Newfoundland and Labrador has introduced legislative changes that will protect assets held in capital accumulation plans from being seized by a plan holder’s creditors, says a Mercer Communiqué.
This legislation is effective April 5, 2007.
“Under the new rules, assets held in a DPSP, RRSP, or RRIF will be protected against seizure by a plan holder’s creditors as long as those assets remain in the plan,” the Communiqué says. “Transfers of assets between these plans are also protected.”
Creditor protections do not affect the collection of support payments payable under Newfoundland and Labrador’s support orders enforcement legislation. As a result, DPSP, RRSP and RRIF assets will be available to spouses and children that have a support order against the plan member.
Like registered pension plans, the protection granted to RRSP, DPSP, and RRIF assets is not extended to payments made from these plans. Once assets are paid to the plan member, they are generally available to creditors under ordinary enforcement procedures.
Newfoundland and Labrador is the fourth province to extend creditor protections to these types of plans, joining Manitoba, Prince Edward Island and Saskatchewan. In the future, similar legislation is expected from other Canadian jurisdictions.
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