Income Tax Regulations

• 8308 (1) For the purposes of this Part and subsection 147.1(10) of the Act, benefits that became provided under a defined benefit provision of a pension plan before the day as of which the plan becomes a registered pension plan shall be deemed to have become provided as a consequence of an event occurring on that day and not to have been provided before that day.

Prescribed Amount for Connected Persons

• (2) Where

  • (a) at any particular time in a calendar year after 1990,

    • (i) an individual becomes a member of a registered pension plan, or

    • (ii) lifetime retirement benefits commence to accrue to the individual under a defined benefit provision of a registered pension plan following a period in which lifetime retirement benefits did not accrue to the individual,

  • (b) the individual is connected at the particular time, or was connected at any time after 1989, with an employer who participates in the plan for the benefit of the individual,

  • (c) the individual did not have a pension adjustment for 1990 that was greater than nil, and

  • (d) this subsection did not apply before the particular time to prescribe an amount with respect to the individual,

  an amount equal to the lesser of $11,500 and 18% of the individual’s earned income (as defined in subsection 146(1) of the Act) for 1990 is prescribed with respect to the individual for the calendar year that includes the particular time for the purposes of the descriptions of B in the definitions RRSP deduction limit and unused RRSP deduction room in subsection 146(1) of the Act and the description of B in paragraph 204.2(1.1)(b) of the Act.

Remuneration for Prior Years

• (3) Where an individual who is entitled to benefits under a defined benefit provision of a registered pension plan receives remuneration at a particular time in a particular calendar year no part of which is pensionable service of the individual under the provision and the remuneration is treated for the purpose of determining benefits under the provision as if it were remuneration received in one or more calendar years preceding the particular calendar year for services rendered in those preceding years, the following rules apply:

  • (a) such portion of the remuneration as is treated under the provision as if it were remuneration received in a preceding calendar year for services rendered in that preceding year shall be deemed, for the purpose of determining, as of the particular time and any subsequent time, a redetermined benefit entitlement of the individual under the provision, to have been received in that preceding year for services rendered in that preceding year; and

  • (b) the pension credit of the individual for the particular year under the provision with respect to an employer is the aggregate of

    • (i) the amount that would otherwise be the individual’s pension credit for the particular year, and

    • (ii) the amount that would, if the payment of the remuneration were a past service event, be the provisional PSPA (or a reasonable estimate thereof determined in a manner acceptable to the Minister) of the individual with respect to the employer that is associated with the payment of the remuneration.

Period of Reduced Services — Retroactive Benefits

• (4) Where,

  • (a) as a consequence of a past service event, retirement benefits (in this subsection referred to as “retroactive benefits”) become provided under a defined benefit provision of a registered pension plan (other than a plan that is a specified multi-employer plan) to an individual in respect of a period of reduced services of the individual,

  • (b) the period of reduced services was not, before the past service event, pensionable service of the individual under the provision, and

  • (c) the past service event occurs on or before April 30 of the year immediately following the calendar year in which ends the complete period of reduced services of the individual that includes the period of reduced services,

  the following rules apply:

  • (d) each pension adjustment of the individual with respect to an employer for a year before the calendar year in which the past service event occurs shall be deemed to be, and to always have been, the aggregate of

    • (i) the amount that would otherwise be the individual’s pension adjustment with respect to the employer for the year, and

    • (ii) such portion of the provisional PSPA of the individual with respect to the employer that is associated with the past service event as may reasonably be considered to be attributable to the provision of retroactive benefits in respect of the year, and

  • (e) each provisional PSPA of the individual with respect to an employer that is associated with the past service event shall be deemed (except for the purposes of this subsection) to be such portion of the amount that would otherwise be the individual’s provisional PSPA as may reasonably be considered not to be attributable to the provision of retroactive benefits.

COVID-19 — Retroactive Benefits

• (4.1) Paragraph (4)(c), in its application to a complete period of reduced services that ended in 2019, is to be read as follows:

  • (c) the past service event occurs on or before June 1, 2020 or such later date as is acceptable to the Minister,

Period of Reduced Services — Retroactive Contributions

• (5) Where

  • (a) a contribution (in this subsection referred to as a “retroactive contribution”) is made by an individual, or by an employer with respect to the individual, under a money purchase provision of a registered pension plan in respect of a period in a particular calendar year that is a period of reduced services of the individual, and

  • (b) the retroactive contribution is made after the particular year and on or before April 30 of the year immediately following the calendar year in which ends the complete period of reduced services of the individual that includes the period of reduced services,

  the following rules apply:

  • (c) each pension adjustment of the individual for the particular year with respect to an employer shall be deemed to be, and to always have been, the amount that it would have been had the retroactive contribution been made at the end of the particular year, and

  • (d) the retroactive contribution shall be deemed, for the purpose of determining pension adjustments of the individual for any year after the particular year, to have been made at the end of the particular year and not to have been made at any subsequent time.

COVID-19 — Retroactive Contributions

• (5.1) Paragraph (5)(b), in its application to a complete period of reduced services that ended in 2019, is to be read as follows:

  • (b) the retroactive contribution is made after 2019 and on or before June 1, 2020 or such later date as is acceptable to the Minister,

Conditions — Retroactive Contributions

• (5.2) Subsection (5.3) applies in respect of a contribution made with respect to an individual under a money purchase provision of a registered pension plan (in this subsection and in subsection (5.3) referred to as a “retroactive contribution”), if

  • (a) in the case of a contribution payable by an individual,

    • (i) the individual makes the retroactive contribution after 2020 and on or before April 30, 2022, or

    • (ii) the individual makes a written commitment, on or before April 30, 2022, to the plan administrator, or to a participating employer of the plan, to make the retroactive contribution;

  • (b) in the case of a contribution payable by a participating employer,

    • (i) the employer makes the retroactive contribution after 2020 and on or before April 30, 2022, or

    • (ii) it is conditional on the individual making the retroactive contribution that the individual has committed to pay under subparagraph (a)(ii); and

  • (c) the retroactive contribution replaces, in whole or in part, a contribution that would have been required to be made to the plan in the calendar year 2020 or 2021 but for an amendment made to the plan under sections 8511 and 8512 that reduced the contributions required to be made.

COVID-19 — Retroactive Contributions

• (5.3) If this subsection applies in respect of a retroactive contribution,

  • (a) each pension adjustment of the individual for the 2020 or 2021 calendar year with respect to an employer is deemed to be, and to always have been, the amount that it would have been had the retroactive contribution been made at the end of 2020 or 2021, as the case may be; and

  • (b) the retroactive contribution is deemed, for the purpose of determining pension adjustments of the individual for any calendar year after the year referred to in paragraph (5.2)(c), to have been made at the end of that year and not to have been made at any subsequent time.

Conditions – Permitted Corrective Contribution

• (5.4) If the individual makes a written commitment to the administrator of the plan or to an employer who participates in the plan to make a permitted corrective contribution in accordance with subsection 147.1(20) of the Act in installments, amounts payable by the individual or the employer in respect of the contribution are deemed for the purposes of subsection 8402(4) and the definition net past service pension adjustment in subsection 146(1) of the Act to have been made at the time when the written commitment was made.

Commitment to Make Retroactive Contributions

• (6) Where

  • (a) an individual enters into a written commitment to make a contribution under a money purchase provision of a registered pension plan,

  • (b) the commitment is made to the administrator of the plan or to an employer who participates in the plan, and

  • (c) the rules in subsection (5) would apply in respect of the contribution if the contribution were made at the time at which the individual enters into the commitment,

  the following rules apply for the purposes of this Part:

  • (d) the individual shall be deemed to have made the contribution to the plan at the time the individual enters into the commitment,

  • (e) if the individual subsequently pays all or a part of the contribution to the plan pursuant to the commitment, the amount paid to the plan is, for the purposes of paragraphs 8301(4)(a) and (8)(e), a contribution described in this paragraph,

  • (f) any contribution that an employer is required to make under the money purchase provision conditional on the individual making the contribution that the individual has committed to pay and in respect of which subsection (5) would apply if the contribution were made by the employer at the time the individual enters into the commitment shall be deemed to have been made by the employer at that time, and

  • (g) if an employer subsequently pays to the plan all or a part of a contribution in respect of which paragraph (f) applies, the amount paid to the plan is, for the purposes of paragraph 8301(4)(a), a contribution described in this paragraph.

Loaned Employees

• (7) Where, pursuant to an arrangement between an employer (in this subsection referred to as the “lending employer”) who is a participating employer in relation to a pension plan and an employer (in this subsection referred to as the “borrowing employer”) who, but for this subsection, would not be a participating employer in relation to the plan,

  • (a) an employee of the lending employer renders services to the borrowing employer for which the employee receives remuneration from the borrowing employer, and

  • (b) while the employee renders services to the borrowing employer, benefits continue to accrue under a defined benefit provision of the plan to the employee, or the lending employer continues to make contributions under a money purchase provision of the plan with respect to the employee,

  the following rules apply:

  • (c) for the purpose of the definition participating employer in subsection 147.1(1) of the Act as it applies in respect of the plan, the borrowing employer is a prescribed employer,

  • (d) the determination, for the purposes of this Part, of the portion of the employee’s benefit accrual under a defined benefit provision of the plan in respect of a year that can reasonably be considered to be attributable to the employee’s employment with each of the lending and borrowing employers shall be made with regard to the remuneration received by the employee for the year from each employer, and

  • (e) such portion of the contributions made under a money purchase provision of the plan by the lending employer as may reasonably be considered to be in respect of the employee’s remuneration from the borrowing employer shall be deemed, for the purposes of this Part, to be contributions made by the borrowing employer.

Successor Plans

• (8) Notwithstanding any other provisions of this Part, other than section 8310, where

  • (a) all benefits with respect to an individual under a defined benefit provision (in this subsection referred to as the “former provision”) of a registered pension plan are replaced in a calendar year by identical benefits under a defined benefit provision of another registered pension plan,

  • (b) the replacement of benefits is consequent on a transfer of the individual’s employment from one employer (in this subsection referred to as the “former employer”) to another employer (in this subsection referred to as the “successor employer”), and

  • (c) the Minister consents in writing to the application of this subsection in respect of that replacement of benefits,

  the individual’s pension adjustments for the year with respect to the former employer and the successor employer shall be the amounts that they would be if all benefits with respect to the individual under the former provision had been attributable to employment with the successor employer and not to employment with the former employer.

Special Downsizing Benefits

• (9) Where

  • (a) lifetime retirement benefits that do not comply with the condition in paragraph 8503(3)(a) are provided to an individual under a defined benefit provision of a registered pension plan, and

  • (b) the benefits are permissible only by reason of subsection 8505(3),

  each pension credit of the individual under the provision and each provisional PSPA of the individual shall be determined without regard to the lifetime retirement benefits.