How is a Pension Adjustment (PA) calculated?
The PA reduces the member’s RRSP contribution room in the following calendar year. DC Plans can provide a maximum tax-sheltered contribution of 18% of earnings up to $20,000 in 2007, $21,000 in 2008, $22,000 in 2009, and indexed to the increase in the average industrial wage after 2009. The maximum dollar contribution limit for RRSP is always one year behind the maximum dollar contribution limit for DC Plans to allow for the lag in the reduction of RRSP deduction limit resulting from the reporting of the PA. For a DC Plan, the PA equals the actual contributions made to the member’s credit during a calendar year, up to a dollar maximum. DB Plans can provide a maximum annual pension equal to 2% of earnings up to a dollar limit of $2,222.22 in 2007, $2,333.33 in 2008, $2,444.44 in 2009, and indexed to the increase in the average industrial wage after 2009. For a DB Plan, the PA equals 9 times the member’s pension accrual during a calendar year less $600, up to a dollar maximum.
The PA reduces the members RRSP contribution room in the following calendar year. DC Plans can provide a maximum tax-sheltered contribution of 18% of earnings up to $21,000 in 2008, $22,000 in 2009, and indexed to the increase in the average industrial wage after 2009. The maximum dollar contribution limit for RRSP is always one year behind the maximum dollar contribution limit for DC Plans to allow for the lag in the reduction of RRSP deduction limit resulting from the reporting of the PA. For a DC Plan, the PA equals the actual contributions made to the members credit during a calendar year, up to a dollar maximum. DB Plans can provide a maximum annual pension equal to 2% of earnings up to a dollar limit of $2,333.33 in 2008, $2,444.44 in 2009, and indexed to the increase in the average industrial wage after 2009. For a DB Plan, the PA equals 9 times the members pension accrual during a calendar year less $600, up to a dollar maximum. The IPP provides an annual pension equal to 2% of
