Income Tax Interpretation Bulletin

Administrative costs of pension plans

NO: IT-105

DATE: May 30, 1973

SUBJECT: INCOME TAX ACT
Administrative Costs of Pension Plans

REFERENCE: Paragraph 20(1)(q) (Also Section 18)

This Bulletin replaces and cancels Interpretation Bulletin No. IT-8, dated April 22, 1971.

The deductible amount of an employer's current service contribution to a registered pension plan is limited by the provisions of paragraph 20(1)(q) of the Act and section 2700 of the Income Tax Regulations.

This limitation applies only to the amount being paid into the fund by the employer. It does not apply to expense incurred by the employer in connection with the administration of the plan, as these are not amounts paid into the fund. Such costs are a deductible business expense and are not prohibited by any provision of Section 18 of the Act as long as they are reasonable in the circumstances.