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ARTICLE · 18 APRIL 2012

Federal Budget 2012 Changes

Borden Ladner Gervais LLP
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The March 29, 2012 federal budget ("Budget 2012") included several proposed changes in the pension and benefits area.

CanadaTax
Eva Krasa
Eva Krasa
Pamela Cross
Pamela Cross
Sonia Mak
Sonia Mak
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The March 29, 2012 federal budget ("Budget 2012") included several proposed changes in the pension and benefits area. On April 2, 2012 the Canada Revenue Agency issued a number of Qs&As which provide some additional detail on certain of the changes.

Retirement Compensation Arrangements

Many of our clients are either sponsors of, or service providers to, supplemental employee retirement plans ("SERP") established to provide supplemental pensions to the sponsor's employees. A SERP which is funded will usually constitute a Retirement Compensation Arrangement ("RCA") for tax purposes.

Unlike registered plans such as RRSPs and registered pension plans, RCAs have not to date been subject to any specific restrictions regarding the investments which can be held. Budget 2012 proposes to change this by introducing new "prohibited investment" rules for RCAs. Further, new "advantage" and "strip" rules are also being introduced. No definitions of these new terms are

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