Income Tax Act Amendment - Age Limit Increased
This change is retroactive to January 1, 2007
Income Tax Act Amendment - Age Limit Increased from 69 to 71
You may have heard about a recent amendment to the age limit of maturity of the Income Tax Act. As an OPB employer, we want to make sure that you're up-to-date on any policy changes that affect pensions and pension administration. This bulletin has been compiled to help clarify the most recent change to the Income Tax Act Canada (the ITA) and, what it means for you, the employer.
About the change
The Federal Budget released on March 19, 2007 included an amendment to the ITA. Under the revised Income Tax Act, the age limit of maturity for both Registered Pension Plans (RPPs) and Registered Retirement Savings Plans (RRSPs) has been increased from 69 to 71.
This means that registered pension plan members, such as members of the PSPP, and holders of registered retirement savings plans can continue to make contributions and accrue benefits until November 30th of the year in which they turn 71.
This change means that PSPP members must begin receiving their pension no later than the end of the calendar year in which the member turns 71 years old instead of 69.
What do you need to do?
This amendment to the ITA simply means that the last day you can deduct pension contributions from a plan contributor is November 30th of the calendar year in which the member turns 71.
What will OPB be doing?
No change is required to the Plan as the Plan text states that the PSPP must comply with ITA requirements. Therefore, the PSPP is now required to commence payment of a member's pension no later than the end of the calendar year in which the member turns 71.
Where to Find the Updated Communications Materials
The online employer manual has already been updated to reflect this change. We will be updating our print communications shortly. To review the revised pages in the manual, please refer to the list below:
- Enrolment - Restrictions to Membership - Membership after 65
- Calculating Basic Contributions - Member Contributions
- Contribution Deductibility & Employer Requirements - When Member Contributions End
- Income Tax Rules - Member Reaches 71
If you have any questions, please contact Steve Reis, Employer Services Specialist at 416-601-3967.