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.
24(1) 5-920509
D.S. Delorey
(613) 957-8953
Attention: 19(1)
March 31, 1992
Dear Sirs:
This is in reply to your letter of February 17, 1992, concerning subparagraph 8503(2)(a)(iii) of the Income Tax Regulations (the "Regulations").
More particularly, your concern relates to the following wording contained in subparagraph 8503(2)(a)(iii):
"......the plan provides for cost of living adjustments to be made to the benefits from time to time at the discretion of any person......"
You mention that in the past, it has been the practice of certain plan administrators to simply record resolutions pertaining to "ad hoc"
increases in the minutes of the Board of Trustee meetings. You ask if the above-quoted wording means that decisions by plan administrators to make ad hoc cost-of-living adjustments to reflect increases in the Consumer Price Index must now be implemented through an amendment to the plan text.
Provided the plan documentation allows for such adjustments, ad hoc increases may continue to be implemented through decisions of the Board.
We trust our comments are of assistance.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate
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