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

Foreign Plans

Definition

• 8308.1 (1) In this section, foreign plan means a plan or arrangement (determined without regard to subsection 207.6(5) of the Act) that would, but for paragraph (l) of the definition retirement compensation arrangement in subsection 248(1) of the Act, be a retirement compensation arrangement.

Pension Credit

• (2) Subject to subsections (3) to (4.1), the pension credit of an individual for a calendar year with respect to an employer under a foreign plan is

  • (a) where paragraph (b) does not apply, nil; and

  • (b) where

    • (i) the year is 1992 or a subsequent year,

    • (ii) the individual became entitled in the year, either absolutely or contingently, to benefits under the foreign plan in respect of services rendered to the employer in a period throughout which the individual was resident in Canada and rendered services to the employer that were primarily services rendered in Canada or services rendered in connection with a business carried on by the employer in Canada, or a combination of those services,

    • (iii) the individual continued to be entitled at the end of the year, either absolutely or contingently, to all or part of the benefits, and

    • (iv) either

      • (A) no contribution was made under the foreign plan in the year in respect of the individual, except where

        • (I) no contribution was made because the foreign plan had an actuarial surplus, and

        • (II) had a contribution been made in respect of the benefits referred to in subparagraph (ii), it would have been a resident’s contribution (as defined in subsection 207.6(5.1) of the Act), or

      • (B) a contribution that is not a resident’s contribution was made under the foreign plan in the year in respect of the individual,

    the lesser of

    • (v) the amount, if any, by which 18% of the individual’s resident compensation from the employer for the year exceeds the PA offset for the year, and

    • (vi) the amount by which the money purchase limit for the year exceeds the PA offset for the year.

Pension Credit — Tax Treaty

• (2.1) For the purposes of applying subsection (2) in determining an individual’s pension credit for a calendar year with respect to an employer under a foreign plan, if any contributions made to, or benefits accruing under, the plan in respect of the individual and the calendar year benefit from the application of paragraph 8 of Article XVIII of the Canada-United States Tax Convention signed at Washington on September 26, 1980, or from the application of a similar provision in another tax treaty,

  • (a) subparagraph (2)(b)(ii) shall be read without reference to the words “was resident in Canada and”; and

  • (b) the portion of subsection (2) after subparagraph (b)(iv) shall be read as “the lesser of the money purchase limit for the year and 18% of the individual’s resident compensation from the employer for the year”.

Pension Credit — Alternative Determination

• (3) Subject to subsection (4), where the Minister has, on the written application of an employer, approved in writing a method for determining pension credits for a year with respect to the employer under a foreign plan, the pension credits shall be determined in accordance with that method.

Pension Credits for 1992, 1993 and 1994

• (4) The pension credit of an individual for 1992, 1993 or 1994 with respect to an employer under a foreign plan is the lesser of

  • (a) the amount that would, but for this subsection, be determined as the pension credit for the year, and

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

    • (i) 18% of the amount that would be the individual’s compensation from the employer for the year if the definition compensation in subsection 147.1(1) of the Act were read without reference to paragraphs (b) and (c) of that definition, and

    • (ii) the money purchase limit for the year

    exceeds the total of

    • (iii) $1,000, and

    • (iv) the amount that would be the pension adjustment of the individual for the year with respect to the employer if subsection 8301(1) were read without reference to paragraph (b) of that subsection.

Pension Credits — 1996 to 2002

• (4.1) For the purpose of determining the pension credit of an individual for a calendar year after 1995 and before 2003 with respect to an employer under a foreign plan, subparagraph (2)(b)(vi) shall be read as

  • “(vi) the money purchase limit for the year.”

Foreign Plan PSPA

• (5) Subject to subsection (6), where the benefits to which an individual is entitled, either absolutely or contingently, under a foreign plan are modified, the foreign plan PSPA of the individual with respect to an employer associated with the modification of benefits is the amount, if any, by which

  • (a) the total of all amounts each of which is the amount that, if this section were read without reference to subsection (3), would be the pension credit of the individual with respect to the employer under the foreign plan for a calendar year before the year in which the individual’s benefits are modified

  exceeds the total of all amounts each of which is

  • (b) the pension credit of the individual with respect to the employer under the foreign plan for a calendar year before the year in which the individual’s benefits are modified, or

  • (c) the foreign plan PSPA of the individual with respect to the employer associated with a previous modification of the individual’s benefits under the foreign plan.

Foreign Plan PSPA — Alternative Determination

• (6) Where the Minister has, on the written application of an employer, approved in writing a method for determining the foreign plan PSPA of an individual with respect to the employer associated with a modification of the individual’s benefits under a foreign plan, the individual’s foreign plan PSPA shall be determined in accordance with that method.

Prescribed Amount for Member of Foreign Plan

Prescribed Amount

• 8308.2 (1) For the purposes of the descriptions of B in the definitions RRSP deduction limit and unused RRSP deduction room in subsection 146(1) of the Act and the description of B in paragraph 204.2(1.1)(b) of the Act, there is prescribed in respect of an individual for a calendar year the lesser of the money purchase limit for the preceding calendar year (in this section referred to as the “service year”) and the amount determined by subsection (2), if the individual

  • (a) rendered services to an employer (excluding services that were primarily services rendered in Canada or services rendered in connection with a business carried on by the employer in Canada, or a combination of those services) throughout a period in the service year in which the individual was resident in Canada;

  • (b) became entitled, either absolutely or contingently, in the service year to benefits under a foreign plan (as defined in subsection 8308.1(1)) in respect of the services; and

  • (c) continued to be entitled at the end of the service year, either absolutely or contingently, to all or part of the benefits.

• (2) The amount determined for the purpose of subsection (1) is,

  • (a) if the only benefits to which the individ- ual became entitled in the service year under the foreign plan were provided under one or more money purchase provisions of the foreign plan, the total of all amounts each of which is the individual’s pension credit for the service year with respect to the employer under a money purchase provision of the foreign plan, determined

    • (i) as though the foreign plan were a registered pension plan,

    • (ii) without regard to any contributions made by the individual, and

    • (iii) if, under the laws of the country in which the foreign plan is established, any contributions made after the end of the service year are treated as having been made in the service year, as though those contributions were made in the service year and not when the contributions were actually made; and

  • (b) in any other case, the greater of

    • (i) the total that would be determined under paragraph (a) if the individual had not become entitled in the service year to any benefits under a defined benefit provision of the foreign plan, and

    • (ii) 10% of the portion of the individual’s resident compensation from the employer for the service year that is attributable to services rendered to the employer and included under paragraph (1)(a).

Specified Retirement Arrangements

Definition

• 8308.3 (1) In this section, specified retirement arrangement means, in respect of an individual and an employer, a plan or arrangement under which payments that are attributable to the individual’s employment with the employer are to be, or may be, made to or for the benefit of the individual after the termination of the individual’s employment with the employer, but does not include

  • (a) a plan or arrangement referred to in any of paragraphs (a) to (k), (m) and (n) of the definition retirement compensation arrangement in subsection 248(1) of the Act;

  • (b) [Repealed, SOR/99-9, s. 12]

  • (c) a plan or arrangement that does not provide in any circumstances for payments to be made to or for the benefit of the individual after the later of the last day of the calendar year in which the individual attains 71 years of age and the day that is 5 years after the day of termination of the individual’s employment with the employer;

  • (d) a plan or arrangement (in this paragraph referred to as the “arrangement”) that is, or would be, but for paragraph (l) of the definition retirement compensation arrangement in subsection 248(1) of the Act, a retirement compensation arrangement where

    • (i) the funding of the arrangement is subject to the Pension Benefits Standards Act, 1985 or a similar law of a province, or

    • (ii) the arrangement is funded substantially in accordance with the funding requirements that would apply if the arrangement were subject to the Pension Benefits Standards Act, 1985;

  • (e) a plan or arrangement that is deemed by subsection 207.6(6) of the Act to be a retirement compensation arrangement; or

  • (f) an arrangement established by the Judges Act or the Lieutenant Governors Superannuation Act.

Pension Credit

• (2) Subject to subsections (3) and (3.1), the pension credit of an individual for a calendar year with respect to an employer under a specified retirement arrangement is

  • (a) where paragraph (b) does not apply, nil; and

  • (b) where

    • (i) the year is 1993 or a subsequent year,

    • (ii) the employer is, at any time in the year,

      • (A) a person who is exempt, because of section 149 of the Act, from tax under Part I of the Act on all or part of the person’s taxable income, or

      • (B) the Government of Canada or the government of a province,

    • (iii) the individual became entitled in the year, either absolutely or contingently, to benefits under the arrangement in respect of employment with the employer,

    • (iv) at the end of the year, the individual is entitled, either absolutely or contingently, to benefits under the arrangement, and

    • (v) the amount determined by the formula

      0.85A - B

      is greater than nil where

      A

      is the lesser of

      • (A) the amount, if any, by which 18% of the individual’s resident compensation from the employer for the year exceeds the PA offset for the year, and

      • (B) the amount by which the money purchase limit for the year exceeds the PA offset for the year, and

      B

      is the amount that would be the pension adjustment of the individual for the year with respect to the employer if subsection 8301(1) were read without reference to paragraph (c) of that subsection,

    the amount that would be determined by the formula in subparagraph (v) if the reference to “0.85” in that formula were replaced by a reference to “1”.

Pension Credit — Alternative Determination

• (3) Where the Minister has, on the written application of an employer, approved in writing a method for determining pension credits for a year with respect to the employer under a specified retirement arrangement, the pension credits shall be determined in accordance with that method.

Pension Credits — 1996 to 2002

• (3.1) For the purpose of determining the pension credit of an individual for a calendar year after 1995 and before 2003 with respect to an employer under a specified retirement arrangement, the portion of paragraph (2)(b) after subparagraph (iv) shall be read as

  • “(v) the amount determined by the formula

    0.85A - B

    is greater than nil where

    A

    the lesser of

    • (A) the amount, if any, by which 18% of the individual’s resident compensation from the employer for the year exceeds the PA offset for the year, and

    • (B) the amount by which $15,500 exceeds the PA offset for the year, and

    B

    is the amount that would be the pension adjustment of the individual for the year with respect to the employer if subsection 8301(1) were read without reference to paragraph (c),

  the amount that would be determined by the formula in subparagraph (v) if

  • (vi) the reference to “0.85A” in that formula were read as a reference to “A”, and

  • (vii) clause (B) of the description of A in that subparagraph were read as

    • “(B) the money purchase limit for the year, and”.”.

Specified Retirement Arrangement PSPA

• (4) Subject to subsection (5), where the benefits to which an individual is entitled, either absolutely or contingently, under a specified retirement arrangement are modified, the specified retirement arrangement PSPA of the individual with respect to an employer associated with the modification of benefits is the amount, if any, by which

  • (a) the total of all amounts each of which is the amount that, if this section were read without reference to subsection (3), would be the pension credit of the individual with respect to the employer under the arrangement for a calendar year before the year in which the individual’s benefits are modified

  exceeds the total of all amounts each of which is

  • (b) the pension credit of the individual with respect to the employer under the arrangement for a calendar year before the year in which the individual’s benefits are modified, or

  • (c) the specified retirement arrangement PSPA of the individual with respect to the employer associated with a previous modification of the individual’s benefits under the arrangement.

Specified Retirement Arrangement PSPA — Alternative Determination

• (5) Where the Minister has, on the written application of an employer, approved in writing a method for determining the specified retirement arrangement PSPA of an individual with respect to the employer associated with a modification of the individual’s benefits under a specified retirement arrangement, the individual’s specified retirement arrangement PSPA shall be determined in accordance with that method.