The first letter from the Ministry of Finance that rejected CARP’s original request for the list of the select MPPs had stated that the list did not exist. CARP subsequently rewrote its request for the list. The second rejection letter admitted that the Ministry had found the list. But, it pointed out that the list only included the names of 59 MPPs because the Canadian Revenue Agency miscounted the number (and the Ministry of Finance subsequently used the miscount) and one of the individuals on that list was a former Ombudsman. Secondly, the Ministry’s letter indicated that the transfer did not occur pursuant to Bill 27 in 1999 but in accordance with Section 21 of Part III of the MPPs Pension Act.
Whatever the actual number of MPPs and the actual legal authority for the transfer, it took place – and 59 MPPs, some of whom are still sitting in the Ontario Legislature, had 100% access to their occupational pensions in a manner discriminatorily denied to the other estimated 450,000 Ontarians with LIFs who will have only 25% access, based on the legislation passed by the votes of some of these same individuals.
We now await the results of our second appeal letter.
Erroneous Arguments Against Unlocking LIFS 100%
A number of justifications for limiting the unlocking of LIFs have been bruited about. Two of the most prominent are:
– If LIF-holders are permitted to unlock 100%, they will “squander” the money and be reduced to “wards of the state”.
No evidence is given for this sentiment which is more suited to the age of Charles Dickens. In fact, five years after Saskatchewan unlocked LIFs 100% — in effect, done away with them – no evidence of this sort of incident has surfaced.
– Unlocking LIFs 100% will undermine Defined Benefit Plans.
Experts such as Canada’s leading tax expert, Professor Jack Mintz, and Canada’s leading actuary, Malcolm Hamilton, reject this contention and, indeed, both support CARP’s campaign to unlock LIFs 100%. As does financial writer and publisher Gordon Pape, who presented his argument in the December issue of CARP’s magazine, CARP for the 50-Plus. (p.60- “Unlock LIFS! It’s time to allow older Canadians full access to their own money.”)
Survey of LIF-Holders
Last month, CARP ACTION ON LINE hosted a survey on unlocking LIFs. The author, William Kendal, a M.A. student at Simon Fraser University, reported his preliminary assessment of the responses:
“I have 621 responses. Responses are still trickling in slowly. I’ll be able to use most but some did not answer enough questions. It appears that so far the main reason people unlock is for re-investment, though there are, of course, many other reasons. The responses also seem to indicate very high financial and investment knowledge of respondents. Obviously I have a significant amount of statistical work to do, and there are other factors to consider, but the results seem to very much support a recommendation of adopting unconditional unlocking in BC.The responses clearly refute the basis for the paternalistic arguments that support the locking-in of private pensions.”
