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ARTICLE · 20 JUNE 2016

Thirty Per Cent Rule Update And Tax Policy Review

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The federal government is reviewing one of the investment rules that applies to registered pension plan investments. The review is considering both the pension and tax policy rationale for the rule.

CanadaEmployment and HR
Ash Gupta
Ash Gupta
Daniel Hayhurst
Daniel Hayhurst
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Executive Summary

The federal government is reviewing one of the investment rules that applies to registered pension plan investments. The review is considering both the pension and tax policy rationale for the rule. While the repeal or relaxation of this rule would not impact the majority of Canadian registered pension plans in terms of their actual investments, any changes to income tax rules relating to pension plan investments could have much broader application. If you wish to make submissions to the federal government, they must be submitted by Sept. 16, 2016.

Background

The so-called "30% Rule" restricts pension plans from investing plan moneys, directly or indirectly, in securities of a corporation to which are attached more than 30% of the votes that may be cast for the election of directors. Exceptions exist for investments in corporations that qualify as investment, real estate or resource corporations.

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