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New Product?!?
December 8, 2020
8:24 am
dougjp
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hwyc said
Really not sure I should post here.
... I think the topic is proper but there is already so many off topic entries.
Nevertheless ...

Dormant Accounts were mentioned in both registered accounts agreements

    EQ Bank RSP Savings Account Agreement
    EQ Bank TFSA Savings Account Agreement

An account will be considered dormant if there has been no activity for a 24-month period. Accounts that are dormant for 10 years will be closed and the balance transferred to the Bank of Canada.

 

Here is the full Agreement detail, which has a substantially different outcome than the 2 sentences above.

" Your Account will be considered dormant if there has been no activity in your Account for a 24-month period. Activity is defined as (i) a financial transaction initiated by you, including but not limited to, deposits, withdrawals and EFTs, or (ii) a sign in to Online or Mobile Banking.

If your Account is dormant and has no balance it will be closed without notice to you.

If your Account is dormant and the balance is greater than $0, you will receive a Dormant Account Notice. These notices will be sent to your address registered to your profile after the first two year, five year, and nine year periods of inactivity.

Accounts that are dormant for 10 years and the balance unclaimed will be closed and the balance transferred to the Bank of Canada who will act as the custodian on behalf of the funds owner. Balances are transferred to the Bank of Canada once a year, on December 31st. To claim an account balance transferred to the Bank of Canada, you must file a claim with the Bank of Canada. The notice after the nine year period of inactivity will include information on how to reclaim funds. Interest will be paid until the Account is closed. "

In other words, its only a nil balance account where the account will be closed after 2 years. This would only happen if a TFSA account transfer out was initiated, because if its a withdrawal made by the owner (to go somewhere else in the following year), they would leave = or > $ 0.01 in the account in anticipation of possible future use.

If $ 0.01 was left in the account, EQ would leave the account open and send notices up to 12 years after the account wasn't used any more, then close it to the BofC. This is standard practice and (I think) follows rules set out by the BofC.

In contrast, it DOES bother me immensely seeing posts by people dealing with other banks where the account was closed way faster, i certainly wouldn't deal with those banks.

" We may never pass this way again " - Seals & Crofts

December 8, 2020
9:12 am
hwyc
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Activity is defined as ... a sign in to Online or Mobile Banking.

OK I missed that sf-embarassed

December 8, 2020
9:20 am
lhsaid
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hwyc said
Activity is defined as ... a sign in to Online or Mobile Banking.

OK I missed that sf-embarassed  

I think it's fund movement

December 8, 2020
8:54 pm
Loonie
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Just wondering... if an RSP account goes dormant and is transferred to the Bank of Canada, does that mean it is de-registered? or does Bank of Canada act as a custodian for registered plans? If de-registered, whopping tax would possibly be due and the person might not even know - worst case scenario.

December 9, 2020
7:16 am
hwyc
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It's getting interesting here.

Registered Retirement Savings Plan (RRSP) is found among "types of unclaimed balances" not held by the Bank of Canada on this BoC page

I wonder now how EQ mean in their RSP Savings Account Agreement ? sf-confused

December 9, 2020
11:20 pm
Loonie
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It sounds to me like the RRSP would be de-registered.
The EQ page says "Accounts that are dormant for 10 years and the balance unclaimed will be closed and the balance transferred to the Bank of Canada who will act as the custodian on behalf of the funds owner." (emphasis mine)

"Closed" has to mean that the RRSP no longer exists, right? So that may allow it to be transferred to BoC as non-registered.
It may then just sit there until the owner or executor claims it. At that point, the paper work required to release it may include a provision that taxes owing would be deducted (but how would they know?) or required to be reported and paid by the recipient or estate, perhaps in advance of receipt.
Perhaps, when the account is "closed", this triggers something at CRA which then reassesses the tax return and claws the tax out of the Bank of Canada. After a long time, I think it's 100 years but not sure, the balance all goes to the government anyway, but inflation will have eaten it into a skeleton of its former self.
I have never seen the documents required. I'm just guessing.
Could be an interesting conundrum for anyone affected. I would imagine there are abandoned RRSPs out there. Someone may have had a good year or a spurt of enthusiasm about retirement planning and made an nth hour contribution and then not done so again for some time - or ever - and forgotten about it or even forgotten where they took out the plan. Things get lost.

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