In response to requests from members, we've introduced an option to keep non-locked-in funds in your AVC account beyond the year in which you turn age 71. We call this new part of the AVC program the "AVC Income Option."
The AVC Income Option brings three important changes to AVCs:
You are no longer required to transfer non-locked-in funds out of your AVC account by the end of the year in which you turn age 71. Any non-locked-in funds that you have in your AVC account on December 31st of the year you turn age 71 will remain in your AVC account, and your participation in OMERS AVCs will continue.
You must withdraw a minimum amount each year starting with the year you 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 you turn 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.
If you have non-locked-in funds in your AVC account on December 31st of the year you turn age 71, the funds will remain in your AVC account and your participation in OMERS AVCs will continue. With the AVC Income Option, you can keep funds in your AVC account for your lifetime, provided you withdraw at least the minimum each year.
Each year after you turn age 71, you must withdraw at least the income amount from your AVC account.
The income amount starts at around 5% of your AVC account balance at age 72, and peaks at 20% at age 95 and beyond. The age-based percentage is applied to the balance of your AVC account at the start of the year. The income amount is calculated using the formula set out in the Income Tax Act, and will be shown on your AVC Annual Statement, which is mailed to you at the end of February each year.
How the Income Amount Works
Tax will be withheld from all withdrawals beginning the year you turn age 72.
Amanda is 72 years old on January 1 and her AVC account balance is $40,000. The income amount on her AVC Annual Statement is $2,160 (5.40% of $40,000).
Jonas is 72 years old on January 1 and his AVC account balance is $8,000. The income amount on his AVC Annual Statement is $432 (5.40% of $8,000). Note: The income amount is less than the $500 minimum.
Direct deposit is fast, easy and convenient. When the income amount is paid from your AVC account or you make an optional withdrawal, your money will be deposited directly into your bank account. There's no waiting – your cheque will never be delayed or lost in the mail.
Use the AVC Income Option Direct Deposit Form to set up direct deposit.
How to Withdraw Funds (beginning the year you turn 72)
To make an optional withdrawal during the annual March 1 to April 30 withdrawal window, you will need to use the paper Form 411 - AVC Income Option Withdrawal (members age 72 and older).