The Newfoundland and Labrador government said today it is considering amendments to the Pensions Benefits Act that would allow individuals with locked-in pension accounts, but who are experiencing sufficient financial strain, early access to a portion of their retirement income.
A news release from Service NL said the COVID-19 pandemic has led to massive lay-offs and job losses, creating financial pressures for many individuals. As a result, the government has received numerous emails and calls from individuals with locked-in pensions seeking access to their retirement assets to assist with hardship caused by the pandemic.
“In response to requests from individuals looking to access locked-in pension funds, we are carefully considering options to meet their immediate financial needs,” said finance minister Tom Osborne in the release. “Determining the proper balance in providing early access to one’s retirement benefits and ensuring those savings are there for retirement is a complex issue, and it is important we explore all perspectives.
“This is a significant decision for government and we welcome input during the consultation process.”
Options are being considered for providing unlocking access to individuals who have previously transferred funds out of a pension plan into a locked-in retirement vehicle, or may do so in the future. However, the province added it will not consider options to allow unlocking of pension benefits for active pension plan members, consistent with other jurisdictions.
The release also notes it will not be a simple process to amend the Act since legislation that would change unlocking provisions could impact on many stakeholders. For example, providing general unlocking access could challenge the continued stability of a pension system. Therefore, says the release, sufficient analysis and consultation with stakeholders is required.
Individuals who have transferred funds from a registered pension plan into a locked-in retirement savings arrangement are encouraged to participate in that consultative process. To do so, visit engageNL to complete the online questionnaire. Written submissions are also being accepted and can be emailed to [email protected].
Feedback will be accepted until Sept. 30 of this year.
