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.
XXXX S. Farber (613) 393-7295
November 4, 1982.
Dear Sirs:
This is in reply to your letter of September 22, 1982 concerning the maximum eligibility for contributions to a Registered Retire- ment Savings Plan (RRSP) by your employees.
XXXX
You wish to know the maximum amount employees can contribute to a RRSP if they elect to contribute to the voluntary portion of the pension plan or if they waive their right to contribute.
Paragraph 146(5)(a) of the Income Tax Act (the Act) sets the maximum amount that may be deducted by an employee in respect of contributions made by him to an RRSP under certain circumstances to the lesser of $3,500 and 20% of earned income minus his deductible contributions to a registered pension plan. This paragraph of the Act applies where an employer made or will make contributions to a pension plan in the year in respect of the employee's employment in that year if there is any possibility that these contributions will vest in the employee. It is our view that when the employer makes contributions under the basic portion of the plan in question, the employee "was a person who is or may become entitled to benefits" within the meaning of paragraph 146(5)(a) of the Act.
Accordingly, based on the limited information submitted, your employees would be subject to the maximum limitations imposed by paragraph 146(5)(a) of the Act as set out above whether they contribute to the voluntary portion of the plan or not. If your plan is a "registered pension plan" within the meaning of subsection 248(1) of the Act, the voluntary contributions made by an employee to the plan that are deductible from income pursuant to paragraph 8(1)(m) of the Act, are subtracted from his maximum deductible contribution to an RRSP.
We trust this information will be of assistance to you.
Yours truly,
for Director Non-Corporate Rulings Division
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© Her Majesty the Queen in Right of Canada, 1982
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© Sa Majesté la Reine du Chef du Canada, 1982
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