(April 12 – 18:10 ET) – The Office of the Superintendent of Financial Institutions is warning investors with locked-in RRSPs to beware of scams.

It says that it has discovered that some organizations are offering former pension plan members the opportunity to access a portion of their locked-in RRSP funds in return for a loan application. “These organizations advertise that they have found a loophole in the tax rules that allow for tax-free withdrawals of locked-in RRSP funds by former members. OSFI is concerned that these practices attempt to circumvent the requirements of the [Pensions Benefits Standards] Act to the detriment of the pension plan members.”

OSFI notes that the intent of the Act is to ensure the financial security of pension benefits upon retirement. It warns, “Any arrangement that contravenes the Act may threaten the financial security of the benefits for the members and their beneficiaries.”