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Theodora Carroll's Submission in Response to Finance Canada's Regulatory Framework for Federally Regulated Defined Benefit Pension Plans consultation:

To: Superintendent of Financial Institutions, Government of Canada, Ottawa

I would like to register my concern and dismay that in the recent Consultation Paper by the Department of Finance regarding potential changes to the Pension Benefits Standards Act (1985), which governs plans under Federal jurisdiction, that little or no mention is made about Locked-in RRSPs. This is a system that needs urgent revising, now. The failure of the Department of Finance and your own department of Financial Institutions to address the anachronism and unfairness of the Locked-in RRSP is not only unfortunate and short-sighted, but it fails to recognize the hardship the present system puts on many people who have Locked-in RRSPs.

It is more than time for Ottawa to follow the lead of provinces like Ontario to allow pension recipients under its pension jurisdiction to access locked-in money for a wide variety of reasons. These include inter alia those who are the most vulnerable, who are in poor economic circumstances (poverty), who have discovered their life expectancy has been shortened through disease or accident, and who are faced with the possibility of losing their homes. As pension recipients who have contributed to the Locked-in RRSP or who have been awarded half of a Locked-in RRSP through a court in divorce proceedings, they/we should not be treated like numbskulls by the Finance Department, as being incapable of handling their/our own money. It is our money and we should be allowed to have access to it, and not be treated paternalistically or subjected to the run-around machinations of bureaucracy.

It is patronizing for well-paid bureaucrats to tell vulnerable pensioners that they can make submissions to the Department or courts if they want to access locked-in plans, when those same people lack the financial wherewithal or savvy or support groups to fight such battles. That is patently unfair and unjust.

Also, the rigid rules surrounding locked-in plans means that if people want to consolidate their investment portfolios, by combining their RRSP with their Locked-in RRSP, they cannot and are not allowed to. This makes for very inefficient and ineffective investing, as well as it increases investing costs. So on the one hand the Finance Dept. purports to "protect" pensioners from their possible ineptitude and on the other hand prevents pensioners who try to organize and operate a responsibily invested portfolio from doing so. This is both contradictory and hypocritical on the Federal Government's part.

A second issue that needs addressing is that of the failure of the UK Government to index pensions paid to pensioners residing in Canada, while indexing those same pensions to pensioners residing in the United States, Germany and other non-Commonwealth countries. This has created alot of hardship for British-born pensioners living in Canada and for Canadian pensioners, usually women with little other income, who have been accorded a portion of a UK pension through divorce proceedings and settlements. The failure of the UK Government to live up to its pension commitments by indexing these pensions, which are indexed in the UK, imposes an additional financial burden on both the pensioners in Canada themselves and on the Canadian Government which has to make up the shortfall through its GIS sytem. The Canadian Association of British Pensioners, as you probably know, has a case before the House of Lords in England, but CABP needs on-going strong political support from Canada.

I would appreciate a reply to my e-mail and my concerns. Thank you.


Theodora Carroll