A new regulation spells changes to the treatment of locked-in accounts in Ontario.
On June 19, a regulation was made under the Pension Benefits Act that makes numerous changes to the rules governing locked-in accounts — including Locked-In Retirement Accounts, old and new Life Income Funds, and Locked-In Retirement Income Funds.
A notice from the Financial Services Commission of Ontario spells out those key changes, including the availablility of one-time opportunities to withdraw or transfer amounts from these accounts, and the obligations of financial institutions to inform their clients of these opportunities.
According to FSCO, the key changes are:
\u2022 from Jan. 1, 2011 to April 30, 2012, owners of Old LIFs and LRIFs will have a one-time opportunity to withdraw in cash or transfer to an RRSP or RRIF up to 50% of the total market value of the assets of the fund;
\u2022 from Jan. 1, 2010 to Dec. 31, 2010\u00b8owners of New LIFs will have a one-time opportunity to withdraw in cash or transfer to an RRSP or RRIF an additional 25% of the total market value of the assets of the fund that were transferred into their New LIF account on or before Dec. 31, 2009;
\u2022 after Dec. 31, 2009, anyone who purchases a New LIF will have a one-time opportunity to withdraw in cash or transfer to an RRSP or RRIF up to 50% of the total market value of the assets of the fund;
\u2022 on or before Sept. 30, 2010, financial institutions are required to give notice of these and other related changes to owners of Old LIFs and LRIFs;
\u2022 on or before Jan. 1, 2010, financial institutions are required to give notice of these and other related changes to owners of New LIFs; and
\u2022 as of January 1, 2011, all of the rules that govern locked-in retirement accounts (LIRAs) are consolidated into Schedule 3 under the regulation.
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