A retirement compensation arrangement (RCA) is a plan or arrangement between an employer and an employee under which:
If you are an employer and you set up a retirement compensation arrangement, you have to deduct a 50% refundable tax on any contributions you make to a custodian of the arrangement and remit the amount of refundable tax you collect to the Receiver General on or before the 15th day of the month following the month during which it was withheld.
Before you make any contributions to the custodian, you have to file Form T733, Application for a Retirement Compensation Arrangement (RCA) Account Number, to apply for account numbers for both the employer and the custodian of the RCA.
The custodian has to deduct income tax from any distributions (periodic or lump-sum payments) made out of the RCA and remit the amount of income tax collected to the Receiver General.
Before the custodian makes any distributions out of the RCA, he or she has to file a Form T735, Application for a Remittance Number for Tax Withheld from a Retirement Compensation Arrangement (RCA), to apply for a remittance account number.
To report the distributions, the custodian has to file a T4A-RCA SUM, Information Return of Distributions from a Retirement Compensation Arrangement (RCA) and the related T4A-RCA, Statement of Distributions from a Retirement Compensation Arrangement (RCA). The custodian has to send them to the RCA Unit, Winnipeg Tax Centre on or before the last day of February of the year following the calendar year to which the information return applies.
For more information on this type of plan or arrangement, your responsibilities, and the forms you have to file, see Guide T4041, Retirement Compensation Arrangements Guide or call 1-800-959-5525.