| 19(1) | File No. 5-8394 |
| Maureen Shea-DesRosierss | |
| (613) 957-8953 |
September 22, 1989
Dear Sirs:
Re: Employee Benefit Plans established prior to October 9, 1989
This is in reply to your letter of July 11, 1989 concerning the above mentioned subject.
You have a situation where one of your clients currently sponsors two existing arrangements which were originally established as employee benefit plans and are currently being operated as such. No contributions have been made to these existing arrangements since October 9, 1986. Both existing arrangements are funded through written trust agreements. Your client wishes to:
1. combine the two trust funds of the existing arrangements into one fund which would then be the fund for both existing arrangements, or
2. combine both existing arrangements into in existing arrangement and combine both trust funds into one trust fund.
You enquire as to whether either of the above changes would cause the existing arrangements to cease to be the original arrangements and therefore to be a new arrangement and therefore a retirement compensation arrangement. You indicate that the terms of the plans as they regard payment of benefits to employees would remain the same in every respect other than for the change described above.
We do not give opinions in respect of specific proposed transactions other than as a reply in an advance income tax ruling request. We can however, offer the following general comments.
It is a question of fact as to whether the retirement compensation arrangement provisions would apply to either of the proposed transactions described above. Some of the items that would have to be considered are the purpose of the transaction, whether the trust agreements permit the proposed merger, etc. A detailed analysis of the proposed transactions would be necessary to give an adequate reply.
We trust the above comments will be of assistance to you.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate