Wednesday, December 03, 2008

British Columbia Exempts RRSPs From Seizure by Creditors

On November 27, 2008, the British Columbia Legislative Assembly passed legislation exempting Registered Retirement Savings Plans (RRSPs), Registered Retirement Income Plans (RRIFs), and Deferred Profit Sharing Plans (DPSPs) from seizure by a planholder's creditors. The legislation has also been given Royal Assent.

Section 13 of Bill 45, the Economic Incentive and Stabilization Statutes Amendment Act, 2008, amends the Court Order Enforcement Act by adding section 71(3), which sets out the new exemptions.

There are some circumstances in which the funds will not be exempt. Specifically, the exemption does not apply to:

(a) to property contributed to a registered plan after or within 12 months before the date on which the debt being enforced came due,
(b) to property that has been or is being paid out of a registered plan,
(c) to an enforcement process that is being effected in support of the enforcement of a maintenance order as defined in the Family Maintenance Enforcement Act, or
(d) to an enforcement process initiated against a registered plan before
November 1, 2008.
But, a transfer of funds by a planholder from one plan to another, or on the death of the planholder to his or her spouse or common law spouse under the terms of the plan, will remain exempt.

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