BMO Financial Group

BMO Financial Group

June 10, 2010 09:19 ET

BMO Retirement Institute Urges Finance Ministers to Consider Changes to Enhance Retirement Income Security

- Federal, provincial and territorial ministers meeting June 13-14 in Prince Edward Island

- BMO calls for raising or eliminating of RRSP age limit; allowance of tax-free transfers from RRSPs and RRIFs to "Registered Medical Savings Plans" and/or Registered Education Savings Plans

TORONTO, ONTARIO--(Marketwire - June 10, 2010) - The BMO Retirement Institute (TSX:BMO)(NYSE:BMO) today called on federal, provincial, and territorial finance ministers to consider changes to enhance the retirement income security of Canadians.

"The BMO Retirement Institute believes that Canadians do not have enough flexibility to take control of their retirement savings," said Tina Di Vito, Head, BMO Retirement Institute, BMO Financial Group. Citing two reports by BMO Capital Markets Economics, Ms. Di Vito voiced her support for the raising or elimination of the Registered Retirement Savings Plan (RRSP) age limit. "With an aging population and longer life expectancy, raising the RRSP age limit makes sense," she said.

Douglas Porter, Deputy Chief Economist, BMO Capital Markets, noted the main sticking point for boosting the RRSP limit has typically been concerns of the total fiscal impact of such a change. "We feel there is reason to believe that, despite modest short-term costs, such changes could be revenue neutral in the long run," noted Mr. Porter.

Ms. Di Vito also encouraged policy-makers to consider innovative changes akin to the recent changes to permit tax-free rollovers from an RRSP or a Registered Retirement Income Fund (RRIF) to a Registered Disability Savings Plan (RDSP), announced by Minister Flaherty in the budget. Again, referencing research by BMO Capital Markets Economics, she encouraged the ministers to consider the creation of a "Registered Medical Savings Plan (RMSP)" for long-term healthcare, and tax-free transfers to such a plan and/or the Registered Education Savings Plan (RESP).

Mr. Porter added, "With healthcare and education costs both outpacing consumer price increases, tax-free transfers from an RRSP or RRIF to an "RMSP" or RESP would help contain public sector outlays for these growing costs."

While waiting on changes to the current Canadian pension regime, Ms. Di Vito offered the following tips Canadians can implement now to help ensure retirement planning success:

  • Maximize your contributions – Ensure your RRSP investments are as good as a pension plan by making the largest contribution possible each and every year. Currently, RRSP contribution limits are based on 18 per cent of your earned income from the previous calendar year, up to a stated maximum ($22,000 in 2010).
  • Invest according to your life stage – Take into account your timeline when building a retirement investment strategy. In other words, know what type of investor you should be. Resources such as BMO's Investor Profile website ( can help Canadians determine this and provide investment advice and insight.
  • Know your options – Knowing which investment vehicle will help to achieve your ideal retirement lifestyle means determining both short- and long-term financial goals. RRSPs are not the only option for retirement saving. For example, Tax-Free Savings Accounts (TFSAs) provide an opportunity to save and invest tax free. Ms. Di Vito advises Canadians to speak to a financial advisor about which options best align with their individual circumstances and goals.

The complete reports from BMO Capital Markets Economics can be found at

About the BMO Retirement Institute

The BMO Retirement Institute was established in 2008 to provide thought-provoking insight and financial strategies for individuals planning for, or currently in, their retirement years. Tina Di Vito, Director, Retirement Strategies, leads the BMO Retirement Institute. Tina is a Chartered Accountant, Certified Financial Planner and Trust and Estate Practitioner. Visit the BMO Retirement Institute at

About BMO Financial Group

Established in 1817 as Bank of Montreal, BMO Financial Group is a highly-diversified North American financial services organization. With total assets of $390 billion as at April 30, 2010, and more than 37,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.

Contact Information

  • For more information on the BMO Retirement Institute,
    or to arrange for an interview, please contact:
    Nini Krishnappa, Toronto
    Sarah Bensadoun, Montreal