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:
Amount transferable to an RRSP for a former employee who has not purchased pre-1989 service for PSSA purposes.
Position TAKEN:
$3,500 per year of service
Reasons FOR POSITION TAKEN:
Employer's contributions not vested.
Director Personnel Relations
Policy and Compensation
Department of National Defence 5-941550
12th Floor, Berger Building M. Shea- DesRosiers
100 Metcalfe Street
Ottawa, Ontario
K1A 0K2
Attention: T.W. McCready
June 29, 1994
Dear Sir:
Re: Your reference 6008-00 (DPRPC 5-5) May 11, 1994
Our file 5-941291
Transfer of retiring allowance to a
Registered Retirement Savings Plan ("RRSP")
This is in reply to your letter of June 8, 1994 concerning the abovementioned subject.
We will answer your questions in the order they were asked.
For an ex-military employee who had received a return of pension contributions upon retirement but was later re-hired by the Government as a civilian and elected not to purchase pre-1989 service for the purposes of the Public Service Superannuation Act ("PSSA"), the amount that can be transferred to an RRSP is $3,500 per year of service prior to 1989.
Since we were advised that Treasury Board is the employer of both the military employees and those who are in the Reserves, 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-military 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.
As for your question pertaining to "vesting", we confirm your understanding that vesting occurs when the employee acquires an irrevocable right to the employer's contributions under a pension plan as well as your interpretation of when vesting occurs under the provisions of the PSSA.
We trust the above comments will be of assistance to you.
Yours truly,
for Director
Financial Industries Division
Rulings Directorate
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