10 April 1992 Administrative Letter 9206576 F - Employee Profit Sharing Plan - Forfeitures

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.

April 10, 1992

Registered Plans Division Financial Industries

S. M. Kotlar, Director Division

Attention:  Geoff Turrell

Employee Profit Sharing Plan

24(1)           

This is in reply to your memorandum of February 27, 1992, asking us to reply to a letter from 24(1) addressed to your Division.

The content of  24(1) letter indicates that they are aware of, and have accepted, the interpretation that this Division gives to paragraph 144(1)(d) of the Act; i. e., forfeitures must be allocated to plan members and cannot be used to reduce the required employer contributions.  The issue is thus not one of interpretation; rather,  24(1) is seeking clarification of comments made in  a letter from your Division to them dated February 14, 1989 concerning what you consider to be acceptable administrative procedures with respect to the   24(1) plan.  In this regard, they ask "that the employer    24(1)       be permitted to continue to administer the Plan as it was originally drafted and approved." Accordingly, it would be more appropriate in our view for your Division to reply to     24(1)           letter and we are therefore returning the documentation sent to us with your memorandum and ask that you reply to the letter.

for DirectorFinancial Industries DivisionRulings Directorate