Section 147.3

Subsection 147.3(4) - Transfer — defined benefit to money purchase, RRSP or RRIF

Cases

Canada v. Yudelson, 2010 DTC 5040 [at at 6674], 2010 FCA 44

The taxpayer's defined benefit registered pension plan had a value of $680,900. Under the terms of the plan, the taxpayer could have purchased an indexed annuity contract, but did not. Instead he used $571,770 to purchase fixed annuity benefits of $52,934 per year and, after receiving the first such payment, transferred the remaining amount of $108,886 into his RRSP to fund indexation payments.

The transfer of the remaining amount exceeded the prescribed amount. While the Plan included savings to fund future benefits tied to the cost of living, at the time of this transfer no benefits were payable beyond the base amounts. Accordingly, the "prescribed amount" - the value of the foregone life retirement benefits - for the year of the transfer was nil, so that the amount of the $108,886 transfer was includible in his income.

Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Regulation 8517 136

Administrative Policy

1 May 1995 Internal T.I. 9502906 - 50% FUNDING RULE AND EXCESS RPP CONTRIBUTIONS

Where a member's pension benefits are increased pursuant to the "50/50" rule (which provides that where the member's contributions, plus earnings thereon, exceed 50% of the pension benefit credit relating to the same period, the member's pension benefits shall be increased), such adjustments represents a "benefit" which can be transferred under s. 147.3(4), rather than qualifying for treatment as a return of contributions under s. 147.3(6).

Subsection 147.3(5) - Transfer to RPP, RRSP or RRIF for spouse on marriage breakdown

Administrative Policy

11 April 1991 T.I. (Tax Window, No. 2, p. 27, ¶1195)

S.147.3(5) permits the transfer of benefits under a registered pension plan of the member spouse to a locked-in RRSP of the non-member spouse provided that the transfer is made directly and the amount is transferred pursuant to a court order or written agreement relating to a division of property and marriage breakdown.

Subsection 147.3(7)

Administrative Policy

19 December 2000 External T.I. 2000-0035685 F - RPA TRANSFER AU DECES

deceased member can have had more than one qualifying spouse or partner

Regarding the transfer of an amount to a spouse or common-law partner or former spouse or common-law partner with whom the taxpayer was living at the time of death, CCRA stated:

[A] deceased taxpayer, at the time of death, may have two common-law spouses (including a former common-law spouse), as well as a legal spouse for the purposes of subsection 147.3(7). However, it should be noted that for the former common-law partner and the common-law partner to be considered a “spouse” or “former spouse” of the taxpayer, they must have been so, at a given time, after 1992, as required under the conditions of subsection 252(4).