The following News Release or Speech has just been posted on the Finance Canada Site.
Ottawa, November 20, 2008
The Minister of Finance today sent the following open letter to federally regulated financial institutions regarding minimum withdrawal requirements for Registered Retirement Income Funds.
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.
James M. Flaherty
For further information, media may contact:
Office of the Minister of Finance
Department of Finance
SOURCE: Dept of Finance – Newsroom
Related Document: Frequently Asked Questions on Registered Retirement Income Funds