Wednesday, August 18, 2021

 

Manitoba passes Pension Act amendments, making it easier to unlock funds

Amendments go into effect Oct. 1

Finance Minister Scott Fielding says the legislation will give Manitobans more flexibility with their pensions. (Mikaela MacKenzie/The Canadian Press)

Manitobans with pensions will soon be able to unlock some of their money under certain conditions without needing the government to approve requests, the finance minister announced on Tuesday.

Effective Oct. 1, the Pension Benefits Amendment Act, which was announced in 2019, will allow Manitobans greater and easier access to their pension funds if they're facing financial hardships.

"Manitobans work hard for their pensions and we want to ensure those funds are protected while at the same time giving them greater flexibility to meet their needs," Finance Minister Scott Fielding said in a news release on Tuesday. 

The amendment will allow Manitobans of all ages with funds in Manitoba locked-in accounts at a financial institution to unlock their money when under certain financial hardships, such as low expected income, threat of eviction, mortgage foreclosure and medical or dental expenses not covered by other insurance or government programs.

Manitobans 65 and older will have the option to unlock all of their funds from locked-in retirement accounts (LIRA) or life income funds (LIF) with a financial institution.

People in relationships who break up will also be able to split pension assets based on their shared circumstances, rather than the currently mandated 50/50 split or no division at all.

The amendments are an effort to reduce red tape and administrative inefficiencies for pensioners, financial institutions and the government, Fielding said.

The changes are similar to what's been done in other provinces, he said, and were made after the provincial government received recommendations from the Pension Commission of Manitoba and feedback from online consultation.

Manitoba Federation of Labour president Kevin Rebeck considers the changes a gamble.

"Most people aren't actuaries or pension experts," Rebeck said.

"To unlock your funds and go gamble it in the market in the hopes that you might do better while people are taking additional fees from it — the reality is most people are much better off if their money is kept in the [pension] plan."

Rebeck would rather see the province call on other provinces and the federal government to create a pension insurance program "to make sure that when companies like Sears go under that workers aren't the last ones paid and get screwed at the end," he said.

"This this is a move in the wrong direction, in my mind."

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