-
Actuary
means a fellow of the Canadian Institute of Actuaries who is qualified
to calculate tax-deductible pension contributions (See Questions
A5 and F1).
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Connected
Person means a plan member who directly or indirectly
owns >= 10% of any class of shares of the plan sponsor, or
is not dealing at arm’s length with the plan sponsor (See
Questions A2, B3, B6, C2, C3, C5, E1 and E2).
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Current
Service means a plan member’s pensionable service
for the current calendar year (See Questions B4 and C2).
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Defined
Benefit Pension Plan (DB Plan) means an arrangement whereby
your pension is based upon a formula -- e.g., 2% times highest 3-year
average earnings times pensionable service. For connected persons,
post-reform (e.g. post-1990) benefits must be based on the indexed
earnings for each year (See Questions A1, A5, B2, B3 and D3).
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Defined
Contribution Pension Plan (DC Plan) means an
arrangement whereby your pension is based upon the accumulated
contributions made by your employer and perhaps, by you (See
Questions B1, B2, B3 and B4).
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Designated
Plan means a pension plan for Specified Individuals (See
Questions A5, D3 and F1).
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Excess
Surplus means the greater of 25% of actuarial liability
and 2 times current service cost (See Question B9).
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Highly-Paid
Employee means a plan member who has pensionable earnings
of at least 2.5 times the Year’s Maximum Pensionable Earnings
as defined under the Canada Pension Plan -- e.g., pension earnings
of at least $120,750 (2.5 x $48,300) in 2011 (See Questions A2,
C2 and C3).
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Indexed
Earnings means the earnings paid to the DB Plan member
in any given year, increased with the wage index growth from the year
earnings were paid to the year indexed earnings are calculated.
(See Question B3).
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ITR-mandated
actuarial assumptions mean the funding of an IPP must
be based on age 65 retirement, a 7.5%-per-year interest rate,
a 5.5%-per-year salary scale, etc. (See Questions A5 and F1).
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Locking-In
means that assets can only be used to provide a pension (See Question
B9).
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Past
Service means a plan member’s pensionable service
for the period prior to the current calendar year (See Questions
B7 and C2).
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Past
Service Pension Adjustment (PSPA) generally means the
sum of Pension Adjustments for prior years that should have been
reported based on earnings paid had the member been a DB Plan
member and accrued pension benefits for post-1989 years when past
service benefits are being provided under a DB Plan. PSPA is usually
satisfied through a Qualifying Transfer from the member’s
RRSP. If the plan member’s RRSP assets are insufficient
to satisfy the PSPA requirements and the plan member has unused
RRSP contribution room, then the remainder of the PSPA may be satisfied
by certification of the unused RRSP contribution room (See Questions
B5, B7 and E2).
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Pension
Adjustment (PA) means the amount used to reduce the plan
member’s maximum RRSP contribution because of pension accrual
under the IPP (See Questions B2, B3, B5, B6, B8 and E2)
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Pensionable
Earnings means salaries & wages, bonuses, director’s
fees, taxable benefits and allowances. Dividend income is not
eligible (See Question B4).
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Qualifying
Transfer means a transfer of funds from an individual’s
RRSP or DC Plan account to a DB Plan to satisfy the total or a
portion of the PSPA. This transfer can be completed by using Income
Tax Form T2033 (See Questions B7 and C2).
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Specified
Individual means either a Connected Person or a Highly-Paid
Employee (See Questions A2 and A5).
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