5-911042
Re: RRSP Contribution
We are writing in reply to your letter of March 11, 1991, concerning the above-noted subject. You ask whether you may withdraw your 1990 contribution to your company pension plan in order to invest it in an RRSP in 1991.
The terms of your company pension plan will prohibit the withdrawal of your contributions prior to retirement or termination and, thus, you will be unable to reinvest the amount in an RRSP in 1991. If you have any questions concerning the terms of your pension plan, you should contact your employer or your pension plan administrator.
Your contribution to an RRSP for the 1991 taxation year is limited to the least of:
(1) 18% of 1990 earned income minus your 1990 pension adjustment (PA); and
(2) $11,500
Your PA for 1990 was included in Box 52 on your T4 slip and reflects the pension benefits which accrued to you in that year from your company pension plan. This department will issue you a statement in the fall of this year which will tell you how much you can deduct as a contribution to your RRSP in 1991.
Amounts contributed by you to your company pension plan were deducted from income and, therefore, are tax sheltered. Contributions and earnings therein remain tax-sheltered until you retire or otherwise withdraw from the plan, and the pension you receive thereafter is taxed as received.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate