22 November 2000 External T.I. 2000-0053095 - FOREIGN PENSION 403(B)

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues: Will an amount received out of a U.S. pension plan under section 403(b) of the Internal Revenue Code in the U.S. be eligible for the rollover under 60(j) of the Act?

Position: Question of fact.

Reasons: Without a review of the particular plan documents and the facts surrounding an individual's participation in the particular plan, we are not able to provide definitive comments regarding amounts qualifying for the rollover under paragraph 60(j) of the Act.

XXXXXXXXXX 				2000-005309
M. P. Sarazin
Attention:  XXXXXXXXXX 

November 22, 2000

Dear Sir\Madam:

Re: Transfer of Funds from U.S. 403(b) Pension Plan to an RRSP

This is in reply to your letter of October 25, 2000, requesting a ruling on the transfer of an amount received out of a U.S. pension plan established under section 403(b) of the U.S. Internal Revenue Code to a registered retirement savings plan ("RRSP") under paragraph 60(j) of the Income Tax Act (the "Act").

Comments

Opinions concerning proposed transactions involving specific taxpayers will only be provided in response to a request for an advance income tax ruling. For more information concerning advance tax rulings, please refer to Information Circular 70-6R3 dated December 30, 1996, issued by the Canada Customs and Revenue Agency (the "Agency"). Copies of information circulars and interpretation bulletins are available on the Internet at the following site - http://www.ccra-adrc.gc.ca/formspubs/menu-e.html. However, we can provide you with the following general comments.

For purposes of the Act, the term "superannuation or pension benefit" is defined under subsection 248(1) of the Act to include any amount received out of or under a superannuation or pension fund or plan and any payment made to a beneficiary under such a plan or fund in accordance with the terms of, or resulting from the amendment or termination of, the plan or fund. The determination of whether a particular plan would constitute a superannuation or pension fund for purposes of the Act is a question of fact. Generally, a plan will be considered a superannuation or pension fund where contributions have been made to the plan by or on behalf of an employer or former employer of an employee in consideration for services rendered by the employee and the contributions are used to provide an annuity or other periodical payment on or after the employee's retirement in consideration for his or her employment services.

The Agency's general views regarding the transfer of amounts from non-registered pension plans to an RRSP are found in Interpretation Bulletin IT-528 titled "Transfers of Funds Between Registered Plans". Paragraph 26 discusses the application of subparagraph 60(j)(i) of the Act which allows a deduction for the transfer of a superannuation or pension benefit (that is not part of a series of periodic payments) from a non-registered pension plan for services provided by an individual in a period throughout which that individual was not resident in Canada.

To be eligible for a deduction under subparagraph 60(j)(i) for the transfer of the superannuation or pension benefit to an individual's RRSP, the individual has to include such a benefit in income for the year under subparagraph 56(1)(a)(i) of the Act and the transfer has to be made in the year the amount is included in the individual's income or within 60 days after the end of that year provided that:

a) the benefit payment is not exempt from Canadian tax by reason of subparagraph 110(1)(f)(i) of the Act,

b) the benefit is not part of a series of periodic payments,

c) the benefit is attributable to services rendered by the recipient or his spouse in a period throughout which such person was not resident in Canada, and

d) as is designated by the taxpayer in the taxpayer's return of income under Part I of the Act for the year.

Since you have not provided any information, we are not able to determine whether an individual's rights to amounts held in a specific U.S. 403(b) pension plan represent rights to amounts under a non-registered pension plan and whether the conditions set out in subparagraph 60(j)(i) of the Act would be satisfied in respect of a transfer.

We trust that our comments will be of assistance.

Yours truly,

Roberta Albert, CA
for Director
Financial Industries Division
Income Tax Rulings Directorate