31 May 2001 Internal T.I. 2001-0081257 - RETROACTIVE REGISTRATION OF A PENSION 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: Does subsection 220(2.1) provide the Minister with discretion to allow retroactive registration of a pension plan as provided for in subsection 147.1(2)?

Position: No.

Reasons: Subsection 147.1(2) states that a plan may not be registered prior to January 1st of the year in which application is made.

			May 31, 2001
	HEADQUARTERS	HEADQUARTERS
	Registered Plans Directorate	Income Tax Rulings
	Technical Services Division	  Directorate
S. E. Thomson
	Attention:  Mike Godwin, Manager
			2001-008125

Retroactive registration of a pension plan

We are responding to your email of April 24, 2001 in which you ask if, in our opinion, subsection 220(2.1) of the Income Tax Act (the "Act") provides discretion to the Minister to register a pension plan with an effective date prior to the dates provided for in subsection 147.1(2).

You have a situation where the plan has been in existence since 1995, but no application for registration has been made until now. The plan administrator quotes a court case, Alex Parallel Computers Research Inc. v. The Queen (99 DTC 5283), which they say provides the Minister with the ability to waive the requirement to file the plan text and prescribed forms, and register the plan with an effective date of 1995.

Paragraph 147.1(2)(c) of the Act provides that where a pension plan that is submitted for registration after 1991 is registered by the Minister, the registration is effective from the later of

(i) January 1 of the calendar year in which application for registration is made in prescribed manner by the plan administrator, and

(ii) the day the plan began.

Subsection 220(2.1) provides the Minister with the ability to waive the requirement where the Act or a regulation requires a person to file a prescribed form, receipt or other document, or to provide prescribed information.

In our opinion, paragraph 147.1(2)(c) of the Act leaves no room for discretion. That is, the registration cannot be effective earlier than January 1 of the year in which an application is made. Whether the filing of some or all of the prescribed forms, documents or information may then be waived under subsection 220(2.1) does not override the strict requirements in paragraph 147.1(2)(c).

We find that the Alex Parallel case is not supportive of the plan administrator's position. The judge in that case held that the Minister could not use internal policies as an excuse to refuse to exercise his discretion under subsection 220(2.1) of the Act. In the current case, however, our view is that the legislation itself prevents the Minister from exercising his discretion.

As a further comment, subsection 220(2.01) of the Act allows the Minister to delegate his powers and duties, which he has done by means of a schedule. We note that according to the schedule, powers under subsection 220(2.1) have not been delegated to anyone in Registered Plans Directorate. Accordingly, the schedule would have to be amended before RPD could, in any event, exercise discretion under this subsection.

We trust that our comments have been helpful.

Roberta Albert, C.A.

for Director
Financial Industries Division
Income Tax Rulings Directorate