Definitions for RRSP

Annuitant

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

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 support.

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 provision

These are terms of a registered pension plan (RPP) that promise a certain level of pension on retirement based on the employee's earnings and years of service.

Earned income

We calculate your earned income by adding your employment earnings, self-employment earnings, and certain other types of income, then subtracting specific employment expenses and business or rental losses.

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 that you were. To do so, 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.

Matured RRSP

An RRSP that is paying you retirement income.

Money purchase provision

These are terms of a Registered pension plan (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 a DPSP or a defined benefit or money purchase provision of an RPP of which you are member. You may also have a pension credit if you participate in a foreign plan. The pension credit is a measure of the value of the benefit that accrued to you during the year under these arrangements.

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.

Qualifying group RRSP contributions

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

• it is for two or more individuals;
• the contributions are amounts you are entitled to for services you provided; and
• the contributions are remitted to the RRSP by the person who pays you, or by an agent for that person.

Qualifying group RRSP contributions do not include amounts that 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 Retirement Plan

For purposes of the Canada U.S. Tax Convention, a United States qualifying retirement plan is a plan that is generally exempt from income tax in the U.S. and is operated primarily to provide pension or retirement benefits. Common qualifying U.S. retirement plans include 401(k) arrangements.

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 registered contract between an individual (the subscriber) and a person or organization (the promoter). 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. Funds are contributed 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 savings plan that you establish, that we register, and to which you or your spouse or common-law partner contribute. Any income you earn in the RRSP is usually exempt from tax as long as the funds remain in the plan; you generally have to pay tax when you 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 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. In kind contributions consist of the fair market value of the property.

RRSP deduction

This refers to the amount you indicate on line 208 when you file your return. Your RRSP deduction claim is limited by the amount of RRSP contributions previously made and your RRSP deduction limit.

RRSP deduction limit

This refers to the maximum amount you can deduct from contributions you made to your RRSPs or to your spouse's RRSP or common law partner's RRSP for a year (excluding transfers to your RRSPs of certain types of qualifying income). The calculation is based, in part, on your earned income in the previous year. 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 dollar limit

This is the maximum amount of new RRSP deduction room that you can create for a year and is one or the amounts used to determine your RRSP deduction limit for that year.

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

This applies only to a person to whom you are legally married.

TIPS (Tax information Phone Service)

This is an automated service that sends you personal and general information. You can call T.I.P.S. to determine the amount of RRSP contributions you can deduct for 2011. T.I.P.S. RRSP service is available from mid-September to April 30. For RRSP information, you will be asked to provide your social insurance number, your month and year of birth, and the total income you reported on line 150 of your 2010 return. The T.I.P.S. telephone number is 1-800-267-6999.

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 and that you did not designate as an HBP or LLP repayment for any year. This amount is carried forward to the following year and you can use it as a deduction 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.