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Last updated: June 28 2011
Budget Activity: Financial Measures Take Shape
PRPPs - In December 2010, Finance Ministers agreed on a framework for defined contribution Pooled Registered Pension Plans (PRPPs) to provide Canadians with a new, low-cost, accessible vehicle to meet their retirement objectives. Federal, provincial and territorial officials are working together to implement PRPPs as soon as possible. On June 15, 2011, the Department of Finance released a consultation document entitled "Tax Rules for Pooled Registered Pension Plans (PRPPs)". Feedback is being sought on these proposed modifications with a deadline of August 12, 2011. Financial advisors will be interested in the details of this document ñ it looks like full speed ahead for PRPPs!
RDSP - A review of Registered Disability Education Plans will be conducted in 2011, coinciding with the three-year anniversary of the introduction of RDSPs in 2008. Bill C-3 amends the Income Tax Act and related legislation to allow beneficiaries of Registered Disability Savings Plans who have shortened life expectancies to withdraw more of their plan savings by permitting annual withdrawals without triggering the 10-year repayment rule, subject to specified limits and certain conditions. It also amends the Income Tax Act to ensure that individuals have the legal authority in all circumstances to appeal a determination concerning their eligibility for the disability tax credit.
This measure will apply after 2010 to withdrawals made after Royal Assent to the enacting legislation - this occurred on June 26, 2011. However, as a transitional rule, beneficiaries making an election under this measure may utilize their 2011 withdrawal limit in 2012 provided that the required medical certification was obtained before 2012.
CPP Enhancement - Federal, provincial and territorial governments are continuing work on options for a modest enhancement to the CPP. Any changes would require a consensus among governments and reflect the need to protect Canada's economic recovery. Provincial Finance Ministers will discuss options and concerns further at their next meeting. These meetings occur every June and December, but Minister Flaherty cancelled the June meeting in order to devote time to implementing the Federal Budget. Junior Finance Minister Ted Menzies will visit all provincial and territorial finance departments this summer instead.
ADDITIONAL EDUCATIONAL RESOURCES: Knowledge Bureau Fall Catalogue
