Registered Plan (Retirement Income) Exemption Act and Commentary (1999)

1999 Winnipeg, MB

Uniform Bill and Commentary - Creditor Access to Future Income Security Plans

The Uniform Registered Plan (Retirement Income) Exemption Act

Short title
1 This Act may be cited as The Uniform Registered Plan (Retirement Income) Exemption Act.

2 In this Act:

"DPSP" means a deferred profit sharing plan as defined in section 147 of the federal Act;

"enforcement process" means attachment, garnishment, execution, seizure or other legal process for the enforcement of a debt;

"federal Act" means the Income Tax Act (Canada);

"planholder" means:

(a) with respect to a DPSP, a beneficiary within the meaning of section 147 of the federal Act;

(b) with respect to an RRIF, an annuitant as defined in section 146.3 of the federal Act; and

(c) with respect to an RRSP, an annuitant as defined in section 146 of the federal Act;

"registered plan" means a DPSP, an RRIF or an RRSP.

"RRIF" means a registered retirement income fund as defined in section 146.3 of the federal Act;

"RRSP" means a registered retirement savings plan as defined in section 146 of the federal Act.

Commentary: Section 2 contains the definitions for the Act. The Income Tax Act (Canada) is used as the key for the various definitions to ensure ongoing consistency with that legislation. Some jurisdictions may need to add "as amended from time to time"to the definition "federal Act" if this is not covered by their Interpretation Act.

Exemption from enforcement processes
3 Notwithstanding any other Act or regulation, all rights, property and interest of a planholder in a registered plan are exempt from any enforcement process.

Commentary: Section 3 provides the central legal statement of this Act setting out that the contents of a "planholder's" "registered plan" are exempt from any legal process. This wording is absolute in its scope and subject only to the express exceptions set out within the Act itself. To the extent that individual jurisdictions wish to create further exceptions to this exemption, such as allowing exigibility to enforce maintenance orders, such exceptions would need to be added to this draft.

Payments out of registered plans
4(1) Subject to section 5 but notwithstanding any other Act or regulation, a payment out of a registered plan to a planholder or the legal representative of a planholder is not exempt from any enforcement process.

(2) For the purposes of subsection (1), a transfer of property held in one registered plan to another registered plan does not constitute a payment out of a registered plan.

Commentary: Subsection 4(1) sets out that while the contents of the registered plan are exempt, individual withdrawals or payments out of such a plan are not exempt subject to the provisions in section 5. Subsection 4(2) is intended to clarify that a simple transfer from one registered plan to another does not constitute a "payment out" which would expose such transferred funds to enforcement proceedings. It should be noted that the extension of protection in subsection (2) is limited only to other "registered plans" and does not include other tax deferral instruments such as education or home purchase plans. This is intended to reflect the overall policy direction that this exemption from exigibility be targeted solely for retirement funds and not for other tax deferral or lifestyle choices.

Enforcement against payments out
5 For the purposes of enforcing a creditor's rights against payments out of a registered plan to a debtor planholder:

(a) the amount of a payment out of the registered plan is deemed to be a debt due or accruing due to the person for or with respect to the person's wages or salary within the meaning of [The Attachment of Debts Act]; and

(b) the exemptions set out in [section 22 of that Act] apply, with any necessary modification.**

Commentary: Section 5 is intended to provide a link to existing enforcement procedures in the implementing jurisdiction. Clause (a) deems a payment out of a registered plan to be subject to garnishment proceedings under the appropriate provincial legislation (in Saskatchewan for example, the appropriate reference is to The Attachment of Debts Act).

Clause (b) creates limits on such proceedings by expressly providing that the provincial limits on the amount which can be garnisheed in a given situation should also apply in this situation (again for example, see section 22 of The Attachment of Debts Act). Thus while section 4 provides that these payments are individually exigible, and clause 5(a) allows the payments to be accessed by garnishment proceedings, clause 5(b) is intended to ensure that subsistence levels are maintained for the planholder and that only the amount in excess of such provincial limits are exigible. This is viewed as consistent with the overall policy goal of ensuring adequate retirement funds for a plan holder but not protecting funds from legitimate creditors with respect to the portion of those funds that are in excess of this policy goal.

Coming into force
6 This Act comes into force on proclamation.

Commentary: Section 6 provides that the Act comes into force on proclamation. It could also provide for [or on a specified future date] . The preference would of course be to have a uniform proclamation date across Canada in order to best reflect a new national approach to this issue. Consultations reflect that a period of approximately one year prior between passage of the Bill and proclamation would be sufficient time to allow affected parties to adjust to the proposed new regime.

** The "square-bracketed" provisions refer to The Attachment of Debts Act in the Province of Saskatchewan for illustration purposes. Each jurisdiction will, of course, refer to the appropriate equivalent legislation in their jurisdiction.

Section 22 of that Act provides as follows:


Exemption from attachment
22(1) Subject to the other provisions of this section, no debt due or accruing due to an employee, for

or in respect of wages or salary, is liable to attachment unless the debt exceeds the sum mentioned in subsection (2), and then only to the extent of the excess.

(2) The amount of an employee's wages or salary exempt from attachment in any month is $500 plus $100 for each of his dependants that he supports.

(3) For the purpose of subsection (2), "dependant" means:

(a) a wife, husband, brother, sister, parent or grandparent; or

(b) a person under the age of sixteen years; or

(c) a person being sixteen years of age or more who:

(i) is in regular attendance at a school; or

(ii) by reason of mental or physical disability is unable to earn a livelihood.

(4) An employer who has been served with a garnishee summons to attach wages due or accruing due to his employee may retain the amount of the wages of the employee that is exempt from attachment and pay that amount to the employee.

(5) If the plaintiff or judgment creditor claims that an employee, in addition to a fixed money wage or salary is given board or lodging or the use of a house, or any other thing of value, in part payment or compensation for his services, the plaintiff or judgment creditor may apply, on not less than five days' notice, to the judge for an order appraising the money value of the board or lodging, use of house or other thing, and the value thus ascertained shall be deducted from the amount of the exemption to which the defendant or judgment debtor would otherwise be entitled.

(6) In case of an attachment of wages or salary, the defendant or judgment debtor or plaintiff or judgment creditor may without awaiting the regular sittings of the court, apply to a judge, upon at least five days' notice in writing to the other party or his solicitor, for an order fixing the amount of exemption and finally disposing of the matter, and the judge may order accordingly.

(7) Where the debt due or accruing due is wages or salary for a period of less than one month, the part thereof exempt from attachment is that sum that bears the same proportion to the amount of the

exemption allowed by subsections (2) and (5) as the period for which the wages or salary is due or accruing due bears to one month of four weeks.

(8) Nothing in this section applies to a garnishee summons issued under:

(a) Repealed. 1984-85-86, c.77, s.2.

(b) a judgment or order respecting:

(i) an action founded upon a separation agreement;

(ii) a debt contracted for board or lodging; or

(iii) hospital expenses payable to a hospital or recoverable by a municipality or by the Minister of Municipal Affairs under The Local Improvement Districts Act or The Local Improvement Districts Relief Act.

(9) If the amount of the exemption to which the defendant or judgment debtor is entitled, or a portion thereof, is paid into court, it is not necessary for him to claim the amount or the portion, but he is entitled, in the absence of notice of an application under subsection (5) or subsection (6), to have it paid out to him at any time on application to the local registrar accompanied by an affidavit showing such facts as so entitle him.

(10) Where a defendant or a judgment debtor does not make an application under subsection (9) for payment out to him of the amount to which he is entitled and that has been paid into court, prior to the expiration of two months after the date:

(a) the amount is paid into court;

(b) judgment is recovered against the debtor;

whichever date is the later, the judgment creditor may, either ex parte or on such notice as the court or judge directs, apply to the court or a judge to have the amount, or so much of the amount as is sufficient to satisfy his judgment, paid out to him, and where an application is made the court or judge may make such order as is deemed advisable in the circumstances.

Historical Note: R.S.S. 1965, c.101, s.22; 1966, c.93, s.4; 1973, c.5, s.1; 1979, c.4, s.3; 1979-80, c.2, s.4; 1984-85-86, c.77, s.2.

Appendix "A"

A Consultations

Pursuant to the direction of the Uniform Law Conference of Canada (ULCC), the Working Group continued the consultation process with those organizations that had responded to the previous rounds of consultation (List One). Copies of the Draft Bill were again sent to certain other groups that had not previously responded but that were viewed as likely to have an interest in the issue (List Two).

List One

Mr. R. Alan Young
Vice-President, Policy
Box 348
30th Floor, Commerce Court West
TORONTO, Ontario
M5L 1G2

Mr. D. W. Mann
Canadian Bar Association
Milner Fenerty
3oth Floor, Fifth Avenue Place
237 - 4th Avenue S.W.
CALGARY, Alberta
T2P 4X7

Mr. Jeffrey R. Hunt
Canadian Bar Association
Patterson Palmer Hunt Murphy
10 Church Street
P.O. Box 1068
TRURO, Nova Scotia
B2N 5B9

Mr. F. Redgrave
Canadian Bar Association
Flynn Merrick
Halifax Office
Suite 2100, 1801 Mollist Street
P.O. Box 1054
HALIFAX, Nova Scotia
B3J 2X6

Mr. Robert O. Sanderson, FCA, CIP
Canadian Insolvency Practitioners Association
277 Wellington St. W
TORONTO, Ontario
M5V 3H2

Ms. Margaret Crowle
Consumers' Association of Canada, Saskatchewan
A5B - 116 - 103rd Street East
SASKATOON, Saskatchewan
S7N 1Y7

Mr. Bruce Copeland, FCI
Credit Institute of Canada
Edmonton Chapter
P.O. Box 58014
Inglewood R.P.O.
T5L 4Z4

Ms. Susan Murray
Director of Government Affairs
Credit Union Central of Canada
Suite 400
275 Bank Street
OTTAWA, Ontario
K2P 2L6

Ms. Penny-Lynn M. Rintoul
Tanner & Guiney
Barristers and Solicitors
2810 Matheson Boulevard East
Suite 530
LW4 4X7

Mr. Sid Bildfell, CEO
Credit Union Central of Saskatchewan
P.O. Box 3030
REGINA, Saskatchewan
S4P 3G8

Mr. J-P Bernier
Vice-President and General Counsel
Canadian Life and Health Insurance Association Inc.
Suite 1700
1 Queen Street East
TORONTO, Ontario
M5C 2X9

Mr. Edward A.J. Rothberg, LL.B
Associate General Counsel
Canadian Association of Insurance and Financial Advisors
41 Lesmill Road
M3B 2T3

Mr. Kelly C.M. Bernakevitch, CA
The Institute of Chartered Accountants of Saskatchewan
830 - 1801 Hamilton Street
REGINA, Saskatchewan
S4P 4B8

Ms. Patricia L. Paton
Policy Analyst
Government and Public Affairs
Credit Union Central of Saskatchewan
2055 Albert Street
P. O. Box 3030
REGINA, Saskatchewan
S4P 3G8

Ms. Nola D. Joorisity, C.A., C.M.A.
Executive Director
The Institute of Chartered Accountants
of Saskatchewan
830 - 1801 Hamilton Street
REGINA, Saskatchewan
S4P 4B8

Lysanne M. Gauvin
Director General
Revenue Collections Directorate
Revenue Canada
Room 6004, 400 Cumberland Street
OTTAWA, Ontario
K1A 0L8

Ms. L. Carol Johnson
Policy and Technical Services
Revenue Canada
Room 6004, 400 Cumberland Street
OTTAWA, Ontario
K1A 0L8

List Two

Ms. Tamra L. Thomson, Director
Legislation and Law Reform
Canadian Bar Association
50 O'Connor Street
Suite 902
OTTAWA, Ontario
K1A 6L2

Mr. Terry Evenson, Executive Director
Canadian Bar Association
Alberta Branch
Suite 1830
540 - 5th Avenue S.W.
CALGARY, Alberta
T2P 0M2

Mr. Barry Cavanaugh, Executive Director
Canadian Bar Association
British Columbia Branch
10th Floor
845 Cambie Street
VANCOUVER, British Columbia
V6B 5T3

Ms. Pamela Wylie, Executive Director
Canadian Bar Association
Manitoba Branch
219 Kennedy Street
WINNIPEG, Manitoba
R3C 1S8

Canadian Bar Association
New Brunswick Branch
Suite 206
1133 Regent Street
FREDERICTON, New Brunswick
E3B 3Z2

Ms. Patricia Pope, Executive Assistant
Canadian Bar Association
Newfoundland Branch
P.O. Box 1028
ST. JOHN'S, Newfoundland
A1C 5M3

Ms. Alison Davidson, Executive Director
Canadian Bar Association
Nova Scotia Branch
Suite 526
1657 Barrington Street
HALIFAX, Nova Scotia
B3J 2A1

Ms. Brenda Hesje, Executive Director
Canadian Bar Association
Saskatchewan Branch
411, 105 - 21st Street East
SASKATOON, Saskatchewan
S7K 0B3

Ms. Linda Adlam Manning, Executive Director
Canadian Bar Association
Ontario Branch
Suite 200
20 Toronto Street
TORONTO, Ontario - M5C 2B8

Canadian Bar Association
Prince Edward Island Branch
49 Water Street
C1A 7K2

Ms. Jan Graham, Executive Secretary
Canadian Bar Association
Yukon Branch
c/o Law Society of Yukon
Suite 201
302 Steele Street
WHITEHORSE, Yukon Territory
Y1A 2C5

Insolvency Institute of Canada
c/o Mr. Paul Goodman
Peat Marwick Thorne
Suite 1505
1959 Upper Water Street
Purdy's Wharf, Tower 1
HALIFAX, Nova Scotia
B3J 3N2

Mr. David Cohen, President
Consumers' Association of Canada (National)
Suite 307
267 O'Connor Street
OTTAWA, Ontario
K2P 1V3

Mr. Barry Kryba, President
Credit Association of Canada
37 Gretman Crescent
TORONTO, Ontario
L3T 5L9

Ms. Sharon Smith-Ziraldo
National Credit & Financial Executives' Forum
Ashland Chemical Canada
2620 Royal Windsor Drive
I5J 4E7

Ms. Marlene Speers
Western Forum of Credit & Financial Executives'
Credit Bureau of Vancouver Ltd.
400 Robson Street
VANCOUVER, British Columbia
V6B 2B4

Mr. Ted Azevedo, President
Nation Pensioners' and Senior Citizens' Federation
3033 Lakeshore Blvd. West
TORONTO, Ontario
M8V 1K5

Lee Gill,
Director of Corporate Law
Policy Directorate
Industry Canada

Ms. Brigitte Neumann
A/Executive Director
Nova Scotia Advisory Council on the Status of Women
P.O. Box 745
HALIFAX, Nova Scotia
B3J 2T3

Monsieur Claude Ouellette
CAC (Quebec)
Association des Consommateurs du Québec
3120 rue Masson
Bureau 101
H1Y 1X8

Monsieur Norman Laberge, Directeur exécutif
Canadian Bar Association
Québec Branch
445 boul Saint Laurent, bureau 41`0
H2Y 2Y7

Next Annual Meeting

2020 Annual Meeting

Place to be Announced

August 9 – 13, 2020