Below is a transcript of a letter that Minister of Finance Jim Flaherty wrote to Financial Institutions on November 20th 2008. CARP recommends that seniors print this letter and be prepared to produce it when preparing their RRIF withdrawls:
I am writing to seek your cooperation on an important issue for Canadian seniors, withdrawals from Registered Retirement Income Funds. Many seniors are understandably concerned about the impact of the recent deterioration in market conditions on their financial security and I believe it is important to ensure that they do not face undue obstacles in managing their assets in these challenging times.
A common misconception is that seniors must sell assets to satisfy RRIF withdrawal requirements, something many may not want to do at this time given the recent decline in value of many assets. The income tax rules permit “in-kind” asset transfers to meet the minimum withdrawal requirements – they do not require the sale of assets.
It has been brought to my attention that, in certain circumstances, there may be obstacles to in-kind asset transfers within financial institutions. It has also been suggested that some financial institutions may not be advising clients of this option where it does exist.
To address this issue, 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. I would ask that you ensure that all clients with RRIFs be made aware that this option exists.
I would like to hear from you by Friday, November 28 to confirm that steps have been taken to ensure that in-kind asset transfers between RRIFs and other accounts are possible at no cost to the client and that RRIF clients will be made aware of this option.
Thank you for your cooperation.
James M. Flaherty
___________________________________ For further information, media may contact:
Chisholm Pothier Press Secretary Office of the Minister of Finance
613-996-7861 David Gamble
Media Relations Department of Finance 613-996-8080
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To see a copy of the letter on the Ministry webpage click Click here