Current at: 05/JAN/2009

In late November 2008 the Finance Minister announced a proposal to provide temporary relief to Canadian seniors holding Registered Retirement Income Funds (RRIFs) that may be affected by the recent global financial market turbulence. The government proposes to reduce the required minimum withdrawal amount for RRIFs by 25 per cent for 2008.

This measure will apply to all RRIF clients regardless of age. Clients who have withdrawn more than the reduced 2008 minimum amount will be allowed to re-contribute up to 25 per cent of the 2008 minimum withdrawal amount to their plans starting January 2, 2009, until March 2, 2009 or 30 days after the proposal is enacted. Re-contributions will be deductible for the 2008 taxation year.

As a result of the above changes a great number of financial institutions will be updating their processes to support these options for mutual funds, segregated fund contracts and guaranteed interest contracts (GIC). (It should be noted many institutions may have paid out 2008 RRIF minimums in full.)

We recommend that you speak with your advisor to determine how these changes could affect your investments. Manulife will provide more detailed information to your advisor on how to administer the new options in the coming weeks.

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