4 January 1996 External T.I. 9530285 - RETIRING ALLOWANCE, OMERS, TERMINATION

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:

When is an individual entitled to the additional 1500/year under 60(j.1)(ii)(B)?

Position:

routine

Reasons:

routine response

		953028
XXXXXXXXXX	M.P. Sarazin

Attention: XXXXXXXXXX

January 4, 1996

Dear Sirs:

Re: Retiring Allowances

This is in reply to your letter dated September 25, 1995 and addressed to the Source Deductions Section of the Toronto Tax Services Office which was forwarded to us for our consideration. In your letter, you requested an advance income tax ruling with regards to the application of clause 60(j.1)(ii)(B) of the Income Tax Act. In a telephone conversation (XXXXXXXXXX/Duff) on December 19, 1995, you were advised that advance income tax rulings are not issued with respect to completed transactions. However, we can provide you with the following general comments.

Comments

The part of a retiring allowance that is eligible for transfer to a registered retirement savings plan is the sum of

(a) $2,000 times the number of calendar years before 1996 during which the employee was employed by the employer paying the retiring allowance, or an employer related to the employer (clause 60(j.1)(ii)(A) of the Act and proposed amendments announced February 27, 1995); and

(b) $1,500 times the number of years described in (a) that are before 1989 for which employer contributions to a pension plan or deferred profit sharing plan of the employer or an employer related to the employer did not vest in the employee at the time the retiring allowance is paid (clause 60(j.1)(ii)(B) of the Act).

Where an employee elects to receive his or her contributions with interest thereon for a period prior to 1989 and the election results in a loss of any pension entitlements for the period, the employee would be entitled to the additional $1,500 per year under clause 60(j.1)(ii)(B) of the Act.

We trust the above comments will be of assistance to you.

Yours truly,

for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch