New tax rules for retirement plans

"No Canadian or his family is likely to escape the effects of proposals for pension reform tabled on October 9, 1986 by Finance Minster Michael Wilson. New tax rules are proposed for Registered Retirement Savings Plans (RRSPs), company pensions, and other forms of retirement plans. Draft legislation is expected to be released in the first half of 1987.IntroductionOver two years ago on February, 15, 1984, Mark Lalonde, then Finance Minister, tabled two White Papers. The first, Action Plan for Pension Reform, proposed improvements to the public pension system and increases in the minimum pension benefits standards to be mandated by the federal government. Since then changes have been made to the Old Age Security, Guaranteed Income Supplement and Canada Pension Plan programs. Also, benefits provided under pension plans subject to the federal Pension Benefits Standards Act have been improved significantly.The companion paper, Building Better Pensions f or Canadians, proposed to standardize and, in many cases, improve retirement savings through private plans by revising the tax rule s. The tax proposals in the Notice of Ways and Means released by Finance Minister Wilson on October 9. 1986 implement, with modifications, the tax treatment of retirement savings originally proposed in the May 1985 budget in response to that second paper."