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 a reimbursement from the Consolidated Revenue Fund (CRF) of contributions (plus interest) made by a judge, in the event of retirement before becoming eligible to receive an annuity under the Judges Act, can be transferred to an RRSP?
Position: Yes
Reasons: 147.3(4) of the ITA and subsections 50(1) through (3) of the Judges Act. Subsection 50(3) of the Judges Act deems the amounts contributed pursuant to subsections 50(1) and (2) of the Judges Act (judges contribute a percentage of their salary to the CRF) to be contributed to or under a registered pension plan for the purposes of the ITA.
Department of Justice
Civil Litigation Branch
2171 - 284 Wellington Street
Ottawa ON K1A 0H8 2000-001659
G. Kauppinen
Attention: David Sgayias
March 29, 2000
Dear Sirs:
Re: Judicial Compensation and Benefits Commission
This is in reply to your facsimile transmission dated March 24, 2000. You have asked our opinion as to whether a judge can transfer contributions made to the Consolidated Revenue Fund to an RRSP in the event the judge retires before becoming eligible to receive an annuity as provided under the Judges Act.
You have provided us with excerpts from the Judges Act which are described or reproduced below.
Subsection 50(1) and paragraph 50(2)(a):
These provisions require a judge to contribute a percentage of his or her salary to the Consolidated Revenue Fund.
Subsection 50(3) states:
"For the purposes of the Income Tax Act, the amounts contributed by a judge pursuant to subsection (1) or (2) shall be deemed to be contributed to or under a registered pension plan".
Subsection 51(1) states:
"Where a judge has ceased to hold office otherwise than by reason of death and, at the time he ceased to hold office, no annuity under this Act was granted or could be granted to that judge, there shall thereupon be paid to the judge, in respect of his having ceased to hold that office, an amount equal to the total contributions made by him under subsection 50(1) or paragraph 50(2)(a), together with interest, if any, calculated pursuant to subsection (4)."
Subsection 147.3(9) of the Income Tax Act (the "Act") provides that where an amount is transferred in accordance with any of subsections (1) to (8) no taxpayer may take a deduction in respect of the amount transferred and the amount shall not, by reason only of that transfer, be included by reason of subparagraph 56(1)(a)(i) (i.e. amounts received as a pension benefit) in computing the income of any taxpayer.
Subsection 147.3(4) of the Act states
An amount is transferred from a registered pension plan in accordance with this subsection if the amount
a) is a single amount no portion of which relates to an actuarial surplus;
b) is transferred on behalf of a member in full or partial satisfaction of benefits to which the member is entitled, either absolutely or contingently, under a defined benefit provision of the plan as registered;
c) does not exceed a prescribed amount; and
d) is transferred directly to
(i) another registered pension plan and allocated to the member under a money purchase provision of that plan,
(ii) a registered retirement savings plan under which the member is the annuitant (within the meaning assigned by subsection 146(1)), or
(iii) a registered retirement income fund under which the member is the annuitant (within the meaning assigned by subsection 146.3(1)).
Therefore, a judge would generally be able to transfer all of the return of contributions together with interest directly to his or her RRSP on a tax-deferred basis pursuant to the provisions of the Judges Act and subsections 147.3(4) and (9) of the Act. [The "prescribed amount", which is the maximum amount which can be transferred pursuant to paragraph 147.3(4)(c) of the Act is defined in subsection 8517(2) of the Income Tax Regulations (the "Regulations"). It includes amounts contributed by the member to the registered pension plan and an amount of interest (computed at a reasonable rate of interest determined by the plan administrator) pursuant to subparagraphs 8503(1)(a)(i) and (v) of the Regulations. Therefore, in the situation under discussion the prescribed amount would generally not be a limiting factor.]
We trust our comments will be of assistance to you.
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings Directorate
Policy and Legislation Branch
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 2000
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 2000