9 March 2007 External T.I. 2006-0212781E5 - Employer's contributions to a RPP

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.

Principal Issues: Are benefits derived from employer's contribution to a multiple employer pension plan included in income from an office or employment under paragraph 6(1)(a)?

Position: No, if the contributions are payments made by the employer, as required by the terms of the plan and the plan constitute a "registered pension plan" as defined in subsection 248(1).

Reasons: Subparagraph 6(1)(a)(i) excludes such contributions.

XXXXXXXXXX 						006-021278
A. St-Amour, CA
March 9, 2007

Dear XXXXXXXXXX:

Re: Employer's contributions to a multiple employer pension plan

This is in response to your letter of October 26, 2006, in which you asked us to confirm that benefits derived from employer's contributions to a multiple employer pension plan are not included in income from office or employment under paragraph 6(1)(a) of the Income Tax Act (the "Act").

Unless otherwise stated, all references to a statute are to the Act.

The subject matter of your letter appears to pertain to a particular situation. Written confirmation of the tax implications inherent in particular transactions are given by this Directorate only where the transactions are proposed and are the subject matter of an advance income tax ruling request submitted in the manner set out in Information Circular 70-6R5, Advanced Income Tax Rulings, dated May 17, 2002. Where the particular transactions are completed, any inquiries should be addressed to the relevant tax services office. However, we are prepared to provide the following comments that may be of assistance to you. Please note that these comments are general in nature, may not apply in a particular situation and are not binding on the Canada Revenue Agency ("CRA").

Subject to certain exemptions, paragraph 6(1)(a) includes in a taxpayer's income the "value of board, lodging and other benefits of any kind whatever received or enjoyed by the taxpayer in the year in respect of, in the course of, or by virtue of an office or employment".

Subparagraph 6(1)(a)(i) however, specifically excludes benefits derived from the contributions of the taxpayer's employer to or under a registered pension plan. It is our view that this subparagraph would apply to employer's contributions to a multiple employer pension plan if such plan is a "registered pension plan" as defined in subsection 248(1) as a pension plan that has been registered by the Minister for the purposes of the Act, which registration has not been revoked.

It is a question of fact whether or not a payment in any particular situation is a payment by the employer or, instead, a payment by the employer on behalf of the employee or a payment by the employer at the employee's direction and this may only be determined from an analysis of the terms of the arrangement in question. However, in our opinion, if the employer is required by the terms of a plan to make particular contributions such contributions generally would be considered employer's contributions.

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 CRA.

Yours truly,

Ghislain Martineau
Section Manager
Section du secteur financier et des entités exonérées
Financial Sector and Exempt Entities Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch