pension once qualified.
However, additionally, there is much more to the real and total number
of affected people than those currently qualified holders of LIF's and
LRIF's. The actual much larger unrealized quantity exists in the
eventual and future holders of LIF's and LRIF's.
That is, in addition to the growing number of unfortunate commuted DB
pension plan recipients and the current holders of LIF's and LRIF's,
there are millions of other Ontarians working for companies that are
currently in possession of DC (defined contribution) type pension
plans.
These DC plans accrue deferred pension plan assets that are also in the
form of a locked-in component of the plan member's overall pension
plan. The actual percentage and amount is determined by each
individuals plan arrangement with their employer. That component
provided by the employer's contributions will also be regulated, one
day, by the Ontario Pension Benefits Act in the form of a locked-in
fund.
In the early years of building these pension assets, little attention
is paid to these monies since the age of 55 is often far away and thus
generally out of the minds of these younger workers.
As the number of holders of DC type pension plans increase, so does the
importance of passing legislation, as you've announced, to deal with
that eventuality in terms of sufficiency and predictable pension
planning.
It is my belief that you consider recognizing this “other” growing body
of future “LIF” and “LRIF” holders throughout your campaign when
speaking about your commitment to unlock Ontario's pensions and that
you include this “lesser known”, much "larger quantity" of individuals.
One day they too will be affected by your intended positive changes to
the pension legislation pertaining to locked-in pensions as governed by
the Ontario PBA.
This significantly large pool of people, once educated to the future
liability of the DC pension, will no doubt be thankful, appreciative
and responsive to a government that intends to ensure that their future
years, as well, are not shackled by paternalistic and restrictive
legislation preventing them from full control over their future
retirement funds.
In closing, and as every vote counts, I believe it is an important
strategy to inform and educate not only the current holders of LIF's or
LRIF's in Ontario of your intention to unlock their pension assets, but
the huge number of future holders of locked-in pensions as well.
Getting this message out to all affected people is paramount since the
component of a DC type locked-in pension plan and future unfortunate
recipients of commuted DB plans, affects far more additional people
than those current holders of LIF's and LRIF's.
Informing these two groups of people affected by locked-in pensions,
both present and future, is a very significant opportunity for you and
your party to recognize and harness the necessary support in order to
carry out your intention to unlock pensions in your bid to become the
ruling party in this great province of ours. A province founded and
built under laws of fairness, equality, and freedom of lifestyle choice
not only during our working years, but as well, during those all too
often relatively precious few retirement years.
Thank You.
Sincerely,
Grant Fleury
Ontario Coalition of Independent LIF Holders
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Ontario Forum
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posted in Petition to unlock locked in pensions
04 September 2007 7:00 PM
A Message for the Ontario Liberal Party:
Please note that we are gathering support throughout Ontario to unlock 100% of locked in pensions at retirement for Ontarians. This growing ground swell of voters are well aware of the reluctance of the Ontario Liberals to unlock 100% of locked in pensions.
Prominent individuals that are supporting unlocking 100% of locked in pensions at retirement include:
(i)Professor Jack Mintz, an renowned economist with Rotman School of Management, U of Toronto
(ii)Malcolm Hamilton, an eminent actuary and principle of William Mercer, Toronto
(iii)Gordon Pape, a well known financial commentator
A copy of Jack Mintz's article regarding “locked in pensions in Ontario” published in the Financial Post is copied below:
Unlock LIRAs: Workers who change jobs get hobbled with inflexible locked-in accounts. It's time to end this nanny-state paternalism
Jack Mintz, Financial Post
Published: Tuesday, March 27, 2007
Compared with the United States, with its bewildering and complex array of retirement savings plans, Canada has a proud record of levelling the playing field between pension plans and Registered Retirement Savings Plans (RRSPs):
We ensure that similar rules apply to them and we make them transferable. Given the evolving labour markets, with people quitting jobs frequently throughout their career, and given our ageing population, our federal and provincial politicians deserve credit for reducing tax barriers to labour mobility and savings.
Yet, one important form of discrimination remains: the locked-in RRSP. It puts millions of pensioned employees at a severe disadvantage compared with RRSP holders who change jobs.
Ontario's recent budget takes an initial step to correct this discrimination, but does not go far enough, especially when compared with some provinces that have done much more to remove this discrimination.
When a pensioned employee quits, a choice is made to keep money invested in the pension plan or to take out the money and invest it in a locked-in RRSP (either called Locked-in Funds or Locked-in Retirement Accounts, LIRAs).
The money cannot be accessed until a certain age, such as at retirement (this depends on federal and provincial pension legislation) and these funds must then be invested in a life annuity or Life Income Fund. With the Life Income Fund, the investor draws out money subject to mandated maximum and minimum percentages of assets held in the plan.
At the age of 80, remaining investments must be converted to an annuity (with 60% spousal benefit) or transferred to a Life Retirement Income Fund that allows the holders to manage their own money (but still subject to mandated withdrawal rules).
Unlike pensions, owners of employer and employee-funded RRSPs are far less shackled by their previous employer contract when they change jobs. The RRSPs can be cashed in any year without penalty, although the principal and accumulated income will be fully taxed, similar to pensions.
At the age of 69 (71 when the recent federal budget is implemented), the RRSP must be cashed out (and taxed), turned into an annuity or put into a Registered Retirement Income Fund (RRIF), of which withdrawals are taxed.
Compared with the Life Income Fund owner, who must hold an annuity or a Life Retirement Income Fund, the RRIF owner can take out as much as he wants, subject to a minimum percentage of assets.
Given these stringent rules, employees have a good reason to prefer RRSPs over pensions.
Defined-benefit pension arrangements have been used by employers to keep their workers on staff, since employer contributions are geared more toward the end of the employee's career, a policy that is becoming inflexible in a world where workers frequently change jobs. Further, with employer responsibilities for liabilities and employee claims to surpluses upon wind-up of defined benefit plans, many companies have shifted to defined-contributions plans.
These operate like RRSPs in that the employee receives pension benefits based on the performance of invested funds provided by the employee or employer.
Nonetheless, with the locked-in rules for pension transfers, why even bother with a defined-contribution plan since employees could have the same risk and return, but much greater flexibility, with an employer-provided RRSP when changing jobs?
The usual argument against repealing lock-in provisions is a paternalistic one:
Workers don't know what is best for them and will cash out their pension savings before retirement.
This nanny-state view has been a basis for policy in some other countries, notably the United States, which has imposed penalties on early withdrawals from retirement savings plans.
Canada, however, has smartly avoided this trap by enabling individuals to have full access to their RRSPs without extra penalty for withdrawals before retirement.
Not only does this give greater flexibility for individuals, but also provides a significant incentive to invest in retirement funds, since individuals need not fear that their money is effectively locked up when facing unexpected contingencies.
Locked-in RRSPs are therefore particularly unfair to pensioned workers since they do not have the same rights to access their retirement funds.
With the recent budget, Ontario is proposing to allow individuals to unlock 25% of their funds no earlier than the early retirement date (usually 55 years of age), beginning in 2008, after consultations.
At this time, individuals can only access their own money if they show special need, once they follow a costly bureaucratic procedure.
According to the Canadian Association for Retired Persons, during the period of April, 2003, to March, 2006, almost 30,000 pensioners applied for relief, filling out a 23-page document costing anywhere from$200 to$600 when the application succeeded. Only 52 were rejected outright, leading to wonder as to whether this bureaucratic process is necessary.
While the Ontario budget is a baby step in the right direction, NDP MPP Andrea Horwath proposed in a private bill, supported by Conservative Bob Runciman, to allow 100% access to locked-in funds. This would provide similar treatment to that available to many MLAs, who are given access to their occupational pension savings.
Some provinces have gone much further than Ontario to relieve pensioners from onerous rules after leaving their employer.
Saskatchewan has been the most progressive province, providing for the full transfer of pension funds to RRSPs or RRIFs. Alberta and Manitoba allow pensioned workers to access 50% of their LIF funds, although Manitoba will soon be moving to full access.
The only federal initiative so far in this regard is to unlock funds for federal employees at the age of 90 (we should all live that long!).
It is time to unlock the chains put on pension savings of employees who change jobs or retire. Doing so will help contribute to labour mobility, better retirement plans and, ultimately, a stronger economy.
- - -
- Jack M. Mintz is Professor of Business Economics, J. L. Rotman School of Management, University of Toronto, and Visiting Professor, New York University Law School.
© National Post 2007
Please consider unlocking 100% of locked in pensions at retirement for all Ontarians at retirement.
After all, it is their money. It is not government money.
Best regards,
Bill Nafziger
11 Whaley Ave.,
Box 94, Milverton
Ontario, N0K 1M0
Member:
Ontario Coalition of Independent LIF Holders
Common Front for Retirement Security (with over 2 million members in member organizations)
CARP, working together to unlock 100% of locked in pensions at retirement (with over 250,000 members in Ontario)
PLEASE NOTE:
John Tory and the Progressive Conservative Party have endorsed 100% unlocking of pension funds (LIFs, LRIFs, etc.), 50% at age 55 and 50% at age 65.
The NDP endorsed unlocking of pension funds as MPP Andrea Horwath introduced private members bill #175 to unlock 100% of pension funds.
The Liberals offered a insulting 25% unlocking in their 2007 budget.
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Ontario Forum
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posted in Petition to unlock locked in pensions
29 May 2007 8:10 AM
Here is another reason for locked-in pensions to be unlocked. It was taken from my online petition.
I returned to work at age 40 after raising our family in the hopes of having a pension fund available. Now at 67 we are struggling to hang on to our home. It is very frustrating to know that you have funds that you can not access, but I guess the government thinks that we are not capable of handling our own money.
I am still looking for more signatures at
http://www.petitiononline.com/WRC101/petition.html
I will be sending it in again.
If you have a story to tell how the locking of these pensions affected you or you just want to send a message that you want these pensions unlocked.
You can put it in the online petition and I will make sure that every MPP & news paper Editor in Ontario See's it or You can mail it personally to the following people.
Ontario Liberals said it will unlock 25% in 2008 if they are still here.
We say that is not enough.
The latest word I have heard is that they wont go any further.
We have to tell them and the other party's that there is a need to go further. This is not their money or government money it is OUR MONEY
When a person considers that Saskatchewan unlocked 100% for their people.
Also in 1999 61 MPP,S also had all of their funds unlocked with a MAJORITY VOTE in Parliament.
We need to let all party's know that we all want 100%. Nothing less.
This is all our own money . Not government money to keep themselves in perks.
Hon. Dalton McGuinty
dmcguinty.mpp.co@liberal.ola.org
Hon. Greg Sorbara
gsorbara.mpp@liberal.ola.org
Howard Hampton
hhampton-qp@ndp.on.ca
John Tory
john.tory@pc.ola.org
Robert W Runciman
bob.runciman@pc.ola.org
Thank You Bill Costello
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Ontario Forum
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posted in Petition to unlock locked in pensions
10 May 2007 7:42 AM
Hello All;
I just received this letter from Greg Sorbara in snail mail concerning the insulting 25% unlock.
Ministry of Finance Office of the Minister
April 27, 2007
Dear Mr. Costello:
Thank you for your correspondence forwarded by Premier Dalton McGuinty, regarding Ontario locked-in accounts.
In response to concerns and suggestions received from Ontarians regarding locked-in accounts, the government has committed in its 2007 Ontario Budget to introduce changes to the rules governing locked-in accounts, including the introduction of a new life income fund (LIF) that permits 25 per cent unlocking. The new, more flexible, LIF and other modifications to the rules for locked-in accounts would provide Ontario seniors enhanced access to their locked-in funds.
The new LIF would replace existing LIFs and locked-in retirement income funds (LRIFS) and introduce the right for LIF account holders to withdraw or transfer to a non-locked-in account up to 25 per cent of their locked-in funds. The new LIF would also eliminate existing mandatory annuity purchase requirements, permit withdrawal of the entire remaining account balance by age 90 and allow account holders to make LRIF-type withdrawals based on the investment earnings in the previous year where this amount exceeds the maximum income under the LIF schedule.
Additional changes to the rules governing locked-in accounts would permit unlocking for account holders who are non-residents of Canada for at least two years and direct transfers to non-locked-in accounts of small amounts unlocked in accordance with the existing provisions of the Pension Benefits Act.
In addition, consistent rules for the waiver of spousal entitlements to locked-in funds upon the death of the account holder would also be introduced.
Consultations with financial institutions and other key stakeholders on the 2007 Budget 1 proposals have been initiated to ensure that the introduction of new LIF and other changes to the rules for locked-in accounts may proceed smoothly.
Implantation of the 2007 Budget proposals is expected to begin in January of 2008
Thank you again for writing Yours sincerely Greg Sorbara Minister
c: The Honourable Dalton McGuinty
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Ontario Forum
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posted in Petition to unlock locked in pensions
28 April 2007 8:13 AM
Hi This is a letter sent to John Tory
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 locked_pensions_gf@yahoo.ca
Sudbury
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Ontario Forum
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posted in Petition to unlock locked in pensions
22 April 2007 8:36 AM
Hi : This is a article printed 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
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Ontario Forum
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posted in Petition to unlock locked in pensions
10 April 2007 9:29 AM
Hi:
I am just letting everybody know that is interested. I have sent in the online petition to the Premier and Finance minister of Ontario. I also sent the petition to every MPP in Ontario plus 60 newspapers across the province.
I am still looking for more signatures at http://www.petitiononline.com/WRC101/petition.html
I will be sending it in again.
If you have a story to tell how the locking of these pensions affected you or you just want to send a message that you want these pensions unlocked.
You can put it in the online petition and I will make sure that every MPP & news paper Editor in Ontario See's it or You can mail it personally to the following people.
Ontario Liberals said it will unlock 25% in 2008 if they are still here.
We say that is not enough. When a person considers that Saskatchewan unlocked 100% for their people.
We need to let all party's know that we all want 100%. Nothing less.
This is all our own money . Not government money to keep themselves in perks.
Hon. Dalton McGuinty
dmcguinty.mpp.co@liberal.ola.org
Hon. Greg Sorbara
gsorbara.mpp@liberal.ola.org
Howard Hampton
hhampton-qp@ndp.on.ca
John Tory
john.tory@pc.ola.org
Robert W Runciman
bob.runciman@pc.ola.org
Thank You Bill Costello
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Ontario Forum
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posted in Petition to unlock locked in pensions
01 April 2007 7:33 PM
Anna's Letter in the Post
http://www.canada.com/nationalpost/news/editorialsletters/story.html?id=c74d46e3-5115-4098-8720-e2de80f523cf
Truly shackled
Financial Post
Published: Saturday, March 31, 2007
Re: Unlock LIRAs, Jack Mintz, March 27
Those having locked-in funds are truly shackled. At age 58, I can access merely 6% of my LIF fund. Those having RRSPs or group RRSPs can access their funds as life and need dictate. We take the risk in investing and should be able to access the proceeds, unfettered as in an RRSP.
Pension legislation, both provincially and particularly federally with regard to locked-in funds, must be radically changed. The 25% unlocking in the recent Ontario budget is totally unacceptable.
Ontarians should have their funds fully unlocked, 100%, as the MPPs in 1999 via Bill 27 generously unlocked theirs, to the exclusion of every other Ontario resident.
We are perfectly capable of managing our retirement income and don't need the nanny state to protect nor dictate to us. Pension legislation overall is outmoded, outdated and in need of a major overhaul.
Anna Pollock, Oakville, Ont.
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Ontario Forum
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posted in Petition to unlock locked in pensions
29 March 2007 1:25 PM
Hi:
This is the press release that has just been sent out to papers across Ontario.. We also need Your support please sign the petition and write your MPP'S and the leaders etc. that are listed in the document below.
We have to let the Government know that we wont stand for the slap in the face that the government did to every Ontario Citizen by insulting us with a 25% unlock while the Government of Saskatchewan unlocked 100% for their citizens. Thank You for any support Bill Costello a Concerned citizen.
For Immediate Release
CARP's 100% SOLUTION UNLOCKING LOCKED-IN FUNDS IN ONTARIO FOR THE TWENTY-FIRST CENTURY
Toronto, Ontario March 23, 2007 – Ontario's 2007 budget opened the door to unlocking Locked-In Funds (LIFs) by giving Ontarians the right of a one-time unlocking of up to 25% of locked-in funds no earlier than age 55 – but much more can and must be done. The many hundreds of thousands of Ontario LIF holders will accept no less!
CARP proposes that 50% of the principal in a LIF should be unlockable starting at age 55. With an additional 50% unlockable at age 65 – for a total of 100% for all Ontario LIF holders. The unlocked funds would be transferred into a RRIF.
Unlocking LIFs 100% is consistent with what was done in Saskatchewan five years ago and with what has been advanced in NDP MPP Andrea Horwath's private member's Bill 175.
A precedent was set in Ontario in 1999 by Bill 27 which allowed 61 MPPs to unlock 100% of their LIFs. It is absolutely unjust that this select group should enjoy a privilege that is denied to the multitude of other Ontario citizens with LIFs – and will continue to be denied if the Government's discriminatory proposal is adopted. In fact, PC MPP Bob Runciman publicly endorsed Bill 175 because, as one of the select 61, he believes that all Ontarians with LIFs should have the same rights as he has.
In a recent article in the National Post, one of Canada's leading tax experts, University of Toronto Professor Jack Mintz, stated, "workers who change jobs [or retire] get hobbled with inflexible locked-in accounts. It's time to end this nanny-state paternalism."
Not only is the Government's paternalism outdated, but so is its bureaucratic procedure whereby people have to fill out a 23-page application form to beg for access to their LIF principal and only if they can satisfactorily prove dire health or financial crises. If successful, they pay $200 to $600 to the Government for the favour.
Indeed, unlocking LIFs 100% will not cost the Ontario Government a single penny since LIFs are not government money. Rather it will save the government money by eliminating the need for bureaucrats to judge the LIF application forms – although this may be slightly offset by the loss of its bonus from successful applicants. However, it will raise more funds for the government through increased taxes from withdrawals as well as from sales taxes through increased consumption which, in turn, will stimulate Ontario's economy. And, of course, CARP's proposed policy will go a long way in enhancing the quality of life, well-being and self-respect of Ontario LIF holders.
LIF holders should express their support for CARP's 100% solution to Premier McGuinty, Minister of Finance Greg Sobara, their local MPP and Opposition Leaders John Tory and Howard Hampton by going to www.carp.ca to use the
e-voice email system or by phone or mail.
CARP is Canada's Association for the Fifty-Plus. A non-profit, non-partisan national organization with 400,000 members across the country, CARP's mandate is to promote and protect the rights and quality of life for older Canadians. Its mission is to develop practical recommendations for the issues raised. CARP for the 50Plus Magazine is read by close to 1 million Canadians. The CARP websites receive 250,000 unique visits per month.
Contact:
Michelle Taylor
416 363-8748 ext. 236
m.taylor@50plus.com
www.carp.ca
NOTES:
The exact wording of the sentence in the 2007 Ontario Budget is: " the right to an optional one-time unlocking of up to 25% of locked-in funds no earlier than the early-retirement date under the pension plan from which the money was transferred (in most cases, this is age 55)."
In Ontario, when a pension plan is terminated or a person leaves a pension plan, the assets that the person has accumulated in the plan must be transferred to Locked-In Retirement Account (LIRA). The funds in a LIRA cannot be removed. However, once the qualifying age is reached, being either the earlier of the normal retirement date from which the funds originated or 55, those funds can then be transferred to a Locked-In Fund/Life Income Fund (LIF) or a Locked-In Retirement Income Fund [LRIF]) from which funds can be withdrawn annually in percentages mandated by provincial regulations for a LIF and for a LRIF.
Locked In Funds are also called Life Income Funds
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Ontario Forum
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posted in Petition to unlock locked in pensions
28 March 2007 9:36 AM
Unlock LIRAs:
Workers who change jobs get hobbled with inflexible locked-in accounts. It's time to end this nanny-state paternalism
Jack Mintz, Financial Post
Published: Tuesday, March 27, 2007
Compared with the United States, with its bewildering and complex array of retirement savings plans, Canada has a proud record of levelling the playing field between pension plans and Registered Retirement Savings Plans (RRSPs): We ensure that similar rules apply to them and we make them transferable. Given the evolving labour markets, with people quitting jobs frequently throughout their career, and given our ageing population, our federal and provincial politicians deserve credit for reducing tax barriers to labour mobility and savings.
Yet, one important form of discrimination remains: the locked-in RRSP. It puts millions of pensioned employees at a severe disadvantage compared with RRSP holders who change jobs. Ontario's recent budget takes an initial step to correct this discrimination, but does not go far enough, especially when compared with some provinces that have done much more to remove this discrimination.
When a pensioned employee quits, a choice is made to keep money invested in the pension plan or to take out the money and invest it in a locked-in RRSP (either called Locked-in Funds or Locked-in Retirement Accounts, LIRAs). The money cannot be accessed until a certain age, such as at retirement (this depends on federal and provincial pension legislation) and these funds must then be invested in a life annuity or Life Income Fund. With the Life Income Fund, the investor draws out money subject to mandated maximum and minimum percentages of assets held in the plan. At the age of 80, remaining investments must be converted to an annuity (with 60% spousal benefit) or transferred to a Life Retirement Income Fund that allows the holders to manage their own money (but still subject to mandated withdrawal rules).
Nonetheless, with the locked-in rules for pension transfers, why even bother with a defined-contribution plan since employees could have the same risk and return, but much greater flexibility, with an employer-provided RRSP when changing jobs?
The usual argument against repealing lock-in provisions is a paternalistic one: Workers don't know what is best for them and will cash out their pension savings before retirement. This nanny-state view has been a basis for policy in some other countries, notably the United States, which has imposed penalties on early withdrawals from retirement savings plans. Canada, however, has smartly avoided this trap by enabling individuals to have full access to their RRSPs without extra penalty for withdrawals before retirement. Not only does this give greater flexibility for individuals, but also provides a significant incentive to invest in retirement funds, since individuals need not fear that their money is effectively locked up when facing unexpected contingencies. Locked-in RRSPs are therefore particularly unfair to pensioned workers since they do have the same rights to access their retirement funds.
With the recent budget, Ontario is proposing to allow individuals to unlock 25% of their funds no earlier than the early retirement date (usually 55 years of age), beginning in 2008, after consultations. At this time, individuals can only access their own money if they show special need, once they follow a costly bureaucratic procedure. According to the Canadian Association for Retired Persons, during the period of April, 2003, to March, 2006, almost 30,000 pensioners applied for relief, filling out a 23-page document costing anywhere from$200 to$600 when the application succeeded. Only 52 were rejected outright, leading to wonder as to whether this bureaucratic process is necessary. While the Ontario budget is a baby step in the right direction, NDP MPP Andrea Horwath proposed in a private bill, supported by Conservative Bob Runciman, to allow 100% access to locked-in funds. This would provide similar treatment to that available to many MLAs, who are given access to their occupational pension savings.
Some provinces have gone much further than Ontario to relieve pensioners from onerous rules after leaving their employer. Saskatchewan has been the most progressive province, providing for the full transfer of pension funds to RRSPs or RRIFs. Alberta and Manitoba allow pensioned workers to access 50% of their LIF funds, although Manitoba will soon be moving to full access. The only federal initiative so far in this regard is to unlock funds for federal employees at the age of 90 (we should all live that long!).
It is time to unlock the chains put on pension savings of employees who change jobs or retire. Doing so will help contribute to labour mobility, better retirement plans and, ultimately, a stronger economy.
- - -
- Jack M. Mintz is Professor of Business Economics, J. L. Rotman School of Management, University of Toronto, and Visiting Professor, New York University Law School.
© National Post 2007
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Ontario Forum
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posted in Petition to unlock locked in pensions
28 March 2007 9:09 AM
Hi I would like to introduce Professor Jack M. Mintz.
He just wrote an article on why locked in pensions should be unlocked. It was posted in the Toronto National Post.
I will be posting following this.
Jack M. Mintz
Professor of Business Economics
Degrees
PhD, University of Essex
MA, Queen's University
BA, University of Alberta
Positions Held
Academic Positions
Current
Professor, Business Economics, Rotman School of Management
Current
Director, International Tax Program, Rotman School of Management
1999- 2006
President and CEO, C. D. Howe Institute
1993-1995
Associate Dean (Academic), Faculty of Management, University of Toronto
1984-1989
Associate Professor, Queen's University
1986
Visiting Associate Professor, Department of Economics, Carleton University
1981, 1985
Visiting Researcher, CORE, Belgium
1978-1984
Assistant Professor, Department of Economics, Queen's University
Non-Academic Positions
1984-1985
Special Advisor to Assistant Deputy Minister, Corporate Tax Research, Department of Finance, Government of Canada
1974-1975, 1976
Consultant, Economic Council of Canada, Financial Markets Group
1971-1973
Budget Bureau and Fiscal Planning, Alberta Government
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Ontario Forum
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posted in Petition to unlock locked in pensions
19 March 2007 9:44 AM
Hi : This was a commentary on Owensound Radio.
Please write your MPP and the Leaders and tell them your story or just tell them you want these pensions unlocked the same as the other 4 provinces.
Hon.James J Bradley Minister Responsible for Seniors
jbradley.mpp@liberal.ola.org
Hon Dalton McGuinty Premier
dmcguinty.mpp.co@liberal.ola.org
Hon Greg Sorbara Finance Minister
gsorbara.mpp.co@liberal.ola.org
Howard Hampton Leader of the NDP
hhampton-qp@ndp.on.ca
John Tory Leader of the Progressive Conservative Party
john.tory@pc.ola.org
And also please sign the online petition at
http://www.petitiononline.com/WRC101/petition.html
Take Care Bill Costello
Commentary can be heard on 560 CFOS Tuesdays & Thursdays at 7:08 am and 5:08 pm
Ross Kentner Commentary for Thursday, March 15th 2007:
People who heard my recent comment on Employment Insurance said they had never heard me so angry. Well, here's another government scam that has me steamed. This time it's the Ontario Government that is ripping us off. Now that I'm 65 and thinking of retiring in another five years, I'm looking at how I hope to fund my future.
It's not a surprise to find I could have started saving sooner or could have been a smarter investor over time. But it's a shock to learn that the instrument I thought was designed to furnish retirement income is not mine to use as I wish. And, while it may warehouse me when I can't get around anymore, it will pay me at under the poverty rate when I finally have a chance to pursue hobbies or travel. That's because, like many of you listening, my retirement account is locked-in.
You probably thought locked-in meant you can't access your retirement account until you qualify to retire. Actually, it means the government has usurped control of your money and will only give it back to you in dribs and drabs…from 2.5 to 6.3 per cent a year. Do the math…it's peanuts! You can't live in Ontario in 2007 on that and you sure as heck won't be able to live on it if you don't retire for another 15 or 20 years!
Why did I call this a scam? The formula the government uses assumes you'll live to 90. But according to Statistics Canada, less than one half of one per cent of us ever reach 90. If I die at 77, which is the average for Canadian men, I'll never see by far the greater percentage of the money that I and, at one time, my employer paid into my retirement fund.
Can I prove this is a government-sponsored scam? What better proof than this? In 1999 when pension plans for Members of the Legislature were eliminated, a special bill was passed enabling MPPs to transfer their pensions to their personal RRSPs. Our elected members have full control over their previous pension funds. In other words, as things stand now, there is a law for Members of the Provincial Parliament and another law for the rest of us.
In opposition, the Liberals criticized this double standard. In office, they have done nothing about it. Andrea Horwath, MPP for Hamilton East has moved a private member's bill to give all Ontario residents the option to transfer their locked-in pension funds to a RRIF. Bill 175 must be passed. There is no reason on earth for a government to control a taxpayer's access to their own money. There's even less when MPPs have unlocked their own pensions
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Ontario Forum
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posted in Petition to unlock locked in pensions
12 March 2007 6:11 PM
I received the Federation Of Labour article in my E-Mail and it made my
blood boil.
All MPP's of Ontario benefited the legislative change to the Gold
Plated pensions in 1999.
61 MPP's were allowed to unlock their pensions in 1999 and now all
MPP's have a unlocked RRSP of which the tax payers pay 10% of their
current salary.
With all this having happened Many MPP's still have the nerve after 8
years of discrimination against the people of Ontario .
They refuse to unlock the locked in pensions for the people of Ontario.
Please mail the Premier and Finance Minister of Ontario and tell them
this Discrimination has to stop
Also please sign the online petition at.
http://www.petitiononline.com/WRC101/petition.html
Thank You Bill Costello
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Ontario Forum
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