Welcome Clarification For Plan Administrators On Pension Investment Restrictions

The Canada Revenue Agency ("CRA") recently revisited its position on the application of the quantitative limits applicable under pension laws. The Pension Benefits Standards Act ("PBSA") and many provincial pension benefits statutes limit a pension fund to not more than 10% of the market value in any one investment. In 2007, the CRA indicated that where a pension fund invests indirectly through a pension fund investment corporation, the quantitative limits would apply at the level of the pension fund investment corporation. Pension fund investment corporations are exempt from Part 1 Tax under the Income Tax Act (Canada) (the "Tax Act"), provided certain conditions are met. One of these conditions is the requirement that a pension investment corporation make no investments other than investments that a pension fund or plan is permitted to make under the PBSA or provincial pension benefits legislation. The CRA's administrative position caused concern that this exemption