| 5-921532 | |
| 24(1) | D.S. Delorey |
| (613) 957-8953 |
Attention: 19(1)
June 3, 1992
Dear Sirs:
This is in reply to your FAX transmission of May 19, 1992 concerning the computation of pensionable earnings for the purposes of a registered pension plan ("RPP"). We note that your enquiry relates to a specific taxpayer and its employees or former employees. Because of the secrecy provisions of the Income Tax Act (the "Act"), we are not at liberty to discuss the affairs of a third party without proper authorization. The following comments are thus of a general nature only.
Under the Act and the Income Tax Regulations, there is a limit on the amount that can be contributed to an RPP by an employee. In computing this limit, one of the factors used is the amount of the employee's "compensation" for the year. For this purpose, the word "compensation" is defined in subsection 147.1(1) of the Act to mean the aggregate of certain amounts, none of which is a "retiring allowance". Consequently, an amount that is properly characterized as a retiring allowance would not form part of an employee's compensation for the purpose of determining the amount that can be contributed to an RPP.
We trust our comments are of assistance.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate