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

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Regulations are current to 2019-11-19 and last amended on 2019-06-25. Previous Versions

PART LXXXVRegistered Pension Plans (continued)

Conditions Applicable to Amendments

  •  (1) For the purposes of paragraph 147.1(4)(c) of the Act, the following conditions are prescribed in respect of an amendment to a registered pension plan:

    • (a) where the amendment increases the accrued lifetime retirement benefits provided to a member under a defined benefit provision of the plan, the increase is not, in the opinion of the Minister, inconsistent with the conditions in paragraphs 8503(3)(h) and (i); and

    • (b) where the plan is a grandfathered plan and the amendment increases the bridging benefits provided to a member under a defined benefit provision of the plan, the member’s bridging benefits, as amended, comply with the condition in subparagraph 8503(2)(b)(ii) that would apply if the plan were not a grandfathered plan.

  • (2) Where an amendment to a registered pension plan provides for the return to a member of all or a part of the contributions made by the member under a defined benefit provision of the plan, the plan becomes a revocable plan at any time that an amount (other than an amount that may be transferred from the plan in accordance with subsection 147.3(6) of the Act) that is payable to the member as a consequence of the amendment is not paid to the member as soon after the amendment as is practicable.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/92-51, s. 7
  • SOR/95-64, s. 16

Registration and Amendment

  •  (1) For the purpose of subsection 147.1(2) of the Act, an application for registration of a pension plan shall be made by sending the following documents by registered mail to the Commissioner of Revenue at Ottawa:

    • (a) an application in prescribed form containing prescribed information;

    • (b) certified copies of the plan text and any other documents that contain terms of the plan;

    • (c) certified copies of all trust deeds, insurance contracts and other documents that relate to the funding of benefits under the plan;

    • (d) certified copies of all agreements that relate to the plan; and

    • (e) certified copies of all resolutions and by-laws that relate to the documents referred to in paragraphs (b) to (d).

  • (2) Where an amendment is made to a registered pension plan, to the arrangement for funding benefits under the plan or to a document that has been filed with the Minister in respect of the plan, within 60 days after the day on which the amendment is made, the plan administrator shall send to the Commissioner of Revenue at Ottawa

    • (a) a prescribed form containing prescribed information; and

    • (b) certified copies of all documents that relate to the amendment.

  • (3) For the purpose of subsection 147.1(4) of the Act, an application for the acceptance of an amendment to a registered pension plan is made in prescribed manner if the documents that are required by subsection (2) are sent by registered mail to the Commissioner of Revenue at Ottawa.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/92-51, s. 7
  • SOR/2007-116, s. 17

Designated Laws

 For the purposes of paragraph 8302(3)(m), subparagraph 8502(c)(iii) and paragraph 8517(5)(f), designated provision of the law of Canada or a province means subsection 21(2) of the Pension Benefits Standards Act, 1985 and any provision of a law of a province that is similar to that subsection.

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

Prohibited Investments

  •  (1) For the purposes of subparagraph 8502(h)(i) and subject to subsections (2), (2.1) and (3), a prohibited investment in respect of a registered pension plan is a share of the capital stock of, an interest in, or a debt of

    • (a) an employer who participates in the plan,

    • (b) a person who is connected with an employer who participates in the plan,

    • (c) a member of the plan,

    • (d) a person or partnership that controls, directly or indirectly, in any manner whatever, a person or partnership referred to in paragraph (a) or (b), or

    • (e) a person or partnership that does not deal at arm’s length with a person or partnership referred to in paragraph (a), (b), (c) or (d),

    or an interest in, or a right to acquire, such a share, interest or debt.

  • (2) A prohibited investment does not include

    • (a) a debt obligation described in paragraph (a) of the definition fully exempt interest in subsection 212(3) of the Act;

    • (b) a share listed on a designated stock exchange;

    • (c) a bond, debenture, note or similar obligation of a corporation any shares of which are listed on a designated stock exchange;

    • (d) an interest in, or a right to acquire, property referred to in paragraph (b) or (c); or

    • (e) a mortgage in respect of real property situated in Canada that

      • (i) where this condition has not been waived by the Minister and the amount paid for the mortgage, together with the amount of any indebtedness outstanding at the time the mortgage was acquired under any mortgage or hypothec that ranks equally with or superior to the mortgage, exceeds 75 per cent of the fair market value, at that time, of the real property that is subject to the mortgage, is insured under the National Housing Act or by a corporation that offers its services to the public in Canada as an insurer of mortgages,

      • (ii) where the registered pension plan in connection with which the mortgage is held would be a designated plan for the purposes of subsection 8515(5) if subsection 8515(4) were read without reference to paragraph (b) thereof, is administered by an approved lender under the National Housing Act, and

      • (iii) bears a rate of interest that would be reasonable in the circumstances if the mortgagor dealt with the mortgagee at arm’s length.

  • (2.1) Where a share of the capital stock of, an interest in or a debt of, a person who is connected with a particular employer who participates in a registered pension plan that is a multi-employer plan would, but for this subsection, be a prohibited investment in respect of the plan, the property is not a prohibited investment in respect of the plan if

    • (a) the plan contains no money purchase provision other than a money purchase provision under which each member account is credited, on a reasonable basis and no less frequently than annually, an amount based on the income earned, losses incurred and capital gains and capital losses realized, on all of the property held by the plan;

    • (b) at the time the property is acquired by the plan, there are at least 15 employers who participate in the plan and, for this purpose,

      • (i) all employers who are related to each other are deemed to be a single employer, and

      • (ii) all the structural units of a trade union, including each local, branch, national and international unit, are deemed to be a single employer;

    • (c) at the time the property is acquired by the plan, no more than 10% of the active members of the plan are employed by the particular employer or by any person related to the particular employer;

    • (d) the property would not be a prohibited investment in respect of the plan if subsection (1) were read without reference to paragraph (1)(b); and

    • (e) immediately after the time the property is acquired by the plan, the total of all amounts each of which is the cost amount to a person of a property held in connection with the plan that would, but for this subsection, be a prohibited investment in respect of the plan does not exceed 10% of the total of all amounts each of which is the cost amount to a person of a property held in connection with the plan.

  • (2.2) For the purposes of the conditions set out in paragraphs (2.1)(b) and (c), two corporations that are related to each other solely because they are both controlled by Her Majesty in right of Canada or a province are deemed not to be related to each other.

  • (3) A prohibited investment in respect of a registered pension plan does not include an investment that was acquired by the plan before March 28, 1988.

  • (4) For the purposes of subsection (3), where at any time after March 27, 1988, the principal amount of a bond, debenture, note, mortgage or similar obligation increases as a consequence of the advancement or lending of additional amounts, or the maturity date of such an obligation is extended, the obligation shall, after that time, be deemed to have been issued at that time.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/92-51, s. 7
  • SOR/94-686, ss. 62, 78(F), 79(F)
  • SOR/2001-67, s. 9
  • 2007, c. 35, s. 86
  • 2013, c. 34, s. 410
 
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