11 July 1989 Administrative Letter 57856 F - Transferability of Annuity Payments to RRSP

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.

July 11, 1989

19(1)

This is in reply to your letter of April 4, 1989 and in confirmation of our telephone conversation of June 22, 1989 19(1) Harding) concerning the transferability of your 24(1) .

In accordance with our information your annuity was issued under the provisions of the 24(1) pension plan, applicable at the time, which was an "approved plan" under the provisions of the 1948 Income Tax Act.  This plan was later merged into and replaced by subsequent plans which became "registered pension plans" as defined under the provisions of the current Income Tax Act (the "Act").  Accordingly, by virtue of subsection 17(8) of the 1971 Income Tax Application Rules, the approved plan will be accorded the same treatment as if it had been a registered plan since the date of its original approval.  Payments out of the annuity will therefore be transferable to an RRSP under the provisions of paragraph 60(j) of the Act as it now reads.

Through discussions with the Annuities Branch of Labour Canada, P.O. Box 12000, Bathurst, New Brunswick, E2A 4T6 (Nora Leblanc) it is the Department's understanding that the Annuities Branch should have, by this date, provided you with the necessary forms to effect the transfer.  If you have not received these forms, we suggest that you contact them at the above noted address at your earliest convenience.

We would also like to advise that certain pension reform legislation has been dropped which, when passed, may effect the transfer of your annuity.  In particular it is proposed that:

a.     lump sum transfers, such as upon commutation of a pension annuity, may only be transferred on a direct plan basis after January 1, 1989 and

b.     periodic payments, such as monthly annuity benefits will not be transferable after 1989 except for a transfer of up to $6000 to a spousal RRSP made during the years 1989 through 1994.

We trust that these comments are satisfactory to you.

Yours truly,

Wayne Douglasfor DirectorFinancial Industries DivisionRulings Directorate