COVID-19: Unlocking Retirement Savings Plans

April 21 2020

In these unprecedented times, the economic impact of COVID-19 pandemic can be felt across the globe. With business shutdowns, and large amounts of layoffs, we are concerned that individuals may be facing extremely high levels of financial stress and anxiety.

While the federal government has put into place a myriad of support initiatives for both businesses and individuals, we believe there may be additional unexplored options to ease the financial hardships caused by COVID-19.

With our expertise and experience in supporting employer-sponsored pension plans, including Defined Contribution Pension Plans (DCPPs) as well as Group Registered Retirement Saving Plans (RRSPs), we have proposed a recommendation to the Department of Finance and the Prime Minister’s Office to allow Canadians to withdraw from various retirement savings plans on a penalty free basis. This, in addition to the Canadian Emergency Response Benefit (CERB), would provide Canadians with financial support and flexibility, while not creating a greater financial burden on the federal government. Our proposal includes specific vehicles eligible for the unlocking, specified repayment timelines, and capped withdrawal limits. Further, we have suggested eligibility requirements for this one-time unlocking to be similar, if not identical, to that of the CERB.

A copy of our proposal is linked here – we welcome your comments and suggestions!