Registered Plans Directorate Newsletter, no. 95-1
March 30, 1995

New Approach to Plan Registration

Name Change

Starting with this one, we have changed the name of the newsletter from Pension Reform Update to Registered Plans Division - Newsletter.

New Approach

We are sending you this newsletter to tell you about changes we have made to the way we process an application for registration of a pension plan. The changes will only affect an application if you need to amend the plan before we can accept it for registration, or if you amend the plan for other reasons before we register it.

Registration - a priority

The registration process should be as efficient as possible because of the negative consequences under the Income Tax Act if registration is delayed or refused. Transfers to or from other registered plans are restricted until a pension plan is registered. A non-registered pension plan is usually a retirement compensation arrangement (RCA). Consequently, if we refuse to register a plan, the RCA rules apply and the plan is subject to tax from the date it was established.

Although we give priority to applications for registration, delays are often beyond our control. After we review your application, we may ask you to change the plan to make it acceptable for registration. One of the most common delays occurs when amendments needed for registration are combined with amendments made to the plan for other reasons, such as amendments made on the employer's initiative or to meet pension standards legislation. Often, these other amendments need further changes to make them acceptable under the Income Tax Act, and registration is again delayed while the necessary changes are made.

With our new approach, we will register a plan before we approve amendments to it. This will reduce the number of times we handle an application, and will improve our overall efficiency. You can help us reduce the time needed to register a plan by sending us plan amendments as explained below.

Amendments needed for registration

When we request changes to the plan to make it acceptable for registration, you should make these changes as an independent set of amendments to the plan and send them to us separately from any other amendments that you want to make to the plan before we register it. We can then complete the registration process.

The amendments needed for registration should be effective on the same date the plan takes effect. You do not need to send a Form T920, Application for Acceptance of an Amendment to a Registered Pension Plan, with changes we have requested.

You should continue to send us the amendments you have made for other reasons with a completed Form T920. We will not process these amendments until we register the plan, unless the amendments are effective on the same date the plan takes effect.

One reminder notice

When you apply for registration, we decide whether the pension plan is acceptable under the Income Tax Act. If the plan needs to be amended before we can register it, we will:

• write to you requesting the amendments needed to make the plan acceptable for registration; and
• send you a reminder in six months, if necessary, asking you to submit the amendments within 90 days.

Because of our present workload, we will only send one reminder in most cases. You will have to initiate any further action on the registration of the plan.