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.
Peter K. Noack (613) 995-0051
July 22, 1986
This is in reply to your letter of June 20, 1986, concerning current service contributions to the B.C. Superannuation Fund in respect of years before 1986 that exceeded the $3,500 annual limit and were, therefore, not deductible from your income.
We confirm that The Honourable Michael Wilson, Minister of Finance, announced on November 21, 1985, that the $3,500 limit on employee contributions required to fund defined benefits in respect of service in 1986 under a registered pension plan will be eliminated. Draft legislation in the form of a Notice of Ways and Means Motion making such contributions fully deductible applicable in 1986 and subsequent taxation years was tabled in the House of Commons on June 11, 1986.
Regarding excess contributions made in previous years you make the following suggestions:
1. Reassessment of all returns for years in respect of which excess contributions have been made.
2. Exemptions of a proportionate amount of pension income.
3. Allowing the excess contributions as deductions from pension income.
Where current service contributions have been made by a taxpayer to a registered pension plan in excess of the amount deductible for the year, the excess may be deducted from the income of subsequent years subject to the annual limit of $3,500 minus any amounts deductible as current or past service contribution for the subsequent year. This means that you will be able to deduct your excess contributions from your pension income at the rate of $3,500 a year assuming you are not making any payments to another pension plan after retirement from your present employment.
The carry forward of pension contributions for deduction in a subsequent year is expressly permitted under subsection 8(8) of the Income Tax Act. There is no basis in law for the re-opening of prior years' returns to allow the full deduction of pre 1986 current service contributions in the year of payment.
Yours truly,
for Director Financial Industries Division Rulings Directorate Legislative and Intergovernmental Affairs Branch
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© His Majesty the King in Right of Canada, 1986
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© Sa Majesté le Roi du Chef du Canada, 1986
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