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7 Responses to “FSNA National President writes to the Prime Minister”

1. Mary Dueck Says:
   November 4th, 2008 at 1:39 pm

   I recently became a widow and am most unhappy of the amount of pension I am receiving as a survivor spouse. How unfair it is, generally to the female in the family, that the income is so drastically lowered when a husband dies. I will never be able to use “our” money my husband put into the Federal Pension Plan all his life. My expenses remain the same as when my husband was alive, except for his entertainment, his food and his clothes. Household expenses and car expenses remain the same, in other words, all the big ticket items remain. I hope you are working at fixing this “big” problem with the Government. Sincerely, Mary Dueck

2. Joan Papushka Says:
   November 6th, 2008 at 11:24 am

   I understand how Mary Dueck must feel. As a single, we always have been faced with bearing all the big ticket items alone and on my passing my pension or any portion of it cannot be passed on to my family nor can my RIF be shared before the government takes their 50%.

   Taxing of singles should be reviewed.

   Sincerely, Joan Papushka

3. Marj. Lyttle Says:
   November 6th, 2008 at 11:27 am

   I sympatize with Mary! I could not agree more with how the surviving widow is discriminated against. No tax deductions or income splitting in our case. On another note, I had a small bungalow which I rented out for many years to supplement my government income. I recently had to sell as I am now retired and cannot deal with the problems with tenants and the damages incurred by them. I now have to pay taxes on the sale for 2008 as well I must pay the gov’t a big chunk in capital gains. This is my retirement money that must see me through my golden years. I do believe in the case of single widows who are depending on this money it is a real rip off to take this money from me. I am not a big corporate landlord who is flipping property. There must be something put in place to help people in my position. Thank you.

4. David Halfkenny Says:
   November 22nd, 2008 at 10:08 pm

   It is nice that someone wrote to the Prime Minister. I agree with Mary this is totally unfair. You must go back to when the penioner turns 65 and there is an adjustment made for CPP. We see our pension reduced and receive OAS. However, on the death of a pensioner the survivor receives 50% of the pension and a small survivor benefit from the CPP.

   This matter should be addressed as if they owned a home the same amount of money is required if they wish to maintain their lifestyle. They are expected to do this on 50% of the money they received before.

   This is a project that should be addressed separately. MP’s end up with 60%. Why the difference. This should be changed to about 80% as this should provide sufficient income for the person to survive.

   I wrote the finance minister and told him that in order for people to have a nice Xmas with all the doom and gloom. He could allow them to withdraw a bit of money from their RRSP’s. This should be done interest free. This would go a long way to stimulate the economy during this period of down turn.

5. Joe Morfitt Says:
   November 25th, 2008 at 11:05 am

   I too feel that surviving widows should receive a comparable pension to other pension survivors such as MPs, auto workers, Ontario Hydro, teachers, and so on.

   But I also think we should all be on the side of a widow who marries after age 60. After ten years of marriage my wife does not deserve for the House of Commons definition of a “Gold Digger” (See Bill C31)

6. David Halfkenny Says:
   November 25th, 2008 at 8:01 pm

   To Joe

   I agree. This has to be the most stupid regulation that was put on the books.

   However, this has been fought for many years. The MPs do a little tinkering but no one will take it on as an issue.

   I think Peter Stoffer of the NDP may taken on your fight. He appears to be the only one in the house that is concerned about these types of issues. He has done a lot for veterans.

7. Bernie Dussault Says:
   November 27th, 2008 at 9:52 am

   On November 20, 2008 The Minister of Finance sent an open letter regarding minimum withdrawal requirements for Registered Retirement Income Funds (RRIF) to federally regulated financial institutions. Below is an excerpt from his letter (this link will bring you to the entire letter http://www.fin.gc.ca/news08/08-093e.html) :

   “I am writing to seek your cooperation on an important issue for Canadian seniors, withdrawals from Registered Retirement Income Funds. Many seniors are understandably concerned about the impact of the recent deterioration in market conditions on their financial security and I believe it is important to ensure that they do not face undue obstacles in managing their assets in these challenging times. A common misconception is that seniors must sell assets to satisfy RRIF withdrawal requirements, something many may not want to do at this time given the recent decline in value of many assets. The income tax rules permit “in-kind” asset transfers to meet the minimum withdrawal requirements – they do not require the sale of assets. It has been brought to my attention that, in certain circumstances, there may be obstacles to in-kind asset transfers within financial institutions. It has also been suggested that some financial institutions may not be advising clients of this option where it does exist.

   To address this issue, I am expecting all financial institutions to accommodate in-kind transfers – at no cost to clients – or offer another solution that achieves the same result. I would ask that you ensure that all clients with RRIFs be made aware that this option exists.

   I would like to hear from you by Friday, November 28 to confirm that steps have been taken to ensure that in-kind asset transfers between RRIFs and other accounts are possible at no cost to the client and that RRIF clients will be made aware of this option.

   Thank you for your cooperation.
   Sincerely,
   James M. Flaherty”

   As pointed out in the Minister’s letter, the transfer “in-kind” of RRIF assets does not require the sale of assets. However, the amount transferred becomes taxable income at the time it is transferred. If the RRIF owner is able to pay the tax on the “in-kind” transfer without selling a portion of the transferred asset, then the financial impact of the RRIF withdrawal is reduced as per the Minister’s logic. On the other hand, if the RRIF owner must sell RRIF assets to generate funds in order to pay the income taxes on the RRIF withdrawal, then the advantage of the “in-kind” transfer is reduced.

   The above issues aside, those RRIF owners who do not require as income the funds realized from legally-required RRIF withdrawals can consider the opportunity to register up to $5,000 of the transferred amount into a Tax-Free Savings Account (TFSA). Remember that all investment earnings on TFSAs are income tax exempted.

   Additional explanations on TFSAs can be found at: http://www.ottawabusinessjournal.com/293169469717333.php

   For more information on RRIFs, one may wish to access the following link: http://www.fin.gc.ca/activty/faq2e.html

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