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My employer (a big bank in Canada) has a pension plan where I am allowed to make optional contributions. There is no matching contribution from the employer, but they do already contribute a tiny amount to this pension plan while permitting employees to contribute more.

The plan is different from an RRSP.

My question is: is the contribution I make going to be tax deductible?

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Depending on the type of pension, you should receive a pension adjustment amount on your T4 for the year. This will be deducted from your income on line 206 on your T1 and functions like an RRSP deduction. The calculation of the pension adjustment is a separate topic, but note that (for defined benefit plans) it is intended to be equivalent to the deduction you would be entitled to if you contributed to an RRSP instead of the pension.

  • Ok thanks. So from tax purposes, it is the same if i contribute to the employer pension or to the rrsp? Since both use up my rrsp room? – Victor123 Apr 6 '15 at 18:57
  • Not necessarily. Opinions vary on the pros and cons of contributing to a pension vs an RRSP. I would suggest starting a new question for this and perhaps someone else may have a detailed answer. – fideli Apr 6 '15 at 19:30

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