17 June 1993 Income Tax Severed Letter 9313765 - Return of Pension Plan Contributions

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.

                                             931376
XXXXXXXXXX                                   P. Spice
                                             (613) 957-8953
June 17, 1993

Dear XXXXXXXXXX:

Re: Return of Pension Plan Contributions

This is in reply to your letter of May 5, 1993, to Mr. John Oulton which was forwarded to us for a response. You ask whether certain amounts being returned to you from your pension plan may be transferred tax free to your registered retirement savings plan (RRSP). As you explain, part of your pension contributions were based on bonus payments and it has now been discovered that the bonus payments did not qualify for pension purposes. The employer intends to return these over-contributions to you for the taxation years 1986 through 1991. You have received conflicting advice concerning the tax consequences from the district taxation office and from your employer.

A lump sum payment from a registered pension plan which represents a return of pre-1991 contributions may be directly transferred by your pension plan administrator to your RRSP pursuant to subsection 147.3(6) of the Income Tax Act. The amount will not be included in your income and you will not be permitted a deduction for the contribution to your RRSP. Form T2151 (Record of direct transfer of a "single amount") may be used to record the transfer.

The foregoing comments are an expression of opinion only and are not binding on the Department, although we hope they assist.

Yours truly,

for Director Financial Industries Division Rulings Directorate