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Closing orphan RSP at TD
May 10, 2024
9:48 am
Rail Baron
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Many years ago, I moved my RSP funds in a TD (bank, not Direct Investment) RSP account to a money manager's investment fund. But there was a residual interest payment that arrived after the transfer, and $1.86 has been sitting in a TD RSP for a couple of decades since then.

The other day, I spoke with the branch manager about this, and he said there was nothing he could do to waive the $75 fee that would be charged to transfer out these funds. His advice was to let sleeping dogs lie.

I wonder if anyone else has found a way to close out orphan RSPs like this without incurring fees greater than the amounts involved?

I'm thinking that converting the $1.86 into an RIF and then withdrawing it might be the solution. It seems like a waste of time and effort for such a pittance. But I'm not keen to pay $75 to TD just to get this account closed.

May 10, 2024
9:54 am
AltaRed
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I suppose you could convert to a RRIF and withdraw the full amount but you need to be sure there will not be a RRIF closeout fee (to take it off the books).

Personally, I would most likely let sleeping dogs lie and let it languish into the 22nd century in their cyberspace. It is possible that some enlightened person at TD will find this on their own within the next 20 years and initiate a zero cost closure on its own.

May 10, 2024
10:00 am
Rail Baron
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Thanks for the quick reply, AltaRed.

Won't I have to convert this pittance to a RIF at 71, which is still a few years off, but likely less than the time it will take that enlightened person at TD to close this orphan account at zero cost?

May 10, 2024
11:16 am
AltaRed
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Rail Baron said
Thanks for the quick reply, AltaRed.

Won't I have to convert this pittance to a RIF at 71, which is still a few years off, but likely less than the time it will take that enlightened person at TD to close this orphan account at zero cost?  

Good point. You have even more reason to still ignore it. The computer will flag it when it doesn't get converted to RRIF in the proper year and TD will initiate something with you to not run afoul of the regulator. You are in the driver's seat to wait them out.

I would bring out the popcorn at that time and watch TD struggle with this.

May 10, 2024
12:43 pm
Alexandre
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You can convert RRSP to RRIF before 71. Do that for TD RRSP, withdraw $1.85 and let $0.01 sit in their RRIF till eternity.

May 10, 2024
2:24 pm
Norman1
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A $75 RSP transfer fee and $50 RSP withdrawal fee are in TD Canada Trust's Account Related Information and Administration Fees.

I don't see any RIF service fees there. Perhaps, tranferring the RSP to an TD Canada Trust RIF and withdrawing from the RIF is the way the tidy up that $1.86 RSP!

May 10, 2024
9:09 pm
RetirEd
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I wonder if TD will have the cojones to demand a dormant account fee if the cash is left in there?

I'm surprised to see a massive RRSP withdrawal fee... most outfits have a transfer-out fee but not an RRSP withdrawal fee! The RRIF exit may be the only way out.

RetirEd

May 11, 2024
2:11 am
Loonie
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Leaving the silly thing languishing will likely extend the problem so that your executor will have to deal with it. It's still on the books so it's likely CRA will know about it and it will have to be tidied up.

Moving it to RIF sounds like a good idea to me. Perhaps that process will alert TD to the need for them to do something more sensible as banks love to complain about all the paper work involved. They can cancel that fee if they want to. TDDI cancelled a fee for us after we complained that it had taken them about 3 months to do a very simple RSP transfer. I realize you're not dealing with TDDI, but it illustrates that they can do it if they want to. Your manager just doesn't want to be bothered and wants you to keep the problem off his/her desk. Remind them that you already paid the transfer fee once (if you did).

A key question is whether you have other funds at this bank. If not, there is nothing for them to take that $75 from, just the $1.86

I doubt they are going to pursue you for that money if you don't have it deposited with them. Their computer probably takes it from the RSP/RIF account automatically and probably isn't even programmed to take it from elsewhere.

I "owe" Tangerine some small amount for some silly fee, but they've never done anything about it as I don't have any money there. They took the dollar or two that was there, and that was the end of it. Spouse continues to deal with them, and I am on joint account in spouse's name.

I'd push them a bit, by telling them you want to convert it; then they will have all the extra bother of sending you a few cents a year and issuing a T slip annually. At some point somebody should be open to shutting down that process at no cost. IN my experience, branch managers are here today and gone tomorrow (I've never dealt with the same one twice), so you can try again later.
It's high time these banks figured out how to include the interest-to-date when they do transfers anyway. They created this problem.

I closed an RSP or RIF (can't remember which now at Tangerine once, in December. I specifically asked them t include the interest to date, but they didn't. In January I then had about 7 dollars still in the account,so the whole thing dragged into the next year. But at that time there was no charge for closing the account.
If it were me, I'd convert it and then close it. I wouldn't mention the fee, and I think all that would happen is that they would take the remaining funds in that account. I can't prove that, but it's what I would do. If they do figure out how to take it from another account, THEN I'd go argue with the manager and ask for reimbursement because the fee is absurd and he wants to keep your remaining business. Reimbursement as a goodwill gesture may be easier for him to do than cancel the fee which is built-in.

May 11, 2024
7:13 am
AltaRed
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That is really doing the same thing as suggested in post #4. TD will have to do something with the RRSP in the year when the OP has turned 71. Why not let TD struggle with that on their own?

What TD will likely do at that point is to collapse the RRSP and pay out the balance.

May 11, 2024
9:11 pm
Loonie
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From what I've seen and heard, the default position on RSPs at the end of the year you turn 71 is to convert to RIF, not to close it all down. I say this because I've had to argue with some of them about when exactly this conversion is to take place and when the mandatory payouts will be taken. They didn't want to take instruction from me and said it will happen automatically at a date determined by them.
Since there is no fee for converting, I don't think the automatic conversion would trigger TD emptying out the fund.
If I hadn't persevered with Tangerine, it was apparent they would have continued to drain my $7. RIF at a few cents a year in mandatory withdrawals. There was no suggestion that the process would be overseen by humans. The one thing that might trigger some action is if there is a minimum dollar amount required to keep the account open - but, if that is the case, it should already have been automatically closed by now.

May 12, 2024
8:17 am
Norman1
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Loonie said
From what I've seen and heard, the default position on RSPs at the end of the year you turn 71 is to convert to RIF, not to close it all down. …

That makes sense. Turning the RSP into a RIF would preserve the three options for the holder:

  1. Continue as a RIF.
  2. Be deregistered.
  3. Directly withdraw to an eligible annuity.
May 12, 2024
8:31 am
AltaRed
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For $1.86?

May 12, 2024
3:16 pm
Loonie
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The amount is irrelevant. I'm just saying that if you do nothing, it's an automatic default process.
For larger amounts, those options Norman mentioned matter.

May 12, 2024
5:21 pm
AltaRed
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Loonie said
The amount is irrelevant. I'm just saying that if you do nothing, it's an automatic default process.
For larger amounts, those options Norman mentioned matter.  

I forgot to add the smiley.... And yes, doing nothing is an automatic default process.

May 12, 2024
8:20 pm
Loonie
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Good; we're on the same page then!sf-smile

May 13, 2024
4:52 am
pwm
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When I wound down my mother's RRIF at TDDI, I'm very sure there was a closing fee of $50 which they deducted from the transfer to the non-registered account. That was almost 20 years ago but my memory of such things is quite good.
I know they don't mention a closing fee in their listing of fees, but I would be surprised if they would close a RRIF free of charge.

I think that just because there's a small residual amount in the RRIF does not mean they will not charge you to close it.

May 13, 2024
5:31 am
Alexandre
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Loonie said
The amount is irrelevant. I'm just saying that if you do nothing, it's an automatic default process.

I would not count on automatic default process to be in the best interests of a client. TD could just close RRSP account at 71, transfer funds to non-registered client account and deduct closing fee from these funds.

May 13, 2024
6:56 am
AltaRed
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Maybe, but none of us know for sure. These FIs are not completely a-holes all the time. Case in point: Some years ago my spouse had a few tiny holdings of stocks in her non-registered RBC Direct Investing brokerage account from her earlier days. They were spec stocks she had bought on some hot tip (long before I had met her sf-smile ). Each had a value of well under $10 and commission to sell each would normally be $10 each. But as part of portfolio cleanup, she sold them. RBC DI charged only the amount of the holding for commission for each of them for a net result of $0.

My take is that is what would most likely happen here. When the RRSP has to be collapsed due to age, the closing fee will be $1.86.

May 13, 2024
8:23 am
Bill
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I wouldn't really be concerned about a closing fee so I'd just let the account sit as is and see what happens (as the branch manager suggested) but if I wanted to avoid a fee alexandre's suggestion way back in post #5 is what I'd do.

The very few times TD has levied a fee on me for something I've always had success getting them to reverse it, I think due to all the business we've done with them over the years and the usual balances in my various accounts with them. I get the feeling they've got clients coded in some way, I always get treated well as soon as I've signed in with my card at the counter to identify myself. Anyone worked at a bank know if they do that, code clients in some way?

May 13, 2024
3:11 pm
Loonie
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Alexandre said

Loonie said
The amount is irrelevant. I'm just saying that if you do nothing, it's an automatic default process.

I would not count on automatic default process to be in the best interests of a client. TD could just close RRSP account at 71, transfer funds to non-registered client account and deduct closing fee from these funds.  

Perhaps they could do this legally (not sure), but I'm willing to bet they won't. They are not set up to do things this way, it's far too much trouble for insignificant reward, it alienates customers, and alienated customers complain a lot online. It is this latter point which scares them the most and will cost them far more than the fee is worth - in time and PR. They know this. They can all afford to be reasonable about the small stuff and are smart enough to (usually) do so. They have much bigger fish to catch and fry.

In addition, I learned from experience that many bank employees have discretion over small amounts. Not sure what the limit is but at least $10.

pwm said
When I wound down my mother's RRIF at TDDI, I'm very sure there was a closing fee of $50 which they deducted from the transfer to the non-registered account. That was almost 20 years ago but my memory of such things is quite good.
I know they don't mention a closing fee in their listing of fees, but I would be surprised if they would close a RRIF free of charge.

I think that just because there's a small residual amount in the RRIF does not mean they will not charge you to close it.  

The key point here is that they deducted fee from the transfer-out of RIF funds. If there are not sufficient funds for the fee in that account, there is not much to deduct from. Today, the fee would likely be 150 at TDDI. TDDI has an account minimum to avoid annual fees, which I think is 25K or so. This helps ensure that the fee will always be available; if not, they will have milked it annually anyway.

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