Fiscal Agents Radar Screen:- Investor Warnings
Source: Financial Services Commission of Ontario (FSCO) and Canada Customs and Revenue Agency (CCRA)
Title: FSCO, CCRA issue warning in Individual Pension Plans (IPP)
Date: August 30, 2001

The Financial Services Commission of Ontario (FSCO) has recently acknowledged it's awareness that the Canada Customs and Revenue Agency (CCRA) is concerned about transfers being made from Registered Pension Plans (RPPs) to Individual Pension Plans (IPPs). They feel that the transfers may not always comply with the federal Income Tax Act (ITA).

The FSCO is also concerned that some transfers to IPPs may not satisfy the requirement under the Ontario Pension Benefits Act (PBA) that states that amounts transferred must be administered as a pension or deferred pension.

According to a release posted on the FSCO web site, "This means that the eventual payment from the IPP must be made only in the form of a pension. Money that should be paid as a pension must not become surplus and subsequently be paid out in cash."

The FSCO is warning individuals who may be considering an IPP that possible problems may occur if a transfer is not done in accordance with pension legislation.

The release from the FSCO also states that plan administrators should be aware that a transfer of the commuted value of an RPP to an IPP can not occur unless the administrator of the IPP certifies that they money transferred will be administered as a pension or deferred pension. If the FSCO becomes aware of a filed plan provision or amendment that does not comply with these requirements, it will consider the possibility of revoking its registration.

For more information, please click on the following link:
http://www.fsco.gov.on.ca/FSCO_UW_MainEngine.nsf/docuniqueid/73150AA247EF6A8585256AB8004E1268?opendocument