Specified pension plan (SPP) lump-sum payments

The following SPP lump-sum payments can be transferred directly to your RRSP, RRIF, SPP, or PRPP, or to buy an eligible annuity for yourself:

  • payments that you receive from an SPP as a member
  • payments that you receive as the current or former spouse or common-law partner of a member on the breakdown of your relationship
  • payments that you receive as the current or former spouse or common-law partner of a member due to their death

Lump-sum payments from an SPP that you receive under a court order or written agreement relating to a division of property between you and your current or former spouse or common-law partner in settlement of rights arising from the breakdown of your relationship must be transferred directly to an RRSP or to a RRIF, or can be used to purchase an annuity. However, you and your spouse or common-law partner had to be living separate and apart at the time of the transfer because of the breakdown of your relationship.

Amounts cannot be transferred to an RRSP if you were over 71 years old at the end of the tax year.

Specified pension plan (SPP) contributions

For 2010 and later tax years, SPP contributions are subject to the same rules as RRSP contributions. An individual's account under an SPP is treated as an RRSP for specified purposes, and the income attribution rules that apply to a spousal or common-law partner RRSP also apply to accounts under an SPP. In addition, lump-sum death benefits paid from an account under an SPP are treated similarly to rollovers of death benefits paid from a registered pension plan (RPP).

Deduction for pension repayments

An individual can claim deduction if he or she repays to an RPP an overpayment of an amount received from the RPP in error that was included in his or her income for the year or a preceding year.

Completing your income tax and benefit return

If you transferred the amount directly, do not claim a deduction for the amount directly transferred and do not report the income on your income tax and benefit return.

However, if you received the payment in cash or by cheque, you cannot defer the tax. Report the amount on line 130 of your income tax and benefit return in the tax year the payment is received.

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