20 July 1998 External T.I. E9814335 - RELATED EMPLOYERS

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:

For the purposes of paragraph 60(j.1) of the Act, does subparagraph 60(j.1)(v) include as a "related employer" any previous employer of an employee that contributed to the same multi-employer pension as the current employer?

Position:

Yes.

Reasons:

Service with a prior employer is recognized in determining the retiree's pension benefits payable, in part, as a consequence of service with the current employer.

XXXXXXXXXX 				981433
W. C. Harding

Attention:  XXXXXXXXXX 

July 20, 1998

Dear Sirs:

Re: Related Employer

This is in reply to your letter of May 25, 1998, in which you requested confirmation of the application of subparagraph 60(j.1)(v) of the Income Tax Act (the "Act") with respect to service credited to a retiree under a multi-employer pension plan.

We confirm that a "person related to the employer" as that term is used in subparagraph 60(j.1)(ii) of the Act, includes any previous employers of a retiree whose service therewith is recognized in determining the retiree's pension benefits under a multi-employer pension plan in which both the current and prior employers have participated. We further note that, as explained in paragraph 13 of Interpretation Bulletin IT-337R3, Retiring Allowances, where any part of the years of service with a former employer is recognized in computing the retiree's pension benefits, then all of the years of service with that former employer can be included in the calculation of the limit under subparagraph 60(j.1)(ii) of the Act on the amount deductible under paragraph 60(j.1) of the Act.

We trust these comments will be of assistance.

Yours truly,

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