Creditor Protection for RRSPs

ICAS leads the way for change

 

Effective March 4, 2003, legislation will come into force to exempt Saskatchewan RRSPs from seizure by creditors. The Registered Plan (Retirement Income) Exemption Act will provide creditor protection for three types of retirement funds: RRSPs, registered retirement income funds (RRIFs) and deferred profit sharing plans (DPSPs).

 

In 1995, the Institute of Chartered Accountants of Saskatchewan brought this issue to the attention of the government. We have been working with the government since that time to make creditor protection a reality. The seizure of RRSPs stifled small business and entrepreneurship and the Institute urged the government to take a leadership role on this issue.

 

Saskatchewan is the first province to enact legislation to protect registered retirement savings plans (RRSPs) and other registered funds from creditors in the event of bankruptcy. This change will provide the same level of protection from creditors for retirement savings in these registered plans as the pension plans of wage earners receive.

 

Currently, company pension plans are generally exempt from collection by creditors to ensure people are not left destitute in retirement due to bankruptcy. Self-employed people, however, do not usually have pension plans.

 

The act is based on the national bill and other provinces are expected to adopt similar legislation.

 

This is great news and a huge step towards protecting our members and their clients/employers from unfair liability issues!

 

If you want more information, please contact Marilyn Leier at 306-791-4142 or e-mail m.leier@icas.sk.ca.

Marilyn Leier

Institute of Chartered Accountants

  of Saskatchewan

830 - 1801 Hamilton Street

REGINA SK  S4P 4B4

Phone: 306-791-4142

Fax: 306-569-8288

E-mail: m.leier@icas.sk.ca