Bill 175, Pension Benefits Amendment Act (Unlocking Pension Funds), 2006

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Bill 175 2006

An Act to amend the Pension Benefits Act to allow transfers of locked-in pension funds to registered retirement income funds

Note: This Act amends the Pension Benefits Act. For the legislative history of the Act, see Public Statutes - Detailed Legislative History on www.e-Laws.gov.on.ca.

Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

1. The Pension Benefits Act is amended by adding the following section:

Transfer to RRIF

67.1 (1) Despite anything in this Act or the regulations, a pension, deferred pension, pension benefit, annuity or prescribed retirement savings arrangement that results from a purchase or transfer under section 42, 43 or 48 or subsection 73 (2) to which a person is entitled may be transferred, in accordance with this section, to a registered retirement income fund described in subsection (5).

Application for transfer

(2) A person may make a transfer under subsection (1) by applying for the transfer in the prescribed manner.

One transfer

(3) A person may make a transfer under subsection (1) only once in respect of each pension, deferred pension, pension benefit, annuity or prescribed retirement savings arrangement described in that subsection.

Maximum amount for transfer

(4) The maximum amount that may be transferred is 100 per cent of the amount in the fund or account, as calculated on the day that the application for the transfer is made, less,

(a) any amounts that are or may become payable to a person who, on the day the application for transfer is made, is a spouse of the person applying for the transfer living separate and apart from him or her; and

(b) any amounts that are required to be paid on or after the day the application for transfer is made pursuant to any order of the court.

Requirement re RRIF

(5) The registered retirement income fund into which the amount under subsection (4) is transferred must be established in accordance with the Income Tax Act (Canada) and must have no maximum withdrawal limits.

Consent of spouse

(6) The Superintendent shall not permit the transfer under subsection (1) unless the spouse, if any, of the person applying for the transfer consents to the transfer.

Exception

(7) Subsection (6) does not apply if, at the time the person applies for the transfer, the spouse is living separate and apart from the person.

Commencement

2. (1) Subject to subsection (2), this Act comes into force on the day it receives Royal Assent.

(2) Section 1 comes into force on a day to be named by proclamation of the Lieutenant Governor.

Short title

3. The short title of this Act is the Pension Benefits Amendment Act (Unlocking Pension Funds), 2006.

EXPLANATORY NOTE

Currently, pension funds that are in "locked-in" accounts cannot be withdrawn except in certain specified circumstances. The Bill amends the Pension Benefits Act to allow up to the entire amount in the account to be transferred into a registered retirement income fund.