Transfer of Cross-Border Pensions To Your RRSP

Below is a CRA confirmation of this.

Numerous immigrants to Canada or those residing in Canada but have worked for say U.S. employers have entitlements to U.S. pensions such as 401K plans and in some circumstances they have U.S. IRAs. The Income Tax Act has provisions to allow transfers including a claim for any U.S. withholding tax or for applicable early withdrawal penalties.

Examination of both the U.S. and Canadian tax provisions should be dealt with before any transfer takes place to ensure the rollover is available in Canada.


In a technical interpretation, the CRA confirmed that a taxpayer was entitled to transfer a lump sum from a “compte de libre passage 2e pilier” (a “pillar 2 vested benefits account”) to his or her registered retirement savings plan (RRSP).

The taxpayer had been resident in Switzerland and a member of a Swiss pension plan. When his or her employment ended, the taxpayer’s balance in the plan was transferred to a pillar 2 vested benefits account, maintained by a Swiss institution. The taxpayer was now resident in Canada.

The CRA advised that s. 60(j) of the Income Tax Act (the “Act”) provides generally that an amount can be transferred to an RRSP if:

(1) the foreign plan is a superannuation or pension plan, which is a question of fact;

(2) the amount transferred is a lump sum and not a periodic payment;

(3) the benefits accrued under the plan are attributable to period of employment during which the beneficiary was not resident in Canada; and

(4) the amount transferred is not otherwise exempt from Canadian tax.

The CRA confirmed its view that the transfer from the pillar 2 vested benefits account meets these criteria. The amount transferred should be included in the taxpayer’s income, and an offsetting deduction is available to the extent the transfer is contributed to an RRSP no later than 60 days following the end of the year of receipt.

— Deferred Income Plans Section, Financial Industries and Trusts Division, External Technical Interpretation, May 21, 2015, Document No. 2015-0566911E5

Original Post By:  Larry Stolberg


Larry Stolberg, CPA, CA, CPA (South Carolina), has been practicing as a full-time tax specialist for over 30 years, in the Toronto, Ontario Canada and surrounding GTA area with primary emphasis on:

•Corporate restructuring for business owners
•Estate/succession planning
•U.S. expatriate and cross border issues
•Tax efficient planning that will achieve both your short and long term objectives

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