New Ontario pension windup flexibility is great but must include ‘self-administration’ option

It is wonderful to read that Ontario Finance Minister Duncan decided to broaden the available options upon pension wind-up, rather than forcing pensioners into an annuity.

The Nortel pensioner group NRPC’s announcement in the context of the so called Financial Sponsorship Model-FSM (ominously) neither excludes a self administered option, nor does it explicitly mention it.

Without a self-administered option, similar to what’s available today for RRSPs/TFSAs, the new windup flexibility offers no real options if they just drive pensioners into the waiting arms of the same high cost insurance (or mutual fund) companies which would have otherwise provided the annuities. And when I hear guarantees, then cost structures of GMWB-like insurance company products come to mind, which typically have even worse outcomes than annuities (e.g. GMWB II).