Income tax

The amount of pension earned and pensionable service purchased in each tax year will reduce the available “RRSP room” in the following tax year.

There are different tax rules governing the transfer of pension funds on service earned before 1992 and service earned after 1991. For details, visit the Buybacks Question and Answer page.

Note: The CAAT Pension Plan's registration number for income tax purposes is 0589895.

Pension Adjustment (PA)

The PA represents the "deemed value" according to CRA, of the pension earned during the year. It is used to calculate RRSP contribution room for the next year.

The PA is calculated according to a formula determined by CRA and is equal to (Pension Benefit x 9) - $600.  

Past Service Pension Adjustment (PSPA)

A PSPA is the "deemed value" of an additional pension benefit received - such as a purchase of pre-enrolment, vested prior or non-vested prior service - for service after 1989. The Plan calculates the PSPA and submits it to CRA for approval.

Pension Adjustment Reversal (PAR)

A Pension Adjustment Reversal is generated when a member leaves work and chooses either a refund of contributions or a commuted value transfer. If the total of PAs and PSPAs is more than the benefit for post 1989 service, then a PAR is issued. It restores lost RRSP room.