Following a corporate restructuring, an employer “closed” its employees profit sharing plan (EPSP) and has not contributed to the plan since January 1, 2017. However, the plan continues to be administered as if it were a valid EPSP. Can the minimum contribution requirement set out in IT-280R, para. 6 be waived? In responding “no,” CRA referenced the requirement in para. (a) and stated:
This means that there must be a binding obligation on the employer to make contributions pursuant to the plan’s contribution formula, and that such contributions must actually be made in the event of profits. If the terms of a valid EPSP were subsequently amended to remove the employer’s obligation to make contributions, the arrangement would no longer meet this requirement … . The CRA has no authority to waive this requirement.
…[Whether] the arrangement continues as a salary deferral arrangement, retirement compensation arrangement or an employee benefit plan … is a question of fact … .