Comments on: Understanding The Pension Adjustment (PA)?

By: Tax Guy

Tax Guy — Thu, 19 Jan 2012 17:48:16 +0000

Your employer likely computed the amount on your employment income. The limit is 18% of earned income.

By: Linda

Linda — Thu, 19 Jan 2012 16:39:19 +0000

I was on maternity leave in Quebec and I contributed to my DC plan while on maternity. Now my employer says that I over contributed since I can only contribute up to 18% of my earnings. How did they calculate my 18% earnings, would it be only the earnings from my employer or is it 18% of all my earnings (including money received from the QC gvt for Maternity leave and for parental leave)?

By: Tax Guy

Tax Guy — Sat, 09 Apr 2011 11:19:12 +0000

The amount is a transfer from one registered plan to another. There is no contribution receipt. If the plan was over funded, you could have received a taxable portion that would be put in your RRSP. That would have had a contribution receipt.

By: Theresa

Theresa — Fri, 08 Apr 2011 17:16:19 +0000

In 2010 I left the company I was employed with. I held a DB Pension plan with them. My company said provided I had RRSP contribution room that I could transfer some of the monies from my DB Pension into an RRSP. I subsequently opened an RRSP and transferred these monies. My question is this, should I receive a contribution receipt for this contribution made to my individual RRSP from my DB Pension? If not, why did it matter if I had “contribution room” available if I am not going to be receipted for the amount?

Thanks,

By: Tax Guy

Tax Guy — Fri, 08 Apr 2011 12:57:13 +0000

If you’re not a resident of Canada, you’re not liable for Canadian income tax on worldwide income. Therefore, you have no earned income and are not generating RRSP contribution room.

I’m not 100% clear on the registered pension plan rules in your particular case, and I’m not certain that you even be able to contribute to a registered pension plan.

By: Patrick

Patrick — Thu, 07 Apr 2011 00:05:13 +0000

Dear Tax Guy,
I was on an international assignment in Switzerland and established non-resident status for tax purposes. Rather than enroll in the host organization pension plan the company policy was for the Canadian organization to continue to contribute into our local defined contribution RPP.

My question is whether these pension contributions should be reported as a PA on carryover RRSP room while I maintain non-resident tax status (and have no Canadian income or ability to earn RRSP contribution room)?

Thanks for your assistance.

By: Tax Guy

Tax Guy — Mon, 28 Mar 2011 21:47:48 +0000

The modern ITA was enacted in 1972 or 1973. RRSPs and pensions are fully integrated but I’m not sure if the PA rules have been in place since 1972 or sometime after (I’ll bet they were part of the original 1972 act).

By: Anne Clark-Stewart

Anne Clark-Stewart — Mon, 28 Mar 2011 20:14:56 +0000

My defined benefit pension plan is about to be cut in half due to my employer’s pending bankruptcy. I need to know when Pension Adjustments were first implemented in Canada. I know that the Pension Reform Act of 1991 caused employers to calculate the Pension Adjustment for 1990 T4 slips but some of my research indicated that the Pension Adjustment actually was in place as far back as 1974.

Could you please confirm for me when the Pension Adjustment came into play?

Can you also indicate what the limits were on contributions prior to 1990 or refer me to a table somewhere on a government web site?

Many thanks………..Anne

By: Tax Guy

Tax Guy — Thu, 17 Mar 2011 20:59:38 +0000

Sure. You don’t file anything on your tax return. The information is provided to the CRA and should show in your NoA.

By: Tarre

Tarre — Thu, 17 Mar 2011 20:14:20 +0000

Hey Tax Guy,

Just regarding the second question that you may have overlooked, how do you declare your PAR on your 2010 tax return so it is adjusted for 2011. User ‘Kari’ from March 2nd asked a similar question and you responded “There is no filing you do.” Can you elaborate on this.