Finance Minister Jim Flaherty has asked Canadian financial institutions to accommodate in-kind asset transfers between Registered Retirement Income Funds and other types of accounts for seniors.

In a letter to federally regulated financial institutions sent out on Thursday, Flaherty acknowledged that withdrawals from RRIFs are an important issue facing seniors given the recent deterioration in market conditions.

“It is important to ensure that they do not face undue obstacles in managing their assets in these challenging times,” Flaherty wrote.

He said a common misperception is that seniors must sell assets to satisfy RRIF withdrawal requirements, and reminded institutions that income tax rules permit in-kind asset transfers to meet the requirements – they do not require the sale of assets.

He said financial institutions should be advising clients of this option and removing any obstacles to in-kind asset transfers.

“I am expecting all financial institutions to accommodate in-kind transfers – at no cost to clients – or offer another solution that achieves the same result,” Flaherty wrote. “I would ask that you ensure that all clients with RRIFs be made aware that this option exists.”

Flaherty asked the institutions to respond by Nov. 28 to confirm that steps have been taken to ensure transfers are possible at no cost to the client and that RRIF clients will be made aware of this option.

IE