On August 31, OMERS Sponsors Corporation (SC) approved a change to the Additional Voluntary Contributions (AVC) program that allows members to keep non-locked-in funds in their AVC account after the year they turn age 71. With this new part of the program, which is called the "AVC Income Option", members can keep their AVC account for their lifetime.
The AVC Income Option brings three important changes to an AVC account:
- Members are no longer required to transfer non-locked-in funds out of their AVC account by the end of the year in which they turn age 71. Any non-locked-in funds that a member has in an AVC account on December 31st of the year they turn age 71 will remain in their AVC account, and their participation in OMERS AVCs will continue.
- The member must withdraw a minimum amount each year starting with the year they turn age 72. This withdrawal, which we call the "income amount," is required under the Income Tax Act and must be paid in cash.
- Optional withdrawals during the withdrawal window must be made in cash after the year the member turns age 71. Fund transfers to another savings arrangement are no longer available.
Aside from these changes, the same features of OMERS AVCs continue to apply, such as the application of the OMERS Fund rate of return and the ability to make optional withdrawals during the withdrawal window.
The AVC Income Option was introduced in response to member requests made through the SC’s annual process for Plan changes.OMERS will send personalized information about the AVC Income Option to members who currently have non-locked-in funds in their AVC account and who turn age 71 in 2016.