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 CCRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.
Principal Issues:
What is meant by the term "trusteed plan" as it is used in Interpretation Bulletin IT-399R2?
Position: General comments provided.
Reasons:
XXXXXXXXXX Shaun Harkin, CMA
2003-002456
September 19, 2003
Re: Technical Interpretation Request: Trusteed Plan
This is in reply to your letter of June 10, 2003 wherein you asked us what is meant by the term "trusteed plan" as it is used in Interpretation Bulletin IT-339R2, Meaning of "private health services plan".
In general terms, a trusteed plan is a plan established according to the terms of a trust agreement between the employer or plan sponsor and a trustee. The employer/sponsor is responsible for the contributions to the plan while the trustee is responsible for the administration of the plan.
Under a private health services plan that is a trusteed plan, the employer would contract with the trustee to indemnify its employees for costs associated with certain risks defined under the plan. The employer would promise to fund the cost of such claims plus pay a fee to the administrator. Normally, the employer would be obligated under the terms of the employees' contract of employment to cover the costs of claims made by the employees under the plan and the trustee would have an obligation to indemnify the employees for claims made under the plan.
The foregoing comments represent our general views with respect to the subject matter. As indicated in paragraph 22 of Information Circular 70-6R5, the above comments do not constitute an income tax ruling and accordingly are not binding on the Canada Customs and Revenue Agency. Our practice is to make this disclaimer in all instances in which we provide an opinion.
We trust the above comments are of assistance.
Yours truly,
Daryl Boychuk, LL.B
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
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