Today, the Provincial Government announced that it is considering amendments to the Pensions Benefits Act regarding the unlocking of pension benefits. The amendment to the Act would allow individuals with locked in pension accounts early access to a portion of their retirement income, if experiencing sufficient financial strain.
The COVID-19 pandemic led to massive lay-offs and job losses, creating financial pressures for many individuals. Since its onset, the Provincial Government has received numerous emails and calls from individuals with locked-in pensions seeking access to retirement assets to assist with financial hardship due to COVID-19.
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. Newfoundland and Labrador will not consider options to allow unlocking of pension benefits for active pension plan members, consistent with other jurisdictions.
Pension legislation is complex and changes to unlocking provisions could have an impact on a wide variety of stakeholders. Providing general unlocking access could challenge the continued stability of the pension system, so 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 the consultations process. Visit engageNL to complete the online questionnaire. Written submissions are also being accepted and can be emailed to ThomasDuggan@gov.nl.ca.
Feedback will be accepted until September 30, 2020.
Quote
“In response to requests from individuals looking to access locked-in pension funds, we are carefully considering options to meet their immediate financial needs. 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.”
Honourable Tom Osborne
Minister of Service NL
– 30 –
Media contact
Krista Dalton
Service NL
709-729-4748, 685-6492
kristadalton@gov.nl.ca