Newsletter no. 95-6R1, Specimen Pension Plans – Speeding up the Process

March 15, 2016

This newsletter is intended for registered pension plan consultants, insurance companies, and trust companies. It cancels and replaces Newsletter No. 95-6R, dated April 26, 2002.

What’s new?

Along with various housekeeping changes, we have simplified the administrative process for amending specimen plans and their related registered pension plans. You no longer have to send us a separate Form T920, Application to Amend a Registered Pension Plan, for each plan.

We have changed the specimen plan identification number format to RPP-S-###. For instance, if your specimen identification number was EPP123-SP, it is now RPP-S-123.

We have also clarified that a specimen plan can be a combination plan.

Introduction

If the documents you market have consistent wording, you can reduce the time it takes to register them or to approve amendments to them by having us approve a specimen first.

Specimens can be for a plan text or a funding document or both. You can send these with or without variables. A specimen can offer benefits on a money purchase basis or a defined benefit basis, or on a combination of both. 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 be for both the specimen and the specifically worded variable.

We assign each specimen an identification number that starts with RPP-S and ends with a three-digit number. An administrator must quote the identification number, and give details of any variables, when applying to register a pension plan based on a specimen. The funding document and the pension plan text can be based on separate specimens.

When the administrator’s application to register or amend a pension plan states that the pension plan is based on one or more approved specimens, we will approve the application if any chosen variables, along with certified copies of any other non-specimen documents related to the plan, are enclosed. The chosen variables must be the same as those we approved under the specimen.

Specimen approval process

To approve a specimen so that you can market it, we need all of the following:

  • a copy of the plan text or the funding document or both (whichever applies)
  • a copy of any permitted variables (in a separate annex cross-referenced to the appropriate sections of the specimen)
  • a cover letter signed by you, asking us to approve the specimen

The annex has to list the variables and include spaces for the specimen plan name, the administrator’s signature, and the date.

After we have reviewed the specimen, we will send you a request for corrections or an approval letter with a specimen identification number.

In all correspondence about an approved specimen, include the entire specimen identification number (for example, RPP-S-123).

There is no deemed approval of a specimen during the approval process. As a result, you cannot market the specimen until we approve it. We will not conditionally approve an initial specimen or amendments to it.

Request to abandon the approval process

If you decide not to go ahead with your request for specimen approval, please tell us in writing so we can close our file.

As well, if we do not receive a response when we ask for corrections within the time we specified, we will consider you to have abandoned your specimen.

Amending an approved specimen

Variables or terms

After we approve a specimen, you can do either of the following:

  • add new permitted variables or amend or delete approved variables
  • ask for an amendment to the terms of the specimen by sending the revised wording for our approval

If the amendment is not acceptable, we will ask for corrections. You cannot base any new plans on the specimen until we have approved the revised wording.

Only the person marketing the specimen can ask us to approve amendments to it.

After we approve an amendment, you need to identify each affected registered pension plan in a list that includes the plan registration number, the plan name, and the change in variable adopted by the administrator as approved under the specimen. We also need written certification that all administrators whose pension plan is based on the approved specimen have adopted the change and confirmed this in writing.

If a plan administrator has not adopted the change, we need customized plan documents. For example, if the specimen is for a plan text, we need a new plan text to complete the file. And if any amendments are made, we will need a Form T920 for that pension plan.

Specimens no longer being marketed

If you are no longer marketing a particular specimen but some registered pension plans still conform to it, we consider the specimen to be active. Our approval of the specimen will continue as long as the specimen meets the requirements of the Income Tax Act. This is so the registration can continue for any pension plans that conform to the specimen. We will close the specimen only when all registered pension plans have been terminated, have been converted to a customized pension plan, or conform to another specimen.

Closing an approved specimen

As soon as there are no registered pension plans that conform to a particular specimen, you need to tell us in writing. We will close the approved specimen when we receive your letter.

Registering a pension plan based on an approved specimen

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

  • a completed Form T510, Application to Register a Pension Plan
  • any plan document that is not based on an approved specimen (for example, a separate funding document)
  • any resolutions or agreements relating to the plan
  • the names and addresses of individual trustees, if any
  • the insurance policy contract number, if any
  • a certified copy of the chosen variables as approved under the specimen

If the application is acceptable and the chosen variables match those approved under the specimen, we will register the pension plan and assign it a seven-digit registration number.

Do not send a copy of the specimen with the submission. We need only the specimen identification number and any variables. If we receive a copy of the specimen, we will have to review the documents to make sure their terms are the same as those we approved under the specimen. This would defeat the purpose of specimen approval, which is to shorten the time needed to register a plan based on an approved specimen.

Amending a pension plan based on a specimen

Administrators can ask for any of the following for their pension plan:

  • to change the name of the administrator
  • to change the name of the plan
  • to change the name of a participating employer
  • to add or remove a participating employer
  • to change an individual trustee
  • to change an approved variable to another approved variable under the specimen
  • to terminate the pension plan’s registration

For these types of changes, administrators must send an amendment to their pension plan with Form T920. Any other change would customize their pension plan, since its terms would no longer conform to the approved specimen.

An administrator can also opt out of the specimen by sending a customized document to replace the specimen wording, along with Form T920. Or the administrator can send the new specimen plan number along with the other required documents (see below) if it conforms to another specimen.

Having an existing registered pension plan conform to an approved specimen

For an existing registered pension plan to adopt an approved specimen, we need all of the following:

  • a letter from the administrator identifying the specimen(s)
  • a board resolution setting out the change with an effective date and certification
  • a certified copy of any non-specimen documents related to the plan
  • a certified copy of any chosen variables as approved under the specimen
  • the names and addresses of individual trustees, if any
  • the insurance policy contract number, if any
  • a completed Form T920

They must not send a copy of the specimen with the submission. We need only the specimen identification number and any variables.

How to contact us

Contact us at the Registered Plans Directorate if you have any questions about this newsletter.

Our telephone enquiries service is available Monday to Friday from 8:00 a.m. to 5:00 p.m., Eastern time. A voice mailbox system takes messages outside these hours. Messages will be returned the following business day.

In the Ottawa area:

For service in English:  613-954-0419.
For service in French:  613-954-0930.

Elsewhere in Canada:

For service in English: 1-800-267-3100.
For service in French: 1-800-267-5565.

Write to us

If you need guidance on issues related to a specific plan, write to us at the Registered Plans Directorate, Canada Revenue Agency, Ottawa ON  K1A 0L5, or fax us at 613-952-0199.

We welcome feedback on this newsletter. Email your comments to rpd/dre@cra-arc.gc.ca.

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