Government Services
June 8, 2009
Consultations Get Underway into Amendments for the Pensions Benefit Act
(1997)
The Department of Government Services is looking for input from the
general public, pension plan sponsors and those involved in the pension
industry regarding the requirement that funds transferred from a
registered pension plan be placed in a locked-in retirement account.
"We have heard from many people who have left an employer with a pension
plan and have transferred their funds out of the plan but cannot access
it due to provincial legislation stating that it must go into a
locked-in retirement account," said the Honourable Kevin O'
Brien,
Minister of Government Services. "They have told us that this practice
creates some hardship for them because many times these individuals are
requesting access to their money for some urgent matter. Other provinces
have addressed this issue in various ways. We are interested in
exploring all options, including the total unlocking of pension funds."
Currently the Pensions Benefit Act (1997) stipulates that money
accumulated in a registered pension plan must remain locked in and only
used to provide a pension when an individual reaches the age of 55 or an
earlier retirement age specified in the pension plan.
The main objective of requiring funds to be locked in is to protect
pension money for retirement. However, many individuals are already
opting into Registered Retirement Savings Plans (RRSPs) which are not
locked in and can be accessed at any time. One of the questions the
Department of Government Services is asking is whether funds transferred
from a registered pension plan should be treated in a similar way as
RRSPs.
Other questions the department is seeking input on include whether all
funds should be unlocked when an individual leaves the plan before
retirement; if portions only should be unlocked; if unlocking should
only be permitted when there is a financial hardship determined through
a needs assessment; and if pension funds should only be unlocked after a
member reaches a certain age.
Letters regarding the consultation will be sent by mail to targeted
stakeholder groups. In addition, a discussion document can be viewed at
www.gs.gov.nl.ca/consultation/#current. Individuals can provide
comments by September 8, 2009, and address their comments to:
Julian McCarthy
Deputy Superintendent of Pensions
Department of Government Services
P.O. Box 8700
St. John'
s, NL A1B 4J6
709-729-6014 (telephone)
709-729-3205 (fax)
jmccarth@gov.nl.ca
"Pension issues can be very complicated and we are hoping that by
undertaking these consultations we may find a process that will simplify
pension matters for individuals, the financial services industry and the
Provincial Government," said Minister O'
Brien.
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Media contact:
Vanessa Colman-Sadd
Director of Communications
Department of Government Services
709-729-4860, 682-6593
vanessacolmansadd@gov.nl.ca
2009 06 08
11:00 a.m.
