Income Tax Regulations (C.R.C., c. 945)

Regulations are current to 2016-08-15 and last amended on 2016-06-22. Previous Versions

Association of Benefits with Employers

  •  (1) Where, for the purposes of this Part, it is necessary to determine the portion of an amount of benefits provided with respect to a member of a registered pension plan under a defined benefit provision of the plan that is attributable to the member’s employment with a particular employer, the following rules apply, subject to subsection 8308(7):

    • (a) the determination shall be made by the plan administrator;

    • (b) benefits provided as a consequence of services rendered by the member to an employer who participates in the plan shall be regarded as attributable to employment with that employer, whether the benefits become provided at the time the services are rendered or at a subsequent time; and

    • (c) the determination shall be made in a manner that

      • (i) is reasonable in the circumstances,

      • (ii) is not inconsistent with such determinations made previously, and

      • (iii) results in the full amount of benefits being attributed to employment with one or more employers who participate in the plan.

  • (2) Where the administrator of a registered pension plan does not comply with the requirements of subsection (1) in connection with the determination of an amount under this Part at any time,

    • (a) the plan becomes, at that time, a revocable plan; and

    • (b) the Minister shall make any determinations referred to in subsection (1) that the administrator fails to make, or fails to make in accordance with that subsection.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending regulations. SOR/92-51, s. 7.

Exemption from Certification

  •  (1) For the purposes of subsection 147.1(10) of the Act as it applies in respect of a past service event and the benefits provided under a defined benefit provision of a registered pension plan with respect to a particular member of the plan, a certification of the Minister is not required where

    • (a) each provisional PSPA of the member that is associated with the past service event is nil;

    • (b) the conditions in subsection (2) or (3) are satisfied;

    • (c) the conditions in subsection (2) or (3) are substantially satisfied and the Minister waives in writing the requirement for certification;

    • (c.1) paragraph 8303(5)(f.1) was applicable in determining the provisional PSPA of the member that is associated with the past service event; or

    • (d) the past service event is deemed by paragraph 8304(3)(b) to have occurred immediately after the end of 1990.

  • (2) The following are conditions for the purposes of paragraphs (1)(b) and (c) and 8303(5)(g):

    • (a) there are more than 9 active members under the provision;

    • (b) no more than 25 per cent of the active members under the provision are specified active members under the provision;

    • (c) for all or substantially all of the active members under the provision, the amount of lifetime retirement benefits accrued under the provision has increased as a consequence of the past service event;

    • (d) where there is a specified active member under the provision,

      • (i) the amounts C and D in subparagraph (ii) are greater than nil, and

      • (ii) the amount determined by the formula A/C does not exceed the amount determined by the formula B/D where

        A 
        is the aggregate of all amounts each of which is the amount of lifetime retirement benefits accrued under the provision, immediately after the past service event, to a specified active member under the provision,
        B 
        is the aggregate of all amounts each of which is the amount of lifetime retirement benefits accrued under the provision, immediately after the past service event, to an active member (other than a specified active member) under the provision,
        C 
        is the aggregate of all amounts each of which is the amount of lifetime retirement benefits accrued under the provision, immediately before the past service event, to a specified active member under the provision, and
        D 
        is the aggregate of all amounts each of which is the amount of lifetime retirement benefits accrued under the provision, immediately before the past service event, to an active member (other than a specified active member) under the provision; and
    • (e) the benefits provided under the provision as a consequence of the past service event to members of the plan who are not active members under the provision are not more advantageous than such benefits provided to active members under the provision.

  • (3) The following are conditions for the purposes of paragraphs (1)(b) and (c):

    • (a) the past service event consists of the establishment of the provision;

    • (b) there are more than 9 active members under the provision;

    • (c) no more than 25 per cent of the active members under the provision are specified active members under the provision;

    • (d) the member is not a specified active member under the provision;

    • (e) if the member is not an active member under the provision, for each of the 5 years immediately preceding the calendar year in which the past service event occurs,

      • (i) the member was not connected at any time in the year with an employer who participates in the plan, and

      • (ii) the aggregate of all amounts each of which is the remuneration of the member for the year from an employer who participates in the plan did not exceed 2 1/2 times the Year’s Maximum Pensionable Earnings for the year; and

    • (f) the aggregate of all amounts each of which is a provisional PSPA of the member that is associated with the past service event does not exceed 7/2 of the money purchase limit for the year in which the past service event occurs.

  • (4) For the purposes of this section as it applies in respect of a past service event,

    • (a) a member of a pension plan is an active member under a defined benefit provision of the plan if

      • (i) lifetime retirement benefits accrue under the provision to the member in respect of a period that immediately follows the time the past service event occurs, or

      • (ii) the member is entitled, immediately after the time the past service event occurs, to lifetime retirement benefits under the provision in respect of a period before that time and it is reasonable to expect, at that time, that lifetime retirement benefits will accrue under the provision to the member in respect of a period after that time; and

    • (b) an active member under a defined benefit provision of a pension plan is a specified active member under the provision if

      • (i) the member is connected, at the time of the past service event, with an employer who participates in the plan, or

      • (ii) it is reasonable to expect, at the time of the past service event, that the aggregate of all amounts each of which is the remuneration of the member for the calendar year in which the past service event occurs from an employer who participates in the plan will exceed 2 1/2 times the Year’s Maximum Pensionable Earnings for the year.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending regulations. SOR/92-51, s. 7;
  • SOR/2005-264, s. 19.

Certification in respect of Past Service Events

Application for Certification

  •  (1) Application for a certification of the Minister for the purposes of subsection 147.1(10) of the Act shall be made in prescribed form by the administrator of the registered pension plan to which the certification relates.

Prescribed Condition

  • (2) For the purposes of subsection 147.1(10) of the Act in respect of a past service event and benefits with respect to a particular member of a registered pension plan, the prescribed condition is that, at the particular time the Minister issues the certification,

    • (a) the aggregate of all amounts each of which is the member’s provisional PSPA with respect to an employer that is associated with the past service event

    does not exceed

    • (b) the amount determined by the formula

      $8,000 + A + B + C - D + R

      where

      A 
      is the member’s unused RRSP deduction room at the end of the year immediately preceding the calendar year (in this paragraph referred to as the “particular year”) that includes the particular time,
      B 
      is the amount of the member’s qualifying withdrawals made for the purposes of the certification, determined as of the particular time,
      C 
      is the amount of the member’s PSPA withdrawals for the particular year, determined as of the particular time,
      D 
      is the aggregate of all amounts each of which is the accumulated PSPA of the member for the particular year with respect to an employer, determined as of the particular time, and
      R 
      is the total of all amounts each of which is a PAR determined in connection with the individual’s termination in the particular year from a deferred profit sharing plan, or from a benefit provision of a registered pension plan, and in respect of which an information return has been filed under section 8402.01 with the Minister before the particular time.

Qualifying Withdrawals

  • (3) For the purposes of paragraph (5)(a) and the description of B in paragraph (2)(b), the amount of an individual’s qualifying withdrawals made for the purposes of a certification in respect of a past service event, determined as of a particular time, is the lesser of

    • (a) the aggregate of all amounts each of which is such portion of an amount withdrawn by the individual from a registered retirement savings plan under which the individual was the annuitant (within the meaning assigned by subsection 146(1) of the Act) at the time of the withdrawal as

      • (i) is eligible, pursuant to subsection (4), to be designated for the purposes of the certification, and

      • (ii) is designated by the individual for the purposes of the certification by filing a prescribed form containing prescribed information with the Minister before the particular time, and

    • (b) the amount, if any, by which

      • (i) the aggregate of all amounts each of which is the provisional PSPA of the individual with respect to an employer that is associated with the past service event

      exceeds

      • (ii) the amount, positive or negative, determined by the formula

        A + C - D + R

        where A, C, D and R have the same values as they have at the particular time for the purposes of the formula in paragraph (2)(b).

Eligibility of Withdrawn Amount for Designation

  • (4) An amount withdrawn by an individual from a registered retirement savings plan is eligible to be designated for the purposes of a certification, except to the extent that the following rules provide otherwise:

    • (a) the amount is not eligible to be designated if the amount was

      • (i) withdrawn from a registered retirement savings plan in a calendar year other than the year in which the designation would be filed with the Minister or either of the 2 immediately preceding calendar years, or

      • (ii) withdrawn in circumstances that entitle the individual to a deduction under paragraph 60(l) of the Act; and

    • (b) the amount is not eligible to be designated to the extent the amount was

      • (i) designated by the individual for the purposes of any other certification, or

      • (ii) deducted under section 60.2 or subsection 146(8.2) or 147.3(13.1) of the Act in computing the individual’s income for any taxation year.

PSPA Withdrawals

  • (5) For the purposes of the description of C in paragraph (2)(b) and the description of G in the definition net past service pension adjustment in subsection 146(1) of the Act, the amount of an individual’s PSPA withdrawals for a calendar year, determined as of a particular time, is

    • (a) if the Minister has issued, in the year and before the particular time, a certification for the purposes of subsection 147.1(10) of the Act with respect to the individual, the aggregate of all amounts each of which is the amount of the individual’s qualifying withdrawals made for the purposes of a certification that the Minister has issued in the year and before the particular time; and

    • (b) in any other case, nil.

Prescribed Withdrawal

  • (6) For the purposes of subsection (7) and subsections 146(8.2) and 147.3(13.1) of the Act, a prescribed withdrawal is the portion of an amount withdrawn by an individual from a registered retirement savings plan under which the individual is the annuitant (within the meaning assigned by subsection 146(1) of the Act) that is designated in accordance with subparagraph (3)(a)(ii) for the purposes of a certification in respect of the individual.

Prescribed Premium

  • (7) For the purpose of subsection 146(6.1) of the Act, a premium paid by a taxpayer under a registered retirement savings plan under which the taxpayer is the annuitant (within the meaning assigned by subsection 146(1) of the Act) at the time the premium is paid is a prescribed premium for a particular taxation year of the taxpayer where the following conditions are satisfied:

    • (a) the taxpayer withdrew an amount (in this subsection referred to as the “withdrawn amount”) in the particular year from a registered retirement savings plan for the purposes of a certification in respect of a past service event;

    • (b) all or part of the withdrawn amount is a prescribed withdrawal pursuant to subsection (6);

    • (c) it is subsequently determined that

      • (i) as a consequence of reasonable error, the taxpayer withdrew a greater amount than necessary for the purposes of the certification, or

      • (ii) as a consequence of the application of paragraph 147.1(3)(b) of the Act, it was not necessary for the taxpayer to withdraw any amount;

    • (d) the premium is paid by the taxpayer in the 12-month period immediately following the time the determination referred to in paragraph (c) is made;

    • (e) if the individual subsequently pays all or a part of the contribution to the plan pursuant to the commitment, the amount paid to the plan is, for the purposes of paragraphs 8301(4)(a) and (8)(e), a contribution described in this paragraph,

    • (f) the taxpayer files with the Minister, on or before the day on or before which the taxpayer is required (or would be required if tax under Part I of the Act were payable by the taxpayer for the taxation year in which the taxpayer pays the premium) by section 150 of the Act to file a return of income for the taxation year in which the taxpayer pays the premium, a written notice in which the taxpayer designates the premium as a recontribution of all or a portion of the withdrawn amount; and

    • (g) if an employer subsequently pays to the plan all or a part of a contribution in respect of which paragraph (f) applies, the amount paid to the plan is, for the purposes of paragraph 8301(4)(a), a contribution described in this paragraph.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending regulations. SOR/92-51, s. 7;
  • SOR/99-9, s. 9;
  • SOR/2001-67, s. 4.
 
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