The Investment Dealers Association of Canada has written to John Manley, Deputy Prime Minister and Minister of Finance, on the issue of transfers of RRIF plans between institutions.

The IDA says that some of its members are concerned that when clients holding RRIFs decide to transfer their account, the relinquishing institution must pay out the balance of the current year’s payments to reach the minimum allocated payment for the year. “While this may be achieved in a number of ways, it may be contrary to the client’s wishes and have implications on a client’s return on investment,” it says.

“It is important to note that this issue affects elderly Canadians, a growing demographic of the Canadian population. This problem, if not addressed, will only increase, as can be seen with projected increases in Canada’s senior population and the growth in the RRIF market,” the IDA points out.

It suggests that the Income Tax Act be changed from having the delivering institution complete the minimum payment, to having the delivering institution passing sufficient information to the receiving institution to ensure the payment is made. “This is already in place for RRIF transfers made within the same specimen plan (the identification number assigned by CCRA to issuers of registered plans),” it says. “To enforce this, the industry already has a process in place. This could be extended to transfers to other specimen plans very easily.”

“We believe that our proposed solution would alleviate the number of complaints our members currently receive regarding this legislation,” it concludes.