10 June 1993 Income Tax Severed Letter 9313365 - Transfer from RPP to RRSP

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. Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

                                                   5-931336
XXXXXXXXXX                                         D. S. Delorey
                                                   (613) 957-8953

Attention: XXXXXXXXXX

June 10, 1993

Dear Sir/Madam:

This is in reply to your letter of May 5, 1993 concerning the transfer of funds from a defined benefit registered pension plan ("RPP") to a registered retirement savings plan ("RRSP") under subsection 147.3(4) of the Income Tax Act (the "ITA").

We note that your enquiry concerns an amount that would be refundable to a teacher pursuant to certain clauses of a specific RPP, and you ask for a ruling on whether or not such a refund could be transferred to an RRSP under subsection 147.3(4) of the Act. An advance income tax ruling on the tax implications inherent in a proposed transaction is given by this Directorate only where the proposed transaction is the subject matter of an advance ruling request submitted in the manner set out in Information Circular 70-6R2. We offer, however, the following general comments.

An amount is transferable from an RPP to an RRSP under subsection 147.3(4) of the Act only where it is transferred on behalf of a member in full or partial satisfaction of the member's entitlement to benefits under a defined benefit provision of the RPP as registered, and does not exceed an amount prescribed in subsection 8517(1) of the Income Tax Regulations. In the type of situation you are concerned with, the amount refundable relates solely to excess contributions to the RPP where the same years of service are acquired under two different provisions of the RPP. That is, there would appear to be no reduction in the individual's lifetime retirement benefits under the RPP where the amount is refunded and, accordingly, the amount would not be transferable under subsection 147.3(4) of the Act.

We trust our comments are of assistance.

Yours truly,

for Director Financial Industries Division Rulings Directorate