Definitions for RRSP

Annuitant

Generally, an annuitant is the person for whom a retirement plan provides retirement income. In certain circumstances, the surviving spouse or common-law partner may qualify as the annuitant when, because of the death of the annuitant, he or she becomes entitled to receive benefits out of the retirement plan.

Common-law partner

This applies to a person who is not your spouse, with whom you are living in a conjugal relationship, and to whom at least one of the following situations applies. He or she:

a) has been living with you in such a relationship for at least 12 continuous months;

b) is the parent of your child by birth or adoption; or

c) has custody and control of your child (or had custody and control immediately before the child turned 19 years of age) and your child is wholly dependent on that person for suppport.

In addition, an individual immediately becomes your common-law partner if you previously lived together in a conjugal relationship for at least 12 continuous months and you have resumed living together in such a relationship. Under proposed changes, this condition will no longer exist. The effect of this proposed change is that a person (other than a person described in b) or c) above) will be your common-law partner only after your current relationship with that person has lasted at least 12 continuous months. This proposed change will apply to 2001 and later years.

Reference to "12 continuous months" in this definition includes any period that you were separated for less than 90 days because of a breakdown in the relationship.

Commutation payment

This is a fixed or single lump-sum payment from your RRSP annuity that is equal to the current value of all or part of your future annuity payments from the plan.

Deferred profit sharing plan (DPSP)

This is an employer-sponsored plan we register, in which the employer shares the profits of a business with all the employees or a designated group of employees.

Defined benefit provisions

These are terms of a registered pension plan that promise a certain level of pension on retirement based on your earnings and years of service.

Exempt period

The period from the date of death to December 31 of the year after the year of death.

Financially dependent

If you are child or grandchild of a deceased annuitant, you are generally considered financially dependent on that annuitant at the time of death if, before that person's death, you ordinarily resided with and depended on the annuitant, and you meet one of the following conditions:

• your net income for the previous year (shown on line 236 of your return) was less than the basic personal amount (line 300 from Schedule 1) for that previous year; or
• you are infirm and your net income for the previous year was equal to or less than the basic personal amount plus the disability amount (line 316 from schedule 1) for that previous year.

If, before the annuitant's death, you lived away from home because you were attending school, we still consider you to have resided with the annuitant.

If your net income was more than the amounts described above, we will not consider you to be financially dependent on the annuitant at the time of death, unless you can establish the contrary.

In such a case, you or the legal representative should submit a request in writing to your tax services office outlining the reasons why we should consider you to be financially dependent of the annuitant at the time of death.

Foreign plan

A plan or arrangement maintained primarily to benefit non-residents for services they perform outside Canada.

Gift

Any amount that someone other than you or your spouse or common-law partner contributed to your RRSP.

Government-sponsored retirement arrangement

This is an unregistered retirement plan established for people who are not employees of a government or other public body, but who are paid from public funds for their services

Locked-in RRSPs

In most cases, you will not be able to withdraw funds from a locked-in RRSP. We do not regulate or establish whether or not funds are locked in. Locked-in refers to the restrictions and limitations that are imposed by the Pension Benefit Act for each province and territory. The locked-in RRSP is designed to preserve pension assets for your retirement. Money put into your locked-in RRSP usually is the transfer value of pension benefits you have built up in your former employer's pension plan, which you asked to be moved when you terminate employment or plan membership. If you are unsure if your RRSPs are locked in, contact your issuer.

Matured RRSP

A matured RRSP is one that generally, is paying you retirement income.

Money purchase provisions

These are terms of an RPP under which the amount of your pension depends on how much you and your employer contribute to the RPP for you.

Pension adjustment (PA)

Your PA for a year is the total pension credits accrued for the year under RPP defined benefit or money purchase provisions and DPSPs your employer sponsors. A pension credit is a measure of the value of the benefit you earn for the year under a DPSP, or under a defined benefit or money purchase provision of an RPP.

If you participate in a government-sponsored retirement arrangement or a specified retirement arrangement, your pension credit amount may also measure the value of the benefit you earn for the year under these arrangements.

If you want to know how your PA is calculated or why you have a PA, contact your employer or plan administrator.

Person with a disability

A person with a disability is:

• someone who is entitled to the disability amount, line 316 on Schedule 1 in his or her income tax return, for the year before the HBP withdrawal and who still meets the eligibility requirements for the disability amount when the HBP withdrawal is made; or
• someone for whom Form T2201, Disability Tax Credit Certificate, has been approved by us for the year of the HBP withdrawal.
  
  If the form is not approved by us, the withdrawals will not be considered eligible under the HBP and will have to be included in income for the year of withdrawal or repaid.

Qualified beneficiary

A qualified beneficiary includes the deceased annuitant's spouse or common-law partner.

It also includes a financially dependent child or grandchild of the deceased annuitant, if the death occurred:

• in 1999 or later;
• in 1998, and the annuitant had no spouse or common-law partner at the time of death;
• in 1998, the annuitant had a spouse or common-law partner at the time of death, and an election was filed to treat the child or grandchild as a qualified beneficiary (for more information on this election, contact us);
• in 1996 or 1997, the annuitant had a spouse at the time of death, and an election was filed to treat the child or grandchild as a qualified beneficiary (for more information on this election, contact us); and
• from 1993 to 1997, and the annuitant had no spouse at the time of death.

Qualifying group RRSP contributions

These are often referred to as “mandatory group RRSP contributions”. They are required contributions which you make to a “qualifying arrangement”. An arrangement is a qualifying arrangement if:

• it is for two or more individuals;
• the contributions are amounts to which you are entitled for services that you rendered; and
• the contributions are remitted to the RRSP by the person or body that is required to pay you for the services, or by an agent for that person or body.

Qualifying group RRSP contributions do not include amounts which you could have prevented from being paid after beginning to participate in the arrangement and
within the 12 months before the contribution was paid.

Qualifying home

For the purposes of the Home Buyers' Plan, a qualifying home is a housing unit located in Canada. This includes existing homes and those being constructed. Single-family homes, semi-detached homes, townhouses, mobile homes, condominium units, and apartments in duplexes, triplexes, fourplexes, or apartment buildings, all qualify. A share in a co-operative housing corporation that entitles you to possess, and gives you an equity interest in, a housing unit located in Canada also qualifies. However, a share that only provides you with a right to tenancy in the housing unit does not qualify

Qualifying Retirement Plan

For the pusposes of rhe Canada-U.S. Convention (Convention), a United-States (U.S.) qualifying retirement plan is a plan that, among other things, is generally exempt from income taxation in the U.S. and is operated primarily to provide pension or retirement benefits. Canadian plans that are considered as qualifying retirement plans under the Convention include RPPs, RRSPs that are part of a group RRSP, DPSPs, and any RRSP and RRIF that is funded exclusively by rollover contributions from an RPP, DPSP opr RRSP that is part of a group RRSP.

Refund of premiums

This is an amount that is paid or considered to have been paid from a deceased annuitant's RRSP to a qualified beneficiary.

Registered education savings plan (RESP)

This is a contract between an individual (the subscriber) and a person or organization (the promoter). The Canada Revenue Agency (CRA) will register this contract. The subscriber generally makes contributions to the RESP, which earns income, paid in the form of educational assistance payments to one or more identified beneficiaries.

Registered pension plan (RPP)

This is a pension plan that we have registered. It is a plan where funds are set aside by an employer, or by an employer and employees, to provide a pension to employees when they retire.

Registered retirement income fund (RRIF)

This is a fund you establish with a carrier and that we register. You transfer property to the carrier from an RRSP, RPP, or from another RRIF, and the carrier makes payments to you.

Registered retirement savings plan (RRSP)

This is a retirement plan that we register and that you or your spouse or common-law partner establish and contribute to. Deductible RRSP contributions can be used to reduce your tax. Any income you earn in the RRSP is usually exempt from tax for the time the funds remain in the plan. However, you generally have to pay tax when you cash in or receive payments from the plan.

Related person with a disability

Is a person with a disability who is related to you by blood, marriage, common-law partnership, or adoption. A related person with a disability does not have to reside with you in the same home.

Retiring Allowance

Also called severance pay, this is an amount you receive on or after your retirement from an office or employment in recognition of long service. It includes payment for unused sick leave and amounts you receive for loss of office or employment, whether as a payment of damages or a payment under an order or judgment of a tribunal.

RRSP contribution

This is the amount you pay, in cash or in kind, at the time you contribute to an RRSP.

RRSP deduction

Refers to the amount you indicate on line 208 when you file your return.

RRSP deduction limit

This refers to the maximum amount you can deduct from contributions you made to your RRSPs or to a spousal or common-law partner RRSP for a year. The calculation is based, in part, on your previous year earned income (excluding transfers to your RRSPs of certain types of qualifying income). Pension adjustments (PAs), past service pension adjustments (PSPAs), pension adjustment reversals (PARs), and your unused RRSP deduction room at the end of the previous year, are also used to calculate the limit.

RRSP excess contributions

Generally, this is the amount of your RRSP contributions that is more than your RRSP deduction limit for the year plus $2,000. If you have RRSP excess contributions, you may have to pay a tax of 1% per month on those contributions.

Specified retirement arrangement

This is a pension plan that we do not register for income tax purposes and is either not funded or only partly funded.

Spousal or common-law partner RRSP

an RRSP that you establish to pay yourself income at maturity, but that your spouse or common-law partner contributes to.

Spouse

You have a spouse when you are legally married.

Unmatured RRSP

Generally, this is an RRSP that has not yet started to pay you a retirement income.

Unused RRSP contributions

This is the amount of RRSP contributions that you could not deduct or have chosen not to deduct. You can carry forward this amount and use it as a deduction in a future year up to your RRSP deduction limit for that year.

Unused RRSP deduction room at the end of the year

Generally, this is your RRSP deduction limit for the year minus the amount you deducted for RRSP and Saskatchewan Pension Plan contributions for that year.

For 2009 and later years, this amount is reduced by contributions you deduct for a year for amounts you contributed in the year to a qualifying retirement plan in the United States for services you rendered as an employee in the United States in the year. For more information see the coloured box on page 7.