24 March 2015 Interpretation 141407
An employer (the "Company"), which is sponsoring more than one pension plan, establishes a unitized master trust to provide for the collective investment and reinvestment of the assets of various participant pension plans. The Company engages a trustee/custodian ("Trustee") to hold, invest, distribute and administer the master trust assets (the "Fund"). The interest in the Fund of a particular participant pension plan is measured in terms of the number of units in the master trust owned by the plan. The Trustee may make payments from the Funds as instructed by certain authorized parties including the Company and any other party authorized by the Company (such as investment managers). CRA stated:
…[A] trust is considered to be governed by a registered pension plan if the trust holds all the property of a pension plan and is governed by its own written terms (i.e., trust agreement). The trust must also be created exclusively to serve as the funding media for a particular registered pension plan and must be ruled by the wider terms of the particular registered pension plan that it serves.
…[I]t would appear that the Agreement provides the framework for the management, administration and investment of the Funds and ostensibly implies that the master trust is governed by the terms of the Agreement as opposed to any particular participating plan. In that case, the master trust would not be governed by any particular plan and would therefore not be a "pension entity"… . However, for the CRA to make a definitive decision…all relevant documents examined.