IPP Administration & Filing Requirements

Sponsors of IPPs are responsible for the administration and filing requirements of their plans.  We have summarized these and other important information requirements below:

• Administration Requirement

• Filing Requirements

  
  

Administration Requirements

Pension Adjustments

Employers sponsoring registered pension plans are required to calculate and report Pension Adjustments (PAs) to Canada Revenue Agency (CRA) annually on each active plan member's T4.  A pension plan member’s T4 should show the PA in box 52 and the plan registration number in Box 50.  Any required contributions made by the plan member should be shown in Box 20.

To determine a member’s PA for a calendar year follow this formula

2%* x Annualized Pensionable Earnings** x 9 – $600 = PA

*          If your plan does not have a 2% accrual rate this formula will need to be revised.

**        "Pensionable Earnings" is defined in your pension plan document, if you use our standard specimen plan document.  It is the amount shown in Box 14 as employment income on your T4.   

If you do not have a full year of service, the above formula may need to be adjusted.

• Please note that PA calculation each year is subject to certain maximum amounts as summarized in the following table:

 *         Based on limits as outlined in the February 2005 Federal Budget.

Please use the IPP PA Calculator for Pension Adjustment Calculation purposes.

Pension Increases

The standard Westcoast Actuaries Inc. IPP specimen pension plan document provides increases in pension after commencement related to the increase in the Consumer Price Index (CPI) each year. 

Please note that the increases must be warranted justified by the investment return of the fund.

 Filing Requirements 

T3P (Employees’ Pension Plan Income Tax Return) Form

The filing deadline for Form T3P is 90 days after the end of the calendar year.  If the form is filed late, CRA may impose penalties for the late filing.  T3Ps are to be filed by the trustees and required only for plans that are governed by a Trust Agreement. 

T244 (Registered Pension Plan Annual Information Return) Form

For provinces that exempt IPPs for connected persons and/or high income earners (i.e. B.C., Manitoba, Quebec and P.E.I.), the plan is only required to file the CRA T244 Form.  The filing deadline for Form T244 is 180 days after the end of the year.  If this form is filed late, CRA may also impose penalties for the late filing. For IPPs that are subject to federal / provincial registration, an Annual Information Return (AIR) must also be filed with the pension regulator.  CRA allows a joint return to be filed with the federal or provincial pension regulators. If the joint AIR is filed, the T244 filing with CRA is not required.

FSCO Investment Information Summary (IIS), Ontario Only

Beginning 2006, the Financial Services Commission of Ontario (FSCO) requires this form to be completed and filed by June 30th of each year. 

FSCO Form 7 Summary of Contributions, Ontario Only

The Financial Services Commission of Ontario (FSCO) requires this form to be completed and provided to the trustee of the pension fund within 60 days of the beginning of the plan's fiscal year. 

Survey of Trusteed Pension Funds Form

Statistics Canada conducts Census of Trusteed Plan from time to time.  The filing of this form is mandatory when requested.

Actuarial Valuations

Certain IPP clients will be required by CRA to complete an actuarial review of their plan and to file a report with CRA.  The regular going-concern funding actuarial valuation is performed every three years (triennially).  If an actuarial valuation is due for the current year, the report is usually completed and sent to the client before the end of June. If you require the actuarial valuation for your plan to be completed by an earlier deadline, please notify us by email at IPP-Admin@WAInc.ca.

Pension Legislation - Locking-In

Pension benefits are subject to locking-in provision as required under federal / provincial pension legislation.  Locked-in funds cannot be withdrawn in cash.  They must eventually be used for retirement purposes (payment of pension from pension fund), to purchase an immediate or deferred lifetime annuity or transferred to a Locked-In RRSP, Locked-In Retirement Income Fund (LRIF), Locked-In Retirement Account (LIRA) or Life Income Fund (LIF).

RRSP Room & Conversion to Annuity or RRIF

IPP members who are at the maximum earnings level can expect to have RRSP deduction limit of $600 each year.  Remember, the latest date for commencement of pension from pension plan, converting RRSPs into annuities or Registered Retirement Income Funds (RRIF, LRIF or LIF) is the end of the calendar year the individual reaches age 71.

 Need Further Information or Assistance?

If you require any information or assistance, please contact Westcoast Actuaries Inc.