Bill 116 2008

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 the Table of Consolidated 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 to which a person is or will be entitled may be transferred, in accordance with this section, to a registered retirement income fund described in subsection (6).

Application for transfer

   (2)  An application for a transfer under subsection (1) shall be made in the prescribed manner.

Minimum age

   (3)  A person may make a transfer under subsection (1) if, when the person signs the application,

  (a)  he or she is at least 55 years of age; or

  (b)  if the pension plan provides for retirement at an earlier age, he or she has attained that earlier age.

One transfer

   (4)  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

   (5)  The maximum amount that may be transferred is 100 per cent of the commuted value of the fund or account that the person is or will become entitled to, as calculated on the day 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 a court.

Requirement re RRIF

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

Direct transfer

   (7)  The amount under subsection (5) shall be transferred directly from the fund or account into the registered retirement income fund.

Consent of spouse

   (8)  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

   (9)  Subsection (8) 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.  This Act comes into force on the day it receives Royal Assent.

Short title

   3.  The short title of this Act is the Pension Benefits Amendment Act (Unlocking Pension Funds), 2008.

EXPLANATORY NOTE

Currently, pension funds that are in locked-in accounts cannot be withdrawn except in 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.  The transfer can be made at age 55 or, if the pension plan provides for retirement at an earlier age, at that age.