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.
PRINCIPAL ISSUE:
Amount transferable to an RRSP for a former employee who has purchased pre-1989 service for PSSA purposes.
Position TAKEN:
Limited to $2,000 per year of service.
Reasons FOR POSITION TAKEN:
When past service is purchased, the employer's contributions are considered to have been paid by the employee and thus vested.
National Defence
National Defence Headquarters
Ottawa, Ontario 5-941321
K1A 0K2 M. SheaDesRosiers
Attention: Linda Roos
Civilian Personnel Office
(Administration)
June 15, 1994
Dear Madam/Sir:
Re: Transfer of Severance pay to a
Registered Retirement Savings Plan ("RRSP")
This is in reply to your facsimile of May 19, 1994 concerning the above-mentioned subject and further to our telephone conversation (Ross/Shea-DesRosiers) of June 14, 1994.
We will answer your questions in the order they were asked.
For an individual who was re-hired by the Government and elected to purchase pre-1989 service for PSSA purposes, the amount that can be transferred to an RRSP is limited to $2,000 per year of service prior to 1989. The amount of $3,500 applies only if the individual chose not to buy-back pre-1989 service.
In our telephone conversation of June 14, 1994, you advised that Treasury Board is the employer of both the military employees and those who are in the Reserves. Therefore, the years of service in the Reserves for an ex-military employee would be recognized when calculating the amount transferable tax free to an RRSP since the employer is the same.
The fact that an ex-employee did not transfer a return of pension plan contributions to an RRSP does not in itself influence the calculation of the annual limit of $3,500 or $2,000.
We trust the above comments will be of assistance to you.
Yours truly,
for Director
Financial Industries Division
Rulings Directorate
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