Individual pension plans minimum withdrawals
On June 6, 2011; the Department of Finance Canada released Budget 2011 that incorporated changes to certain rules of the Income Tax Regulations concerning registered pension plans (RPPs). Bill C-13 introduced, among other things, a definition of the term individual pension plan (IPP) under subsection 8300(1) of the Regulations. It also introduced a requirement for an IPP to pay out to a member, each year after the year in which the member attains 71 years of age, a minimum amount.
The definition and rule for computing the IPP minimum amount are found under subsection 8500(1) of the Regulations.
The purpose of this requirement is to establish reasonable limits on deferrals of tax on IPP savings and generally ensure that such savings are received as income throughout the retirement period of the member, consistent with the basic purpose of RPPs.
These minimum withdrawals apply to the 2012 and subsequent taxation years for IPP members who reached 71 years of age in 2011 or earlier.
If your RPP meets the IPP definition, you must amend your plan terms to include the IPP minimum withdrawal requirement. To make it easy for you to amend your RPP, we have created a form containing generic wording for the amendments. If you choose to use this wording, complete and sign the form and return it to the Registered Plans Directorate.
We have pre-approved the generic wording and have waived the requirement that you send a Form T-920, Application to Amend a Registered Pension Plan, or other supporting documents such as a board resolution with the amendment. This waiver applies to this generic wording only and not to any other plan amendments.
These amendments, effective January 1, 2012, apply to both existing and new IPPs. You must submit the amendment to your plan no later than December 31, 2012. In the interim, IPPs must be administered in accordance with the new requirements.
Effective immediately, the Canada Revenue Agency (CRA) will stop mailing the Annual Information Return (Form T244) to registered pension plan administrators. Previously, the CRA mailed blank copies of this form to plan administrators who did not have an agreement covering these returns with their provincial authority or another regulator. In accordance with paragraph 8409(1)(b) of the Income Tax Regulations, this information return must be filed with the CRA within 180 days following the registered pension plan fiscal year end. This prescribed form must still be completed by plan administrators and sent to the CRA. The T244 can be found on our web site at the following link: http://www.cra-arc.gc.ca/E/pbg/tf/t244/README.html
This change is in line with the sustainable development strategy http://www.ec.gc.ca/dd-sd/default.asp?lang=En&n=F93CD795-1 , released by the Government of Canada in October 2010.
Please direct your questions or concerns to our general enquiry group: http://www.cra-arc.gc.ca/tx/rgstrd/cntct-eng.html
Registered Plans Directorate publishes RRSP/RRIF Bulletin No. 1
The CRA announces the launch of TFSA webinars.
2011 Budget - Questions and Answers (Measure for members of registered pension plans sponsored by employers who have commenced bankruptcy and insolvency proceedings).
Registered Plans Directorate announces 2011 Budget changes relating to financial institutions' reporting and remittance requirements as RRSP and RRIF carriers.
Registered Plans Directorate publishes Information Circular IC99-1 Registered Disability Savings Plans
"Frequently Asked Questions on RESPs" on RESPs is updated:
Question 8 - Transfers
The Registered Plans Directorate announces the 2012 TFSA dollar limit.
The Registered Plans Directorate (RPD) will be amending Actuarial Bulletin No. 1
Registered Plans Directorate publishes RDSP Bulletin No. 2
New version of T244, Registered Pension Plan Annual Information Return
On June 6, 2011, the Honourable James M Flaherty, Minister of Finance, announced proposed income tax measures. Certain measures were previously announced on March 22, 2011, in the Federal Budget.
The Canada Revenue Agency has prepared several questions and answers related to these measures. This information is available at www.cra.gc.ca/gncy/bdgt/2011/menu-eng.html.
For further details on the Budget, visit the Finance Canada website at http://www.fin.gc.ca/.
New version of T1200, Actuarial Information Summary
Registered Plans Directorate publishes RESP Bulletin No. 2
Registered Plans Directorate publishes RDSP Bulletin No. 1
Update to the technical specifications for RSP/RIF listings (The contract field must be unique for each annuitant under a specimen plan or fund. Once an account is closed, the contract number may not be reused in the future).
Registered Plans Directorate publishes Compliance Bulletin no. 7
Proposed tax changes related to the Saskatchewan Pension Plan
Update on rejected individual TFSA record from CRA (code 11, 37 and 72)
Question 16 of the "2005 RPP Consultation session" is modified - Incorrect pension payments - over and under payments
"Frequestly Asked Questions" on RESPs is updated:
Question 6(j)- What is a post-secondary educational institution for the purposes of an EAP?
Question 6(k) - How does one confirm if a post-secondary educational institution is recognized for EAP purposes?
Question 29 of the "Frequently Asked Questions on RPPs" - What review process does RPD undertake for an 8503(5) waiver request?
Registered Plans Directorate publishes Information Circular IC93-3R1 Registered Education Savings Plans
Update to Question 2 of the 2009 RPP Practitioners' Forum: Annuity Purchase Treated as a Transfer under the Income Tax Act. The Canada Revenue Agency will allow the payment of a lump sum representing the difference between the commuted value of a member's deferred pension and the purchase price of annuity from a licensed annuity provider. This lump sum payment is a permissible distribution when required by the Pension Benefits Standards Act, 1985 or similar law of a province.
Registered Plans Directorate publishes Actuarial Bulletin No.2
Registered Investments 2009 as of December 31, 2009 is available in the Canada Gazette.
The fillable version of form T2214 is available.
Question 28 of the "Frequently Asked Questions on RPPs" - Increase in the surplus threshold under the Income Tax Act from 10 per cent to 25 per cent
Registered Plans Directorate (RPD) does not plan to host an RPP Practitioners' Forum in 2010.
Question 17 of the of the "Frequently Asked Questions" on RDSPs (Why are RDSP contracts communicated to a financial institution as "pending" when an RDSP contract is considered registered at the time of signature?)
Question 27 of the "Frequently Asked Questions on RPPs" - 2010 defined benefit limit
The Registered Plans Directorate publishes its updated position on Flexible Pension Plans
The Honourable Jim Flaherty, Minister of Finance, announced on October 27, 2009, proposed measures to amend the Pension Benefits Standards Act, 1985, applicable to federally regulated pension plans, and the Income Tax Act, which applies to both federally and provincially regulated pension plans. The release can be found on the Department of Finance website at: http://www.fin.gc.ca/n08/09-103-eng.asp
The Honourable Jim Flaherty, Minister of Finance, today issued a news release announcing his intention to propose amendments to the Income Tax Act to strengthen the rules applicable to Tax Free Savings Accounts (TFSAs). The release can be found on the Department of Finance website at http://www.fin.gc.ca/n08/09-099-eng.asp
Question 8 (Process for revising an application package) in the following document "Application Package - Approval Process" is updated.
Registered Investments 2008 as of December 31, 2008 is available in the Canada Gazette.
You should use the new version of the T2214 for all deferred profit sharing plan registrations submitted after June 29, 2009. As of November 1, 2009, we will not accept applications that use a previous version of the T2214. They will be returned to the sender.
New version of T2214, Application for Registration as a Deferred Profit Sharing Plan.
Registered Plans Directorate publishes its sixth Compliance Bulletin — Replaced by Compliance Bulletin No. 6r1
Administrative relief - Retroactive lump-sum payment in lieu of missed pension benefits
RZ program account for TFSA annual information return.
The Registered Plans Directorate wishes to re-confirm that multi-purpose holder application forms will not be accepted for TFSAs.
Due to the differing regulatory framework, terminology, and tax treatment, the TFSA is distinct from other registered products under the Income Tax Act. Also, based on our experience, there is significant administrative relief associated with errors made when filling out multi-purpose application forms. Consequently, TFSA applications cannot be part of a multi-purpose holder application form.
Revised TFSA reporting data elements: Account number on Individual records is now mandatory and must be unique under the TFSA Identification number, addition of the "email address" in the contact information, addition of fair market value at date of death on the Individual records, deletion of the "contact person" information on the Individual records (only required on Summary).
The Registered Plans Directorate RPP glossary is updated.
Registered Plans Directorate publishes Newsletter 94-3RUsing Assumptions to compute the Present value of Benefits
Section 10.1 (Eligible Service), Sections 11.18 to 11.26 (Phased Retirement Benefits), Section 12.2 (Highest Average Compensation) and Section 15.3.1 (Qualifying Period) of the Technical Manual are modified to include phased retirement benefits.
T4084 Pension Adjustment Guide
Registered Investments 2007 as of December 31, 2007 is available in the Canada Gazette.
Chapters 8 (Conditions Applicable to all Pension Plans), 9 (Defined Benefit Provisions), 14 (Money Purchase Provisions) and 20 (Transfer - Defined Benefit to Money Purchase) of the Technical Manual are modified to reflect the increase in the age limit to 71.
REMINDER - The Canada Revenue Agency will return any application for registration and request for approval of amendments to a registered pension plan received on or after September 30, 2007, if the new version of the prescribed form, either T510, Application to Register a Pension Plan or T920, Application to Amend a Registered Pension Plan is not correctly completed and attached to the appropriate documents that constitute a complete application. For more information, please refer to Re-engineering - Frequently Asked Questions - RPP Forms. For more information on what constitutes a complete application to register a pension plan or amend a registered pension plan, please refer to Frequently Asked Questions - Application to register or amend a registered pension plan.
After September 30, 2007, our policy of returning an incomplete application to register a pension plan to the submitter will be expanded to include an incomplete application to amend a registered pension plan. Details on what constitutes a complete application to register or amend a registered pension plan can be obtained by referring to Frequently Asked Questions - Application to register or amend a registered pension plan.
The form T510, Application to Register a Pension Plan has been revised and is now available on the internet site in fillable format. After September 30, 2007, applications for pension plan registration using a previous version of the form will be returned to sender. For more information concerning this revised form please see Re-engineering - Frequently Asked Questions - RPP Forms .
The form T920, Application to Amend a Registered Pension Plan has been revised and is now available on the internet site in fillable format. After September 30, 2007, applications to amend a registered pension plan using a previous version of the form will be returned to the sender. For more information concerning this revised form please see Re-engineering - Frequently Asked Questions - RPP Forms .
New formT2011, Registered Pension Plan Change of Information Form has been created to assist pension plan administrators and the Canada Revenue Agency (CRA) in identifying, processing and updating important contact and other information relating to registered pension plans. This form is used when the information provided does not constitute an amendment to the pension plan documentation. The T2011 is not a prescribed form and its use is not mandatory. However, its use will assist the CRA in updating and keeping your plan information current. For more information concerning this new form please see Re-engineering - Frequently Asked Questions - RPP Forms .
New form T2014, Registered Pension Plan Priority Identification Form has been created to assist pension plan administrators and the Canada Revenue Agency (CRA) in identifying and processing important submissions relating to registered pension plans. The T2014 is not a prescribed form and its use is not mandatory. However, its use will assist the CRA in identifying and correctly assigning your submission quickly. For more information concerning this new form please see Re-engineering - Frequently Asked Questions - RPP Forms .
Section 11.1.3 of the Technical Manual is modified (Regulation 8503(4)(a)(iii) - Past Service Contributions) to specify that contributions in respect of post-1989 years are limited to the amount reasonably necessary to fund post-1989 benefits
Section 12.1.1 of the Technical Manual is modified (Regulation 8504(1)(a)(i) - Maximum for Connected Persons) to specify that the lesser of the defined benefit limit and 2% of earnings test must be done for every year of service
List of Registered Investments 2006 as of December 31, 2006 is now available in the Canada Gazette.
To learn more about Pension Advisory Committee members' roles and responsibilities, please see http://www.cra-arc.gc.ca/tx/rgstrd/rpp-rpa/mmbrshp-eng.html.
Pension Advisory Committee members' autobiographies are available at : http://www.cra-arc.gc.ca/tx/rgstrd/rpp-rpa/tbgrphs-eng.html.
List of Registered Investments 2005 as of December 31, 2005 is now available in the Canada Gazette.
Pension Advisory Committee Record of Recommendations/Decisions - Meeting of October 11 and 12, 2005
The Registered Plans Directorate Technical Manual on registered pension plans (RPP) is now available online on the RPP site. Our clients requested that we publish this internal resource as an aid to them in understanding our interpretation of the Income Tax Act legislation affecting registered pension plans. As part of our educational outreach program, we are pleased to provide this resource.
The Registered Plans Directorate sent a letter to Registered Pension Plan (RPP) clients on November 1, 2005 to alert them of upcoming changes to RPP registration processes. These process changes, the first under the Directorate's Re-engineering Initiative, will come into effect on November 7, 2005. For more information, see the letter and our Frequently Asked Questions-RPPs on the new processes.
Information concerning the Pension Advisory Committee available on RPD Web site
Question 6 of the " 2005 Budget - Questions and Answers " is modified (Funding of benefits based on the proposed increase to the defined benefit limit before the proposed changes to the Income Tax Act are enacted)
List of Registered Investments 2004 as of December 31, 2004 is now available in the Canada Gazette.
List of Members Pension Advisory Committee
The Registered Plans Directorate invites you to submit your application for membership on the new CRA Pension Advisory Committee
The Registered Plans Directorate retains Archived newsletters for historical purposes.
Registered Plans Directorate electronic mailing list, a free service to help us serve you better
Registered Plans Directorate publishes Newsletter 04-1 Transfers from a Defined Benefit Provision to a Money Purchase Provision, an RRSP, or a RRIF and Transfers between Defined Benefit Provisions
Registered Plans Directorate on-line survey
IC93-3R Registered Education Saving Plans - Draft — Replaced by IC93–3R1
T3 returns for non-registered education savings plans (ESPs) set up in 1999 and 2000
The Registered Plans Directorate has introduced a new method to simplify how to file locked-in addenda for RSPs and RIFs.