If you overcontribute to a plan member’s deferred profit sharing plan (DPSP) and need to request a refund, we’ve changed our process. These changes are based on Government of Canada income tax regulations 8301 (2) and (2.1). Depending on when you make your request and the plan member’s pension credit, here’s what you’ll need to do.
For overcontributions made within a calendar year, if you request a refund by the end of January of the next calendar year, there are three requirements you’ll need to confirm within the refund request you send us:
- The plan member’s pension credit is equal to or less than 50% of the money purchase limit for the calendar year.
- The plan member’s pension credit is greater than 18% of the amount that would be their compensation for the calendar year (as defined in subsection 147.1(1) of the Income Tax Act (excluding paragraph (b) of that definition).
- The plan member’s pension credit is equal to or less than 18% of the amount that would be their compensation for the preceding calendar year as defined in subsection 147.1(1) of the Income Tax Act (excluding paragraph (b) of that definition).
Option 2 applies to:
- Requests made after the end of January of the next calendar year
- Requests that don’t meet all three requirements (listed in option 1, above)
In either of these two situations, please send a letter to the CRA Registered Plans Directorate to explain the reason for the overcontribution so that the CRA can work with you to bring your plan back into compliance. Depending on the reason for the excess contributions, the CRA may allow (on an administrative basis) a refund of the excess contributions. To write your letter, you may want to consult a legal or tax professional.
When your letter is complete, please mail it to:
Registered Plan Directorate
Canada Revenue Agency
875 Heron Road
If the CRA approves the refund of the overcontribution, please include their written response when you send us your refund request.
For more information about fixing errors in a DPSP, please visit the Government of Canada website. For any additional questions, please contact your GRS representative