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Don Mulligan's Submission in Response to Finance Canada's Regulatory Framework for Federally Regulated Defined Benefit Pension Plans consultation:
August 13, 2005
This is my submission to the Consultation (Item 1. below) about "Regulatory Framework for Federally Regulated Defined Benefit Pension Plans".
First of all, My name is Don Mulligan and I worked for the Canadian National Railways (I am covered by Items 2. and 3. below) from 1962 to 1991. In 1991 I resigned from the Company and transferred my Pension Plan into Locked-in Self-Directed RRSPs. Shortly thereafter I took up Financial Planning and worked at that for the next ten years. In today's standards there is not a lot of money in my plans but they are growing quite steadily.
I am saying that so that you know I am capable of looking after my own investments. I am now remarried and a non-resident of Canada living in the Philippines (with a young family).
As you all know, if something were to happen to me my wife would inherit my Locked-in RRSPs and they would immediately become "UNLOCKED" as Regular RRSPs for her. Regular RRSPs can be collapsed at any time. She, however, not being a Canadian, doesn't know anything about RRSPs (and wouldn't know how to do this). It doesn't seem right that I can contribute to something for most of my life and cannot do what I want with it, yet a spouse who does not contribute can have instant access to all of it.
It is my intention, while still alive, to set up a Trust for my wife and young children so they will be looked after. I CAN NOT do that under the present conditions.
Referring now to Item 4. below. ALL the Provinces have agreed: "that unlocking should be permitted in cases of shortened life expectancy, non-residency and for small amounts."
I respectfully submit that you adopt (pass into Law) this policy while they all still agree and get on with other negotiations.
Don Mulligan (Age 62)
Maramag, Bukidnon 8714, Mindanao, Philippines
1. Department of Finance Canada
- Consulting with Canadians - Active Consultations - Regulatory Framework for Federally Regulated Defined Benefit Pension Plans
Closing date: September 15, 2005
Who may respond:
This consultation is open to anybody interested in participating [Return]
2. "Private pension plans established for employees working in areas that fall under federal jurisdiction are subject to the PBSA. The PBSA covers some 1,200 pension plans or close to 10 per cent of the asset value of all registered plans in Canada; 428 of the federal plans are defined benefit pension plans. One of the main purposes of the PBSA is to set out minimum standards for federally registered pension plans to ensure that the rights and interests of pension plan members, retirees, and their beneficiaries are protected. Private pension plans, however, represent an agreement between stakeholders and the Government of Canada's role is to ensure that the framework is appropriate and enables all parties to make informed decisions." [Return]
3. OSFI is responsible for the regulation and supervision of federally registered private pension plans, which includes the Canadian National Pension Plan.
The federal Pension Benefits Standards Act, 1985 (PBSA) and its related Regulations does not permit the release of locked-in funds due to non-residency. [Return]
4. A great deal of work and effort has been done by CAPSA (Canadian Association of Pension Supervisory Authorities) getting ALL the Provinces to agree (2002 - 2004) "that unlocking should be permitted in cases of shortened life expectancy, non-residency and for small amounts." [Return]