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

Regulations are current to 2017-11-20 and last amended on 2017-07-01. Previous Versions

Pension Adjustment Reversal

Total Pension Adjustment Reversal

  •  (1) For the purpose of subsection 248(1) of the Act, an individual’s total pension adjustment reversal for a calendar year means the total of all amounts each of which is the pension adjustment reversal (in this Part and Part LXXXIV referred to as “PAR”) determined in connection with the individual’s termination in the year from a deferred profit sharing plan or from a benefit provision of a registered pension plan.

Termination in 1997

  • (2) For the purposes of subsection (1) and the description of R in paragraph 8307(2)(b), where an individual terminates in 1997 from a deferred profit sharing plan or from a benefit provision of a registered pension plan, the termination is deemed to have occurred in 1998.

PAR — Deferred Profit Sharing Plan

  • (3) For the purposes of this Part and Part LXXXIV and subject to subsection (12), an individual’s PAR determined in connection with the individual’s termination from a deferred profit sharing plan is

    • (a) if the conditions in subsection (13) are satisfied with respect to the termination, the total of all amounts each of which is an amount

      • (i) included in determining a pension credit of the individual under the plan, and

      • (ii) to which the individual has ceased, at or before the time of the termination, to have any rights,

      but does not include any amount to which a spouse or common-law partner or former spouse or common-law partner of the individual has acquired rights as a consequence of a breakdown of their marriage or common-law partnership; and

    • (b) in any other case, nil.

PAR — Money Purchase Provision

  • (4) For the purposes of this Part and Part LXXXIV and subject to subsection (12), an individual’s PAR determined in connection with the individual’s termination from a money purchase provision of a registered pension plan is

    • (a) if the conditions in subsection (14) are satisfied with respect to the termination, the total of all amounts each of which is an amount

      • (i) included in determining a pension credit of the individual under the provision, and

      • (ii) to which the individual has ceased, at or before the time of the termination, to have any rights,

      but does not include any amount to which a spouse or common-law partner or former spouse or common-law partner of the individual has acquired rights as a consequence of a breakdown of their marriage or common-law partnership; and

    • (b) in any other case, nil.

PAR — Defined Benefit Provision

  • (5) For the purposes of this Part and Part LXXXIV and subject to subsections (6) and (12), an individual’s PAR determined in connection with the individual’s termination from a defined benefit provision of a registered pension plan is

    • (a) where the conditions in subsection (14) are satisfied with respect to the termination, the amount determined by the formula

      A + B - C - D

      where

      A
      is the total of all amounts each of which is, in respect of a particular year that is the year in which the termination occurs or that is a preceding year, the lesser of
      • (i) the total of all amounts each of which is the pension credit of the individual under the provision for the particular year with respect to an employer, and

      • (ii) the RRSP dollar limit for the year following the particular year,

      B
      is the total of all amounts each of which is the portion of the grossed-up amount of a provisional PSPA (other than a provisional PSPA determined in accordance with subsection 8303(8)) of the individual that is associated with a past service event occurring before the time of the termination that can reasonably be considered to be attributable to benefits provided under the provision,
      C
      is the total of all amounts each of which is a specified distribution made in respect of the individual and the provision at or before the time of the termination, and
      D
      is the total of all amounts each of which is a PA transfer amount in relation to the individual’s termination from the provision; and
    • (b) in any other case, nil.

Defined Benefit Pension Credits

  • (6) For the purpose of subparagraph (i) of the description of A in paragraph (5)(a), in determining an individual’s PAR in connection with the individual’s termination from a defined benefit provision of a registered pension plan,

    • (a) the individual’s pension credits under the provision for the year in which the termination occurs shall be determined without regard to benefits provided after the time of the termination; and

    • (b) the individual’s pension credits under the provision for each year in which the plan was a specified multi-employer plan are deemed to be nil.

Grossed-up PSPA Amount

  • (7) For the purposes of the descriptions of B in subsection 8303(7.1) and paragraph (5)(a), the grossed-up amount of an individual’s provisional PSPA with respect to an employer that is associated with a past service event is the amount that would be the provisional PSPA if

    • (a) the values of C and D in subsections 8303(3) and 8304(5) were nil; and

    • (b) the words “at the time the past service event occurred” in paragraph (b) of the description of A in subsection 8304(5) were read as “immediately before the time the past service event occurred”.

Specified Distribution

  • (8) For the purpose of the description of C in paragraph (5)(a), an amount paid under a defined benefit provision of a registered pension plan with respect to an individual is a specified distribution made in respect of the individual and the provision at the time it is paid, except to the extent that

    • (a) it can reasonably be considered to be a payment of benefits in respect of any period before 1990;

    • (b) it is transferred to another registered pension plan (other than a plan that is, at the time of the transfer, a specified multi-employer plan) in accordance with subsection 147.3(3) of the Act;

    • (c) it is transferred to another defined benefit provision of the plan where the transfer would, if the provision and the other provision were in separate registered pension plans, constitute a transfer in accordance with subsection 147.3(3) of the Act;

    • (d) it is a payment in respect of an actuarial surplus;

    • (e) it is

      • (i) a return of contributions made by the individual under the provision, where the contributions are returned pursuant to an amendment to the plan that also reduces the future contributions that would otherwise be required to be made under the provision by members of the plan and that does not reduce benefits provided under the provision, or

      • (ii) a payment of interest in respect of contributions that are returned as described in subparagraph (i);

    • (f) it can reasonably be considered to be a payment of benefits provided in respect of a period throughout which the plan was a specified multi-employer plan; or

    • (g) it can reasonably be considered to be a payment of benefits provided in respect of a period throughout which the individual was employed outside Canada, where the benefits became provided as a consequence of a past service event in respect of which the Minister had consented to the application of subsection 8303(10) for the purpose of determining the individual’s provisional PSPAs.

Property Made Available

  • (9) Where property held in connection with a particular defined benefit provision of a pension plan is made available at any time to provide benefits with respect to an individual under another benefit provision of a pension plan, subsection (8) applies as if the amount of the property had been paid under the particular provision at that time with respect to the individual.

PA Transfer Amount

  • (10) Where

    • (a) an individual has terminated, at a particular time after 1996, from a defined benefit provision (in this subsection referred to as the “former provision”) of a registered pension plan,

    • (b) lifetime retirement benefits (in this subsection referred to as the “past service benefits”) have, as a consequence of a past service event occurring at or before the particular time, become provided to the individual under another defined benefit provision of a registered pension plan in respect of a period that is or was pensionable service of the individual under the former provision, and

    • (c) lifetime retirement benefits to which the individual is or was entitled under the former provision in respect of the period have, under subsection 8304(5), been taken into account as former benefits in determining a provisional PSPA of the individual that is associated with the past service event,

    for the purposes of subsection 8406(5) and the description of D in paragraph (5)(a), the lesser of

    • (d) the portion of the value determined for A in subsection 8303(3), for the purpose of determining the provisional PSPA, that can reasonably be considered to be attributable to the past service benefits, and

    • (e) the portion of the value determined for B in subsection 8303(3), for the purpose of determining the provisional PSPA, that can reasonably be considered to be attributable to the former benefits

    is a PA transfer amount in relation to the individual’s termination from the former provision.

Special 1997 PA Transfer Amount

  • (11) Where

    • (a) an individual has terminated, at a particular time in 1997, from a particular defined benefit provision of a registered pension plan,

    • (b) lifetime retirement benefits (in this subsection referred to as the “past service benefits”) have, as a consequence of a past service event that occurred after the particular time and before 1998, become provided to the individual under the particular provision, or under another defined benefit provision of a registered pension plan, in respect of a period that was previously pensionable service of the individual under the particular provision, and

    • (c) lifetime retirement benefits to which the individual was previously entitled under the particular provision in respect of the period have, under subsection 8304(5), been taken into account as former benefits in determining a provisional PSPA of the individual that is associated with the past service event,

    for the purposes of subsection 8406(5) and the description of D in paragraph (5)(a), the lesser of

    • (d) the portion of the value determined for A in subsection 8303(3), for the purpose of determining the provisional PSPA, that can reasonably be considered to be attributable to the past service benefits, and

    • (e) the portion of the value determined for B in subsection 8303(3), for the purpose of determining the provisional PSPA, that can reasonably be considered to be attributable to the former benefits

    is a PA transfer amount in relation to the individual’s termination from the particular provision at the particular time.

Subsequent Membership

  • (12) Where an individual has ceased at a particular time to be a member in relation to a deferred profit sharing plan or a benefit provision of a registered pension plan and subsequently becomes a member in relation to the plan or the provision, as the case may be, the following rules apply in determining the individual’s PAR in connection with any subsequent termination from the plan or the provision, as the case may be:

    • (a) in the case of a deferred profit sharing plan or money purchase provision, any amounts included in a pension credit of the individual under the plan or provision because of an allocation to the individual before the particular time shall be disregarded; and

    • (b) in the case of a defined benefit provision,

      • (i) the value of A in paragraph (5)(a) shall be determined without regard to any pension credit, or portion of a pension credit, that is attributable to benefits provided under the provision before the particular time,

      • (ii) the value of B in paragraph (5)(a) shall be determined without regard to any provisional PSPA that is associated with a past service event that occurred before the particular time, and

      • (iii) the value of C in paragraph (5)(a) shall be determined without regard to any specified distribution (as defined in subsection (8)) made at or before the particular time.

Termination Conditions — Deferred Profit Sharing Plan

  • (13) For the purpose of paragraph (3)(a), the conditions with respect to an individual’s termination from a deferred profit sharing plan are the following:

    • (a) the termination occurs after 1996 and otherwise than because of death; and

    • (b) no payments described in subparagraph 147(2)(k)(v) of the Act have been made out of or under the plan with respect to the individual.

Termination Conditions — Registered Pension Plan

  • (14) For the purposes of paragraphs (4)(a) and (5)(a), the conditions with respect to an individual’s termination from a benefit provision of a registered pension plan are the following:

    • (a) the termination occurs after 1996 and otherwise than because of death; and

    • (b) no retirement benefits have been paid under the provision with respect to the individual (other than retirement benefits paid with respect to the individual’s spouse or common-law partner or former spouse or common-law partner as a consequence of a breakdown of their marriage or common-law partnership).

Breakdown of Marriage or Common-law Partnership
  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending regulations. [SOR/2001-188, s. 7]

  • (15) Where

    • (a) before a member terminates from a defined benefit provision of a registered pension plan, there has been a breakdown of the member’s marriage or common-law partnership, and

    • (b) as a consequence of the breakdown,

      • (i) the member has ceased to have rights to all or a portion of the benefits provided under the provision with respect to the member, and

      • (ii) an individual who is the member’s spouse or common-law partner or former spouse or common-law partner has acquired rights under the provision in respect of those benefits,

    for the purpose of subsection (8),

    • (c) any amount paid under the provision with respect to the rights acquired by the individual (other than a single amount paid under the provision at or before the time of the member’s termination in full satisfaction of the rights acquired by the individual) is deemed not to have been paid with respect to the member, and

    • (d) unless a single amount has been paid under the provision at or before the time of the member’s termination in full satisfaction of the rights acquired by the individual, a single amount equal to the present value (at the time the member terminates from the provision) of the benefits to which the member has ceased to have rights as a consequence of the breakdown is deemed to have been paid to the member at that time under the provision in full satisfaction of those benefits.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending regulations. SOR/99-9, s. 8;
  • SOR/2001-188, ss. 7, 13, 15.
 
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