CRA finds that employer contributions to a predecessor fund are insufficient to give rise to superannuation or pension benefits
An Irish resident transferred the funds from a conventional Irish company pension plan to an Irish Personal Retirement Savings Account (PRSA) and, following taking up Canadian residence, will transfer the PRSA funds to an Irish Approved Retirement Fund (ARF). In finding that neither the PRSA nor the ARF qualified as a pension plan or an employee benefits plan, CRA stated:
If no employer contributions have been made to a foreign retirement plan, the plan will not be considered a pension plan, nor an EBP. In accordance with Abrahamson … the fact that the original source of funds in a foreign individual retirement plan was a pension plan is not relevant.
On this basis, withdrawals from the plan would not be taxable under s. 56(1)(a) as pension income or under s. 6(1)(g) as an EBP distribution. Instead, any income or capital gains generated under the plan would be taxable in Canada on a current, annual basis.
Neal Armstrong. Summary of 3 July 2019 External T.I. 2018-0781941E5 under s. 248(1) – superannuation or pension benefit.