12 April 1995 External T.I. 9509815 - DEFERRED SALARY RETIREMENT PLAN

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:

	Whether amounts paid from an unfunded pension plan 	created in 1984 can be transferred tax free to 	beneficiaries' RRSP?

Position TAKEN:

No.

Reasons FOR POSITION TAKEN:

The amounts deferred under the plan constitute income from employment.

			5-950981	

XXXXXXXXXX Robert Gagnon

Attention: XXXXXXXXXX

April 12, 1995

Dear Sirs:

Re: Deferred Salary Retirement Plan

This is in reply to your letter of April 10, 1995 wherein you requested whether amounts deferred by teachers pursuant to the plan described in the advance income tax ruling XXXXXXXXXX can be transferred tax-free to the teachers' registered retirement savings plans ("RRSP").

We have assumed that amounts of salary deferred by teachers pursuant to the plan are in respect of services rendered by the teachers before July 1986 because any amount of salary deferred by a teacher under the plan in respect of services rendered after June 1986 would have been taxable in the year of the deferral under the salary deferral arrangement rules.

In our view, amounts of employment income deferred by teachers under the plan in respect of services rendered before July 1986 cannot be transferred tax-free to the teachers' RRSP.

The foregoing opinion is not a ruling and, in accordance with the guidelines set out in Information Circular 70-6R2 dated September 28, 1990, is not binding on the Department.

We trust our comments will be of assistance to you.

Yours truly,

for Director
Financial Industries Division
Income Tax Rulings and
Interpretation Directorate