Registered Plans Directorate Newsletter, no. 95-6R April 26, 2002

Specimen Pension Plans - Speeding up the process

This newsletter cancels and replaces Newsletter 95-6, dated October 26, 1995.

What's new?

In this newsletter, you will find information on the following:

• section 4 - amending an approved specimen;
• section 5 - specimens no longer being marketed;
• section 6 - closing an approved specimen;
• section 7 - registering a pension plan based on an approved specimen;
• section 8 - conformance of an existing registered pension plan to an approved specimen; and
• section 9 - specimen plan certification.

1. Introduction

On October 26, 1995, the Registered Plans Directorate issued Newsletter 95-6, called "Specimen Pension Plans - Speeding up the Process." It outlined the administrative requirements of specimen pension plans.

If the products you market as a consultant, insurance company, or trust company have consistent terminology, you can reduce the time we need to register plans or to approve amendments to plans by getting a specimen approved first.

Specimens may consist of both a plan text and a funding document, a plan text alone or a funding document alone. You may submit these with or without variables. A specimen can provide benefits on either a money purchase or a defined benefit basis. Examples of permitted variables include contribution rates, benefit rates, vesting schedules, and retirement ages. If the specimen includes variables, we will need to review a copy of the specific wording for each variable. Our approval will extend to both the specimen and the specifically worded variables you submit.

Once we approve a specimen, we assign an identification number, which consists of a three-digit number and one or more letters. The letter shows what we have approved under the specimen: P for plan text only, F for plan funding only, and SP for both the plan text and the funding. An employer must quote the identification number, along with details of any variables, when applying to register a pension plan. The employer may state that there are separate specimens for funding and for the plan text.

When your application to register a pension plan states that the pension plan is based on one or more approved specimens, we can register the pension plan if you enclose any chosen variables, along with certified copies of all other non-specimen documents related to the plan (if there are separate plan text and funding documents). The chosen variables must be identical to those approved under the specimen.

2. Specimen Approval Process

To approve a specimen so that you can market it, we need a copy of the plan text, the funding document, or both (if applicable); a copy of any permitted variables (preferably in a separate annex cross-referenced to the appropriate sections of the specimen); and a cover letter signed by you, asking us to approve the specimen. As well as listing the variables, the annex has to include spaces for identification of the specimen plan, the employer's signature, and the date. When we accept the specimen, we will give you an approval letter and assign a specimen number. In all correspondence about an approved specimen, include "EPP" and the entire specimen identification number (for example, EPP 501-P).

If you need to amend the specimen before we approve it, we will not give you an identification number. Any reference to "our file" will be to "EPP Alpha." When writing to us, refer to "EPP Alpha" and the entire specimen plan name. There is no deemed approval of a specimen during the approval process; this differs from the pension plan registration process. As a result, you cannot market the specimen until we approve it. We will not conditionally approve an initial specimen or later amendments.

3. Request to Abandon the Approval Process

If you decide not to pursue your request for specimen approval, you should send us written confirmation of your decision so that we can close our file.

4. Amending an Approved Specimen

Variables
After we approve a specimen, you can add new permitted variables, or amend or delete approved variables, without changing the status of the approved specimen. Only the person marketing the specimen may ask us to approve changes to the specimen. Once we approve an amendment of the variables, you need to identify any registered pension plan affected by the change, preferably through a list including the plan registration number, the plan name, and the change in variable adopted by the employer as approved under the specimen. We also need a Form T920, Application for Acceptance of an Amendment to a Registered Pension Plan, for each employer. You can provide this information for all affected plans or, once we approve the amendment under the specimen, you may ask each employer to submit a separate Form T920 listing the variables.

Terms
You may request an amendment to the terms of the specimen (plan text or funding document) by submitting a list of amendments for our approval. The list must identify those employers who have not adopted the change and have opted out of the specimen. We will ensure that all documents for those pension plans are still valid. We will request any necessary documents so that the plan's registration may continue. For example, if the specimen consists of a plan text, and the plan later becomes a customized plan, we need a new plan text to complete the file.

Employer-requested amendments
Employers may request the following individual amendments to their pension plan:

• a change to the name of a sponsoring employer or of the plan;
• a change in individual trustee;
• a change of an approved variable to another approved variable under the specimen;
• a change noting that the employer has opted out of the specimen; or
• an amendment to terminate the pension plan's registration.

For these types of changes, employers must submit an amendment to their pension plan under separate cover with Form T920. Any other change would customize their pension plan, as the amendments would no longer conform to the approved specimen.

Amendments necessitated by legislative changes
We do not need a Form T920 for each employer for amendments necessitated by legislative changes. Instead, you need to send us the necessary amendments to the specimen, along with written certification that all employers whose pension plan is based on the approved specimen have adopted the changes and have confirmed this adoption in writing.

5. Specimens No Longer Being Marketed

If you are no longer marketing a particular specimen but some registered pension plans still conform to it, the specimen is considered to be active. Our approval of the specimen will continue as long as the specimen complies with the Income Tax Act. This ensures the continued registration of any existing pension plans that conform to the specimen. We can close the specimen only when all registered pension plans have been terminated or have been converted to a customized pension plan.

6. Closing an Approved Specimen

Once no more registered pension plans conform to a particular specimen, or the remaining registered pension plans that did conform to the specimen have been converted to customized pension plans, you need to send us written confirmation to this effect. We will close the approved specimen when we receive your letter. You must also identify all related customized pension plans so that we may contact these employers to ensure that they submit the documents needed to maintain the registration of their pension plans.

7. Registering a Pension Plan Based on an Approved Specimen

To register a pension plan based on an approved specimen, we need the following documents:

• a completed Form T510, Application for Registration of a Pension Plan, with the "Specimen Plan Certification" section filled out (if the pension plan conforms to more than one approved specimen-that is, one for the plan text and another for the funding-please ensure that you also include both specimen identification numbers);
• any plan document that is not based on an approved specimen, if applicable (for example, a separate funding document);
• certified copies of any resolutions or agreements relating to the plan;
• the names and addresses of individual trustees, if applicable;
• the insurance policy contract number, if applicable; and
• a certified copy of the chosen variables as approved under the specimen.

If employers want to register a pension plan based on an approved specimen, they need only submit the documents listed in the preceding section. If the application is acceptable and the chosen variables match those approved under the specimen, we will register the pension plan and assign a seven-digit registration number to it.

If the employer submits additional documents to those listed in the preceding section, such as the entire plan text or funding document, we consider the employer to have submitted a customized pension plan for registration. As a result, we have to review those documents in case their terms differ from those approved under the specimen. Such a submission defeats the purpose of specimen approval, which is to shorten the time needed to register a plan based on an approved specimen.

8. Conformance of an Existing Registered Pension Plan to an Approved Specimen

To determine whether an existing registered pension plan conforms to an approved specimen, we need the following information:

• a letter from the employer identifying the specimens;
• a board resolution setting out the change with an effective date and certification, as outlined in the next section;
• certified copies of all non-specimen documents related to the plan, if applicable;
• any chosen variables as approved under the specimen;
• the names and addresses of individual trustees, if applicable;
• the insurance policy contract number, if applicable; and
• a completed Form T920 .

Do not submit a copy of the specimen with the submission. We only need the specimen identification numbers.

9. Specimen Certification in Board Resolution

The following certification is required when an existing registered pension plan is amended to conform to an approved specimen plan:

I certify that, except for the details of the chosen permitted variables submitted with this request, the plan text and/or funding vehicle conforms in all respects to specimen number (enter the identification numbers of all relevant specimens).

You have to send us a complete plan text or funding vehicle if either the plan text or the funding vehicle is amended so that the particular documents no longer conform to these specimens.

10. How to Contact Us

By telephone

You can reach the Registered Plans Directorate at the following telephone numbers:

General enquiries - English
(613) 954-0419
General enquiries - French
(613) 954-0930

Our enquiry lines are open Monday to Friday from 8 a.m. to 5 p.m., Eastern Time. Clients who wish to contact the Directorate after 5 p.m. may leave a message on our voice mailbox system.

In writing

Please send written enquiries or submissions for registered plans to:

Registered Plans Directorate
Canada Customs and Revenue Agency
45 Sacré-Coeur Boulevard, 3rd floor
Hull QC K1A 0L5
Fax: (613) 952-0199

Mailed and faxed submissions receive the same priority.

11. Your Opinion Counts

We welcome your feedback on this newsletter. Please send your comments or suggestions to the attention of the Director General of the Registered Plans Directorate, at the above address.