Pension funds frozen: London man left with no access to his own money
LONDON, ONT. -- A London man found out the hard way he wasn’t able to use any of his pension money after recently taking a buyout package from a financial institution he worked at for 16 years.
Blair Wetzel left his IT position late last year, but when he tried to access his funds, he was shocked to learn they had been frozen.
“I just don’t know how it’s legally or morally right to do this when it’s my money that I paid in to.”
The 50-year-old says it was supposed to serve as an emergency fund while in transition to his next job. He was also hoping use the money for investments.
“I’m losing the buying power and the ability to put it into markets or bonds or whatever I choose to do, when everything’s down low now, and they’re not going to make a decision until the markets stabilize apparently. I’m going to lose all that buying power opportunity in that.”
Late last month the Office of the Superintendent of Financial Institutions froze all federally-regulated pension plans. This was in response to the low interest rates brought on by the COVID-19 pandemic.
Investment advisor Tom McInerney of Worldsource Securities said this was done to make sure there is enough capital left when markets return to normal.
“If there’s transfers going on or annuities being purchased, they’re a little bit out of whack with what will likely be the case, we hope, in six to eight months from now. So all they’re trying to make sure of is that assets aren’t taken out of the pension plan now based on current interest rates, which would be unfair to the overall pension plan.”
McInerney added that if someone needs access to some pension cash in the short term they could qualify under special circumstances.