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The following comment makes the point that the employer set up the plan for "retirement" not so that it could be used to buy extras sooner.

 

-----Original Message-----
From: wxxxxxxxxxr @wxxxxxxx.com

Sent: Friday, January 17, 2003 10:09 PM
To: taxman@centa.com
Subject: Re: [CEN-TAPEDE] Can I get money out of a "LOCKED IN" RRSP -
From www.jurock.com Ask an Expert : A Question for You


Quoting centapede-admin@lists.belcarra.com:

I am an employer with a Lock-In Pension Plan - and we have set this up as a
locked in plan for that very reason to have it locked in until retirement.  If
they want to use these funds for outside investment then you should not be
contributing to the "Pension Plan".  As an employer I am investing the company
money to the employee for retirement not to buy the second home, cottage at the
lake, the boat or whatever seems to be a reason today to with draw the money. 
Therefore, I am in favor of the "Locked In Plans" as the majority of our
employees could not and would not be even thinking of retirement if it was not
for the companies contribution.  We match dollar for dollar.

My thoughts.  

This is a great answer and I wish to add to it.  About three weeks ago, one of our clients phoned us with a locked in problem.

 

He had just gone bankrupt and was totally "pissed off" that he could not take his $80,000 or so out of his locked in plan and use it to buy a piece of property he could use to start a new business. 

 

His comments were something like: "it's useless, what am I going to get, $400 a month or something?"

 

He had completely missed the point that if the RRSP was "NOT" a LOCKED IN RRSP, he would have lost it and the "measly" $400 a month for life.

> > My question is: Canadian-specific
> >
> > QUESTION: I have a locked in RRSP, I paid half and my old employer paid
> > other half is there a
> > way for me to take my half of the moneys and invest in property?
> >
> > --------------------------------------------------------------------------
> -
> >
> > HTTP_REFERER: http://www2.jurock.com/askexpert/ask.asp?aid=121&cid=63
> > REMOTE_ADDR: 24.84.217.12
> ----------------------
> David Ingram replies:  I gave this question to George Hatton, a Cartier
> Partners RRSP expert in our office at (604) 913-9133 - his answer follows:
> --
>
> -----Original Message-----
> From: George Hatton [mailto:hatton@centa.com]
> Sent: Friday, January 17, 2003 2:42 PM
> To: taxman@centa.com
> Subject: Re: Jurock.com 'Ask an Expert': A Question for You
>
>
> A locked RRSP is just that, locked-in, irrespective of where the money
> originated. The quick answer therefore is No, the employee contributor's
> share is treated the same as the employer's.  The restriction even applies
> to the Home Buyers' Plan, Life Long Learning Plan and the like.
>
> Having said that, some provinces in Canada are reducing the restrictions on
> locked-in money.  Saskatchewan has just passed legislation last year which
> creates other terms and conditions.  Other provinces seem to be embracing
> the Saskatchewan idea, so the answer could change based on the jurisdiction
> of the locked-in provision. We need to know the legislation governing the
> Locked-In agreement before being able to give a definitive response.
>
> George Hatton
> Cartier Partners Financial Services
> in Association with David Ingram.
>