Amendments to the Pension Benefits Act (PBA) through bill 8 and accompanying regulations will modernize the legislation and create a framework that protects individuals in times of financial hardship and provides greater and easier access to locked-in funds.
“Manitobans work hard for their pensions and we want to ensure those funds are protected while at the same time giving them greater flexibility to meet their needs,” said Finance Minister Scott Fielding. “The amendments give Manitobans more access to their own money including in times of severe financial hardship.”
The changes are based on recommendations from the Pension Commission of Manitoba and feedback from online consultations, as well as being informed by developments in other provinces. Bill 8 – the Pension Benefits Amendment Act will permit individuals, regardless of their age, with funds in Manitoba locked-in accounts with a financial institution to unlock funds under certain financial hardships, such as low expected income, eviction for rental arrears, mortgage foreclosure and medical/dental expenses not covered by other insurance/government programs. Individuals will be able to work with their financial institutions to access their locked-in funds in these circumstances.
Individuals aged 65 and over will have the option to unlock funds fully in Manitoba locked-in accounts such as a locked-in retirement account (LIRA) or life income fund (LIF) with a financial institution to give them greater flexibility to financially manage their own retirement.
Also, in the event of a relationship breakdown, the parties will now be in a position to split pension assets based on their shared circumstances, rather than the currently mandated 50-50 split or no division.
Fielding noted since the Manitoba government introduced this legislation, it has received hundreds of inquiries from Manitobans about partially unlocking pension funds to meet medical and other needs. He noted the changes better align Manitoba’s pension rules with the federal government and other provinces.
“As part of our pledge to Manitobans, we are reducing red tape by removing the requirement for government to approve requests for one-time 50 per cent unlocking of a person’s pension funds, available to individuals who are at least age 55, and we have introduced modernization measures to reduce administrative inefficiencies for individuals, financial institutions and government,” said Fielding.
The changes are effective Oct. 1.