GENERAL
Pension Income Splitting

The governments of Manitoba, Alberta and Saskatchewan announced in their respective provincial budgets that they will support the new federal pension income-splitting measure. Effective January 1, 2007, a higher income spouse can transfer up to 50% of eligible pension income to a lower-income spouse by joint election.

Also paralleling income tax changes announced in the 2007 federal budget, Manitoba and Alberta announced that they will increase the age limit for maturing RPPs and RRSPs from 69 to 71, in effect for the 2007 taxation year.

ALBERTA
Pension Law Review

The Alberta government announced in the 2007 budget speech that it will review the Employment Pension Plans Act to ensure that the province’s pension system can attract and retain workers, treats employees and employers fairly, and is competitive with other jurisdictions. The government is also considering creating an Alberta Pension Plan to improve the benefits available to Albertans.

BRITISH COLUMBIA
Pension Division Legislation Reform

British Columbia’s Ministry of the Attorney General launched a consultation process relating to reform of the province’s pension division legislation, contained in Part 6 of the Family Relations Act. The Attorney General asked the British Columbia Law Institute(BCLI)to review Part 6 of the Family Relations Act, and the BCLI established a committee to carry out this task. For highlights of the committee’s recommendations, visit: http://www.ag.gov.bc.ca/legislation/pdf/Chapter3-Pensions.pdf.

MANITOBA
Registered Retirement Savings Protection Act

Manitoba Finance announced that the province’s Registered Retirement Savings Protection Act will come into force on November 1, 2007. The Act extends the creditor protection currently accorded only to savings held in registered pension plans, to retirement savings held in deferred profit sharing plans, registered retirement savings plans and registered retirement income funds.

Variable Benefit under DC Plans

As of June 12, 2007, pension plans with defined contribution provisions can offer a Variable Benefit(VB)pension directly from the pension plan through the establishment of a variable benefit account. Members of a plan permitting VB pensions have the option of receiving pension benefits directly from the plan. Those electing a VB pension can determine how much income is withdrawn annually, subject to the minimum withdrawal required by the Income Tax Act and a maximum withdrawal determined by regulations. Investment earnings continue to grow on a tax-sheltered basis.

Pension Reform Still on Hold

On April 19, 2005, Manitoba’s Pension Benefits Amendment Act received royal assent. The Act has not yet been proclaimed in force.

© Copyright 2007 Rogers Publishing Ltd.

 

Copyright © 2020 Transcontinental Media G.P. This article first appeared in Benefits Canada.

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