2017-0685411E5 Reporting a supplementary pension benefit

Principal Issues: What is the correct reporting of a pension benefit paid from an unfunded supplemental plan on a T4A Statement of Pension, Retirement, Annuity, and Other Income (T4A)?

Position: A periodic or lump sum payment from an unregistered pension plan is reported in Box 109/190 of the T4A, respectively.

Reasons: Amounts paid under an unfunded supplemental plan would generally constitute a superannuation or pension benefit as defined in subsection 248(1) of the Income Tax Act (the Act). Such amounts are excluded from an individual’s eligible pension income for a taxation year by reason of paragraph 118(8)(f) of the Act and should not be reported on Box 16 of the T4A.

Author: Hooey, Kathy
Section: Section 60.03; Paragraph 56(1)(a), 118(8)(f); Subsection 118(3), 118(7); Definition of “superannuation or pension benefit”, “retirement compensation arrangement”, “employee benefit plan” under subsection 248(1).

XXXXXXXXXX                                                                                            2017-068541

March 27, 2017

Dear XXXXXXXXXX:

Re: Technical Interpretation Request
       XXXXXXXXXX

We are writing in response to your letter dated January 25, 2017 concerning the proper reporting of a supplementary pension benefit on the T4A Statement of Pension, Retirement, Annuity, and Other Income (T4A). The XXXXXXXXXX (the Employer) has an unfunded, unregistered pension arrangement and pays supplemental retirement benefits to retired elected municipal officials (Pensioners). You inquire whether such pension benefits paid by the Employer should be reported on the T4A slip as a pension or superannuation amount (Box 16) or a periodic payment from an unregistered plan (Box 109) or as other income (Box 28).

Our Comments

This technical interpretation provides general comments about the provisions of the Income Tax Act (Act) and related legislation (where referenced).  It does not confirm the income tax treatment of a particular situation involving a specific taxpayer but is intended to assist you in making that determination. The income tax treatment of particular transactions proposed by a specific taxpayer will only be confirmed by this Directorate in the context of an advance income tax ruling request submitted in the manner set out in Information Circular IC 70-6R7, Advance Income Tax Rulings and Technical Interpretations.

Reasonable benefits paid under an unregistered, unfunded supplemental pension plan would constitute superannuation or pension benefits, as defined in subsection 248(1) of the Act and be included in the income of the recipient in the year received pursuant to subparagraph 56(1)(a)(i) of the Act. Such amounts are reported as periodic or lump-sum payments from an unregistered pension plan in Box 109 or 190 of the T4A Statement of Pension, Retirement, Annuity and Other Income slip, respectively. As these amounts are paid from an unfunded supplemental plan or arrangement, they would not be eligible for pension income splitting under 118(8)(f) of the Act.

We trust these comments will be of assistance to you.

Yours truly,

Mary Pat Baldwin CPA, CA
Manager
Deferred Income Plans Section
Financial Industries and Trusts Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch

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