The Financial Institutions Commission of British Columbia is alerting members of the public to unscrupulous pitches promising immediate access to locked-in pension funds.
Unlocking scams often target people who are in financial distress and are hoping to get immediate access to their locked-in pension funds to meet their current financial needs. They may also be targeted at people trying to use locked-in pension funds for investment purposes.
Falling victim to one of these scams could have serious financial implications. It could result in the total loss of your pension funds and the reassessment of your tax return by the Canada Revenue Agency ending in significant financial penalties.
Some common characteristics of pension-unlocking scams, although the actual delivery may vary, these scams share several common characteristics, including:
• In order to conceal the eventual unlocking transaction, you may be asked to transfer your fund to a self-directed RRSP.
• Promising immediate access to your pension funds.
• Promising that you may access your locked-in funds without paying taxes.
• Claiming that you can receive a loan equal to the value of your locked-in funds without collateral or other considerations.
In B.C., there are only four exceptions to the locking-in requirement. These exceptions are:
• You have a very small pension.
• You have reached a
• You are facing an illness that will shorten your life expectancy.
• You are permanently leaving the country.
For more information speak with the financial institution.