QUEEN’S PARK – Hamilton East MPP Andrea Horwath says she has the key that would allow seniors to unlock their locked-in pensions.
The NDP Pension Critic will introduce a private members bill today that would allow seniors to withdraw up to 100 per cent of their locked-in pension funds.
“Seniors want the right to access and control their own money and the McGuinty government should respect that right,” said Horwath.
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, Horwath said. But in Ontario, only a select number of MPPs have the freedom to unlock their pensions. For everyone else, pension funds that are in locked-in accounts cannot be withdrawn except in certain specified circumstances.
From April 2003 to March 2006, there were 29,821 people who applied to the Financial Services Commission of Ontario for permission to unlock their pensions. Of those, 26,296 were approved.
“At a time when so much is being said about offering choice for senior citizens, a law to let them choose whether or not to unlock their pension is long overdue,” Horwath said.
Horwath’s Pension Benefits Amendment Act, 2006, would amend the Pension Benefits Act to allow up to the entire amount in the account to be transferred into a registered retirement income fund.
The MPP says she’s heard from many seniors like Milverton’s Bill Nafziger who strongly object to the rule that says people can’t cash out until age 90 and are limited to withdrawals of 2.5 to 6.2 per cent of the principal they have locked up in annuities, LIRA, LIF or LRIF plans.
Bill Gleberzon, Director of Government Relations of CARP, Canada’s Association for the Fifty-Plus, said his group supports Horwath’s bill “100 per cent”.
"Unlocking locked-In funds will not cost the Province a single penny,” Gleberzon said. “It will end outmoded paternalism and enhance the independence and quality of life for those with LIFs. Allowing access to the principal in locked-in funds is the right and fair thing to do for Ontarians -- especially since a precedent was set in 1999 under Bill 27 when 61 MPPs were permitted to do so," he said.