9 November 1993 External T.I. 9329415 F - Years of Employment For Retiring Allowance Rollover

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.

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Attention:  XXXXXXXXXX

Dear Sirs:

RE:  Deduction Under Paragraph 60(j.1) of the Income Tax Act (the "Act")

This is in reply to your letter of October 7, 1993, in which you ask whether an individual may include prior years of employment in the calculation set out in clause 60(j.1)(ii)(A) of the Act.

In the example you use, an individual works for Employer X for 5 years, works for Employer Y for 3 years, and then returns to work for Employer X for another 10 years. The individual is not a member of a pension plan or deferred profit sharing plan.

Upon retirement or loss of employment, the amount of the retiring allowance paid by Employer X to the individual which is eligible for the tax-deferred transfer to the individual's registered retirement savings plan will be equal to $2000.00 times 15. Clause 60(j.1)(ii)(A) of the Act refers to the "number of years during which the employee was employed by the employer or a person related to the employer". Therefore, the service may be either continuous or discontinuous.

In your example, you described the two employers as school boards. Please note that such employers may be related and that the amount transferred pursuant to paragraph 60(j.1) of the Act may be based on the total years of employment by related employers. Whether employers are "related" within the meaning of the Act is a question of fact to be determined by the individual.

The foregoing comments are an expression of opinion only and are not binding on the Department. We trust, however, that they are helpful.

Yours truly,

for DirectorFinancial Industries DivisionRulings Directorate