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 Issues:
Calculation of eligible amount of retiring allowance for transfer to RRSP.
Position TAKEN:
Description of 60(j.1) calculation.
Reasons FOR POSITION TAKEN:
Routine
XXXXXXXXXX 941529
July 6, 1994
Dear XXXXXXXXXX:
This is in reply to your letter of June 6, 1994, in which you ask us to state the amount of your separation payment which you can transfer to your registered retirement savings plan (RRSP).
Enclosed for your information is the 1993 RRSP and Other Registered Plans for Retirement Guide. At pages 39 and 40 of the Guide there is a general description of the deduction available for the transfer of the "eligible" part of a retiring allowance to an RRSP. For an individual who is entitled to pension plan benefits accruing from employer contributions for all the years of employment, the eligible amount is equal to $2000 times the number of years employed. A part year counts as a year so that, for example, if you started employment on August 1, 1968, and retired on April 30, 1994, the number of years employed will equal 27 years.
If no employer contributions were made to the pension plan in respect of all or some of the years of employment before 1989, an extra $1500 per year is eligible for the transfer to your RRSP. For example, if you started employment in 1968 but did not start to accrue benefits under the pension plan until August 1969, you may transfer an extra $1500 to your RRSP in respect of the 1968 year. The extra $1500 is not available for 1969 since employer contributions were made in respect of that year, albeit for only part of the year.
Although the foregoing comments are only an expression of opinion and are not binding on the Department, we trust they are helpful.
Yours truly,
for Director
Financial Industries Division
Rulings Directorate
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© Her Majesty the Queen in Right of Canada, 1994
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