People hoping to access money in their locked-in retirement accounts before Christmas are out of luck.
The province is moving ahead with changes to pension legislation that will allow some people to withdraw money from their plan, but the earliest they will be able to apply is March 1, 2021.
Province moving ahead with pension unlocking legislation. However, earliest people can apply is March 1st. @VOCMNEWS
— Brian Callahan (@briancallahan67) December 10, 2020
The delay is necessary to allow various financial institutions the time to prepare and arrange for the changes that are coming.
The types of plans eligible are locked-in retirement accounts or LIRAs, life-income funds and locked-in retirement income funds. It does not apply to people currently contributing to a pension plan or already receiving retirement income from a plan.
The changes align with other provinces and are primarily aimed at people suffering financial hardship, particularly in light of the COVID-19 pandemic.
Criteria to qualify include an income below $41,000 this year; medical and disability expenses that are causing hardship; and mortgage or rent arrears that could cause eviction. There are limits to how much can be withdrawn each year, which will have to be calculated and declared in applications for the unlocking.
NDP Leader Says Unlocking Pensions ‘Not the Way to Go’
The provincial government is introducing legislation today to help unlock some pensions to help people adversely affected by COVID-19, but the NDP say it is not the way to go.
Members of the NDP caucus submitted their concerns to the provincial government after speaking with credit counsellors, financial advisors and pension consultants among others.
Leader Alison Coffin says she would not advise the unlocking of pensions. She says the legislation, as written, will only take effect in March of 2021, and she’s left wondering what the motivation is to rush it through before the end of the year.
She suggests a better way to address the needs of those struggling would be to discuss an extension of mortgage deferrals or interest-free loans.
