CARP's 100% solution - Unlocking locked-in funds in Ontario for the twenty-first century

    TORONTO, March 28 /CNW/ - 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    Not only is the Government's paternalism outdated, but so is its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 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.


    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.

For further information:

For further information: Michelle Taylor, (416) 363-8748 ext. 236,,

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