Tax implications due to the improvement of pension benefits under the Public Service pension plan - Reminder

Date: November 21, 2008

To: Compensation Managers Heads of Human Resources, Heads of Crown Corporations, Heads of Agencies,Participating Separate employers

Information to Plan Members

Plan members were informed in 2006 of amendments to their Public Service pension plan that improved the pension benefits payable under that plan.  These amendments became effective in January 2008.

It is important to remind employees that these improvements could reduce their registered retirement savings plan (RRSP) deduction limit for 2009.

If  plan members make excess contributions to an RRSP in 2009, they may have to withdraw the excess contributions and they may be taxed on this income.

Employees should also be reminded that when determining the amount they can contribute to an RRSP in 2009, they should take into account the amount reported on their T215 slip, Past Service Pension Adjustment (PSPA) Exempt from Certification in the spring of 2008.

If plan members have questions about the tax implications of these improvements, they are encouraged to contact the tax office of the Canada Revenue Agency at:

1-800-959-8281

For more information on the amendment improving the pension plan, members can consult the following documents on the Treasury Board Secretariat Web site:

• Improvement to the three major public sector pension plans;
• Frequently Asked Questions

For detailed information about the Public Service pension plan, please refer your employees to Your Public Service Pension and Benefits Web site

Phil Charko
Assistant Secretary
Pensions and Benefits Sector