16 March 1993 Income Tax Severed Letter 9301745 - Retiring Allowance

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.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Canadian Security Intelligence
 Service
Personnel Services Branch                  5-930174
Compensation and Benefits SECTION        Robert Gagnon
P.O. Box 9732, Station T                   (613) 957-8953
Ottawa, Ontario
K1G 4G4

Attention: S. Bowman

March 16, 1993

Dear Sirs:

Re: Retiring allowance

This is in reply to your letter of January 14, 1993 wherein you requested our interpretation concerning the transfer of retiring allowances to registered retirement savings plans (RRSP).

The amount of a retiring allowance that a taxpayer can transfer to a RRSP under the Income Tax Act (the Act) is limited to $2,000 for each calendar year or part-year in which he was employed (part time or full time employment) by the employer or a person related to the employer from whom he received the retiring allowance and an extra $1,500 for each calendar year or part-year that is before 1989 in which no part of his employer's contributions to a registered pension plan or a deferred profit-sharing plan has vested in his name at the time the retiring allowance is paid. However, this amount is reduced by retiring allowances previously received by the taxpayer from the employer or a person related to the employer and transferred to a RRSP.

It is our view that gaps in an employee's work history with a specific employer would not disqualify prior years from being included in the computation of years of employment.

Since the Federal Government controls the Armed Forces (includes the Militia) and the Canadian Security Intelligence Service, these are considered to be the same employer for the purposes of the Act.

The foregoing opinions are not rulings and, in accordance with the guidelines set out in Information Circular 70-6R2 dated September 28, 1990, are not binding on the Department.

We trust our comments will be of assistance to you.

Yours truly,

for Director Financial Industries Division Rulings Directorate