Changes to Pension Benefits Regulations Announced
ENVIRONMENT/LABOUR--Changes to Pension Benefits Regulations Announced
Nova Scotia's pension rules will soon be more flexible and responsive to the needs of about 110,000 pension plan members. Changes to the province's pension legislation announced today, Dec. 31, apply to people who work in private industry and municipal governments. They come into effect on Jan. 1, 2003.
"We're pleased to make these improvements to the Pension Act to give Nova Scotians more control over their retirement funds," said Ron Russell, Minister of Environment and Labour. "I thank all those who helped identify these improvements by participating in the public consultation process."
Many of the changes to the pension benefits regulations will harmonize Nova Scotia's pension rules with those of other Canadian jurisdictions.
Some of the most important adjustments for individuals are those to life income funds (LIF). A life income fund is a registered retirement income fund into which locked-in pension funds can be transferred from a pension plan. The LIF is subject to the Income Tax Act (Canada) and the Pension Benefits Act.
Two of the biggest improvements to the life income fund give plan members more control over their retirement funds.
The first change is the removal of the requirement to buy a life annuity by age 80. This means payments can continue under the LIF until the owner dies.
Under the second change, LIF owners can receive temporary income from their plan until age 65, when they are entitled to receive Old Age Security benefits. As well, for people who have reached age 65, small LIFs may be unlocked.
The new regulations were developed following approval of revisions to the act earlier this year and after a public consultation on draft regulations in late summer and early fall. The revised act and new regulations are available by contacting the superintendent of pensions at 902-424-8915 or on the Department of Environment and Labour Web site, at www.gov.ns.ca/enla/pensions/ .