Registered retirement savings plan (RRSP)

You can find your RRSP deduction limit for the following year on your Notice of Assessment, which you’ll receive from CRA after filing your tax return. This information is also available when you log into My CRA Account. The calculation of the amount will depend on whether you are a member of a pension plan, and if you are, the type of pension plan.

The amount you can contribute to an RRSP/PRPP in a given year is:

18% of your earned income for the prior year, up to the annual maximum amount.

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Any pension adjustment (PA) for the prior year
Your PA for the prior year should be on your T4 slip (Box 52) or T4A (Box 034). The pension adjustment (PA) amount is the value of the benefits you earned in the year under your employer’s registered pension plans (RPP) and deferred profit sharing plans (DPSP), and possibly some unregistered retirement plans or arrangements.

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Any past service pension adjustment (PSPA) for the current year
The PSPA is the sum of the additional pension credits that would have been determined for prior years if the RPP had provided for the upgraded benefits or additional period of pensionable service at the time each pension credit was first required to be determined.

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Any pension adjustment reversal (PAR) for the current year
In a DPSP or defined contributions (money purchase) pension plan, the PAR is the amount of the employer contributions that are unvested at termination of membership. In a defined benefit provision the PAR is generally the difference between:

the PAs and PSPAs earned to termination of membership, and

the commuted value of benefits.

This information is in Box 2 of your T10 slip.

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Unused contribution room from previous years

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Maximum RRSP contribution
You can deduct what you contribute to your RRSP from your taxable income. You can also deduct previous contributions if you haven’t applied them as deductions yet or continue to roll them over.

If you’d like to transfer an existing RRSP from another financial institution to Vancity, simply print out the RRSP transfer application form. You can fax the completed form to us at 604-877-7999 or book an appointment.

Unused contribution room can be carried forward to use in any future year. However, contributions must be made by the end of the year the owner of the RRSP turns 71.

No. You can choose when to deduct them on your income tax file while continuing to invest. Deduct them now, or in a future year, or even divide them between years. Waiting to deduct contributions may increase your tax savings.

We suggest you check with your tax advisor or your Vancity investment professional before electing to carry-forward RRSP deductions.

Yes. Many people forget they can contribute even without current earned income (for example, after retiring). If you have unused RRSP contribution room from past years and funds available, contributing to your own or your spouse’s RRSP is allowed up until the end of the year the planholder turns age 71.

Watch out for special situations where contributing to an RRSP may not make sense. For example, where you’ll lose eligibility for the Guaranteed Income Supplement (GIS), or your tax rate when withdrawing in retirement will be much higher than your initial tax savings. Other options, such as a Tax Free Savings Account (TFSA), might be more appropriate for your circumstances.

Talk to us. We can help you create a plan to catch up on unused RRSP contribution room.