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.
5-910217
Dear Mr. Kerwin:
This is further to your telephone conversation with Mr. R.J.L. Read on January11, 1991 concerning the maximum pension allowable under a registered pension plan.
As explained in the first part of page 15 of the enclosed Information Circular 72-13R8, one of the requirements for registration of a pension plan is that the plan cannot provide for pension in excess of $1,715 times the number of years of pensionable service to a maximum of 35 years. This computation provides for a maximum yearly pension of approximately $60,000.
Draft amendments to the Income Tax Regulations proposed by the Department of Finance will have the effect of increasing the above maximum with respect to new plans registered after June 27, 1990, or existing plans amended before January l, 1992 to conform to the proposed rules. Generally speaking, the proposed rules provide for a maximum pension of $l,722.22 for each year of pensionable service without any limit on the number of years of pensionable service. The $l,722.22 amount will remain constant for years before 1995 after which time it will be indexed to reflect increases in the average industrial wage. For example, if an individual retired in 1994 with 40 years of pensionable service and the relevant plan conforms to the new rules, the maximum pension that he could receive would be $68,888.80 (i.e., $l,722.22 x 40).
We trust that our comments are of assistance. Should you require more detailed information on the present or proposed rules for registration of a pension plan, we suggest that you contact the Registrations Division at the following address:
Room 4004A 400 Cumberland Street Ottawa, Ontario K1A OL8
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate
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© His Majesty the King in Right of Canada, 1991
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© Sa Majesté le Roi du Chef du Canada, 1991
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