Wednesday, April 25, 2018

Manitoba Law Reform Commission Consultation Report on The Beneficiary Designation Act

The Manitoba Law Reform Commission has published a consultation paper on The Beneficiary Designation Act (Retirement, Savings and Other Plans):
"Pension plans, insurance proceeds, and other retirement savings vehicles play an important role in the savings strategies of Canadians. As individuals pay into these plans over the years, issues arise such as: what happens when the plan owner dies? Where does the money go?"

"In Manitoba, the treatment of the proceeds of these financial products upon the death of the owner is regulated by The Insurance Act, The Pension Benefits Act and The Beneficiary Designation Act (Retirement, Savings and Other Plans) (hereinafter “The Beneficiary Designation Act”). The latter provides for designation of beneficiaries to occur without the formalities required under The Wills Act."

"Recently, a gap in The Beneficiary Designation Act came to the attention of the Commission respecting beneficiary designations when plans are renewed, replaced or converted. In these situations, a new plan is created and the old plan ceases to exist. Plan beneficiary designations do not automatically roll over and a fresh beneficiary designation must be made or, upon the death of the owner of the plan, the proceeds are payable to the plan owner’s estate. A further look at the legislation and comparison with the legislation of other jurisdictions highlighted several other potential deficiencies in Manitoba’s legislative scheme."

"This Consultation Report considers possible amendments to improve the legislation and procedure related to beneficiary designations in Manitoba. Given the popularity of pension plans, registered savings plans, and other retirement savings vehicles in the marketplace today, it is important to ensure that the legislative scheme in place provides appropriate and adequate guidance to plan owners, designated beneficiaries and the legal profession. "

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posted by Michel-Adrien at 6:43 pm

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