Ottawa, October 4, 2006
Archived - More Flexibility to Seniors in the Management of Their Life Income Funds
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The Honourable Jim Flaherty, Minister of Finance, today announced that the regulations to immediately remove the requirement to convert federally regulated life income funds (LIFs) to life annuities at age 80 have now come into force. The regulations were published in the Canada Gazette.
"Seniors have asked for a greater degree of control over their retirement savings and this initiative will help give it to them," stated Minister Flaherty.
A LIF is a special registered retirement income fund into which funds from pension plans or other locked-in retirement funds can be transferred. Typically, they are used by individuals who are going through a change in employment and as a result have to convert their locked-in employer sponsored pension plan into a transferable investment vehicle, or who simply want more flexibility than a traditional life annuity provides.
Under these changes, maximum permitted withdrawals for those aged 80-90 are to be calculated by extending the method previously used for those under the age of 80 rather than requiring that all remaining funds be converted into an annuity. Those 90 and over will be allowed to withdraw 100 per cent of the funds in their LIF.
Today's announced changes apply only to federally regulated LIFs.
For further information, media may contact:
Office of the Minister of Finance
Department of Finance
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