A.B. Adler (613) 957-8962
March 23, 1989
Dear Sirs:
This is in reply to your letter of March 7, 1989 in which you requested a technical interpretation with respect to a former unfunded accumulated sick leave plan that has been superseded by an insured sick leave disability plan.
In particular you requested our views whether the former sick leave plan constituted a retirement compensation arrangement (RCA) as defined in subsection 248(1) of the Income Tax Act (Act).
We do not provide technical interpretations with respect to factual and completed transactions or arrangements. These may, however, be discussed with. officials at your local district taxation office to ascertain their income tax implications. We do, however, offer the following general comments.
You are correct in your understanding that the definition of RCA in subsection 248(1) of the Act contemplates a funded plan or arrangement. Further, where an accumulated sick leave plan or arrangement is a funded plan it is our view generally that such a plan would constitute an RCA.
We trust that our comments are of assistance to you.
Yours truly
for Director
Financial Industries Division Rulings Directorate