Friday, April 18, 2008

Imrpoved Retirement Options for British Columbians

More Retirement Choices for

Older British Columbia Workers

Amendments to the Pension Benefits Standards Act (PBSA) will give British Columbians more flexibility and choices when planning for their retirement, Finance Minister Carole Taylor announced today.

“More than a quarter of British Columbia’s population is over 55 and many do not want to retire at 65,” said Taylor. “It’s important to ensure that people have more choices when planning for their retirement, including how long they work and how they build their retirement savings. These changes provide more options.”

Individuals may now choose to begin receiving their pension at age 71, up from the previous maximum pensionable age of 69. This will give older workers the option to stay in the workforce longer if they so choose while they continue to build their retirement savings. The increase in the maximum pensionable age will apply to pension plans registered under British Columbia’s PBSA and will be retroactive for the 2007 calendar year. It will also apply to RRSP and life income funds that consist of funds transferred from B.C. registered pension plans.

In addition, amendments will allow B.C. registered pension plans to provide phased retirement benefits. Individuals aged 60 or over, or 55 and over and eligible for an unreduced pension, will be able to work and contribute to their pension plan while simultaneously collecting a portion of their pension benefits. Currently, older workers must choose between collecting a pension or contributing to their pension plan.

The Pension Benefits Standards Act helps protect the interests of pension plan members by setting minimum standards for pension plans registered in British Columbia. Many of the PBSA’s provisions are linked to federal income tax rules to take full advantage of preferred tax status made available to registered pension plans.

British Columbia and Alberta are currently working together on a comprehensive review of pension standards to ensure pension plans continue to benefit workers, employers and investors. The Joint Expert Panel is scheduled to present its final report to both governments in September 2008.


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