Unlocking LIFS in Ontario is a first step in the right direction.
On January 1 2008 Locked-In Funds (LIFS) which are registered in Ontario can be unlocked by 25%. The current LIF can then be rolled into a new LIF in which 25% of the principal can be unlocked within 60 days after its creation and the balance will remain locked-in, subject to all of the current policies regarding withdrawals from LIFs. In addition, Ontario LIF-holders who live outside of the country for two years can unlock the principal 100%.
Unlocking can be done in several ways. The unlocked portion can be totally withdrawn from the locked-in RRSP, which may incur heavy taxation, depending on the amount, since all funds withdrawn from a RRSP are taxed. Or, the unlocked portion of the principal can be left within the RRSP as an unlocked RRSP and the principal accessed if, and as necessary, as would be done with the principal in any RRSP – thereby paying the accompanying tax and using the principal in smaller bites.
For details go to the Financial Services Commission of Ontario (FSCO) website at www.fsco.gov.on.ca or call 416-250-7250/1-800-668-0128 (toll free 24 hours).
The new Ontario unlocking policy is a step in the right direction – but just a first step on the road to equality, parity and fairness with the 59 Ontario MPPs who were allowed to access 100% of the principal in their occupational pension in 1999. This action set a precedent for unlocking LIFs 100% in Ontario for all LIF-holders.
Ontario MPPs Who Have Unlocked 100%
“21. (2) (Criteria re invasion of privacy) A head, in determining whether a disclosure of personal information constitutes an unjustifiable invasion of personal privacy, shall consider all the relevant circumstances, including whether,
(a) the disclosure is desirable for the purpose of subjecting the activities of the Government of Ontario and its agencies to public scrutiny;
(d) the personal information is relevant to a fair determination of the rights affecting the person who made the request.
21. (4) (Limitation), “despite subsection (3), a disclosure does not constitute an unjustified invasion of personal privacy if it discloses details of a license or permit or similar discretionary financial benefit conferred on an individual by an institution or a head of under similar circumstances where,
i) the individual represents 1 per cent or more of all persons and organizations in Ontario receiving a similar benefit. And
ii) the value of the benefit to the individual represents 1 per cent or more of the total value of similar benefits provided to other persons and organizations in Ontario.”