Ontario is making it easier for people to access locked-in retirement funds. The province is shifting responsibility for providing access in cases of financial hardship from regulators to financial firms directly.
The Ontario Ministry of Finance said Monday that it is restructuring its financial hardship unlocking program in a number of ways.
Beginning January 1, 2014, individuals will be able to apply directly to their financial institution for financial hardship withdrawals from locked-in funds — which are amounts transferred from a registered pension plan into a locked-in account (such as locked-in retirement accounts, life income funds and locked-in retirement income funds) — rather than to the Superintendent of Financial Services, Finance says.
Additionally, the government is reducing the amount of evidence required to authorize a withdrawal, and the asset test that determines how much can be unlocked from an account will be replaced with a maximum withdrawal limit, it reports. The seven criteria under which an applicant can apply for financial hardship unlocking will be consolidated into four: rental or mortgage arrears, medical expenses, payment of first and last month’s rent and low income.
“A fair society helps individuals and families achieve security for retirement, helping to ensure that their well-being is not jeopardized in financial hardship. These measures will make it easier for those struggling with loss of income or medical expenses to get access to their locked-in accounts,” said finance minister Charles Sousa.