The Canada RSP and The Canada RIF (registered products)

The Canada RSP

I already own a Compound-Interest CSB (or a Compound-Interest CPB). Can I transfer this bond to The Canada RSP to take advantage of the RRSP tax deduction?

Yes, if you already have an existing Canada RSP account. You can transfer all or part of your unmatured Compound-Interest Canada Savings Bonds into The Canada RSP (subject to the limits outlined by the Canada Revenue Agency). This is an easy way to take advantage of the RRSP tax deduction while continuing to benefit from the guaranteed rates on these bonds.

Simply call Customer Service to make arrangements, or call the Payroll Customer Service Support Line for a CSB purchased through the Payroll Savings Program.

Can I transfer cash held in RRSPs at other financial institutions to The Canada RSP?

Yes, if you currently have an existing Canada RSP account. Cash transfers to purchase Compound-Interest Canada Savings Bonds are permitted, but only during a sales campaign. Please visit your financial institution to have them initiate the transfer request.

Can I transfer securities from other financial institutions to The Canada RSP?

Yes, if you currently have an existing Canada RSP account. The product that you were holding inside your RRSP will change to a Compound-Interest CSB or CPB. Cash transfers to purchase Compound-Interest Canada Savings Bonds are permitted only during a sales campaign.

Can investments be exchanged within The Canada RSP?

Yes. If you are currently holding a CSB or CPB within The Canada RSP, you can redeem the old series, subject to their terms and conditions, and buy the new issue within The Canada RSP during any sales campaign by writing to the Trustee.

Can I transfer out of The Canada RSP?

You can transfer out of a CSB and or CPB from The Canada RSP to another registered plan, usually a Self-Directed Plan, at any time. You can also redeem your CSB and CPB subject to their terms and conditions and transfer the cash proceeds to another RRSP or to a RRIF (Registered Retirement Income Fund). Simply contact Customer Service.

Can I withdraw from The Canada RSP?

Yes. You can redeem your CSB and your CPB subject to their terms and conditions and withdraw the amount from The Canada RSP. As with all RRSPs, tax will be withheld from the proceeds and you will have to declare the proceeds as income in the year in which the CSB or the CPB is withdrawn.

How can I redeem my CSB or CPB held in The Canada RSP?

The CSB and the CPB can be redeemed subject to their terms and conditions by calling Customer Service or writing to the Trustee.

What happens to my CSB and CPB investments in The Canada RSP when I reach the age of 71?

If you do not provide written instructions to the Trustee and you have a minimum balance in The Canada RSP of $500, they will automatically transfer the investments in The Canada RSP to The Canada RIF to avoid having you pay tax on the total proceeds.

The RRIF will be set up in such a way that you will receive the annual minimum amount required to be withdrawn in one periodic payment on 1 December of each year until you provide the Trustee with alternate instructions. If your balance is less than $500 the Trustee will cash out your investment, deduct withholding taxes and send you the remainder of the funds. A notice will be sent to you by the Trustee a minimum of 90 days prior to 31 December of the year in which you turn 71 advising you of these upcoming events.

What happens when my CSB and CPB investments in The Canada RSP mature?

Unless you advise the Trustee, the bonds will be automatically rolled over and the proceeds reinvested in a similar Government of Canada investment product available at that time. The Trustee will notify you before any investments in your plan mature.

How often are statements for The Canada RSP issued?

Statements of account will be issued by the Trustee on a semi-annual basis, as of 30 June and 31 December.

How do I contact the Trustee?

Contact Customer Service or Payroll Customer Service.

The Canada RIF

Can I transfer cash held in RRSPs or RRIFs at financial institutions into The Canada RIF?

Yes, however you must already have an existing plan. You can do so only during a bond sales campaign period (i.e., from early October to 1 December). Cash received during this period will be used to purchase a Compound-Interest CSB or CPB. Please visit your financial institution to initiate the transfer.

How can I transfer my RRSP or RRIF from my financial institution to The Canada RIF?

If you have an existing Canada RIF account, you will need to contact Customer Service.

Can I transfer securities from other financial institutions to The Canada RIF?

Yes, if you have an existing plan. The product you were holding inside your RRIF will change to a Compound-Interest CSB or CPB.

How do I transfer bonds from The Canada RSP to The Canada RIF?

Contact Customer Service or Payroll Customer Service.

Can I contribute directly to The Canada RIF?

No. You can only transfer existing RRSP or RRIF proceeds into The Canada RIF and hold Compound-Interest Canada Savings Bonds (the CSB and the CPB) in this plan.

What is the minimum purchase within The Canada RIF?

The minimum purchase amount of a CSB or CPB within The Canada RIF is $500 per bond series. However, you must already have an existing Canada RIF plan.

Can I transfer bonds from The Canada RIF to another RRIF/RRSP at a financial institution?

Yes. You may transfer your bonds “in-kind” from The Canada RIF to other registered plans at any time. You can also redeem your Canada Savings Bonds (subject to their terms and conditions) and transfer the cash proceeds to another RRSP/RRIF. Please visit your financial institution to have them initiate the transfer request.

Can investments be exchanged within The Canada RIF?

Yes. If you are currently holding a CSB or CPB within The Canada RIF, you can redeem the old series (subject to their terms and conditions) and buy the new issue within The Canada RIF during any sales period (i.e., from early October to 1 December). To do this, contact the Trustee in writing.

How are regular periodic payments made?

Payments are made by electronic transfer to your bank account, or by cheque mailed to the address specified by you. Periodic payments are issued for the first business day of the month and they are taxable.

Is there a minimum payment amount?

Yes. The annual minimum amount withdrawn must meet the legislated minimum required by the Income Tax Act (Canada). The Canada RIF also has a minimum of $25 per payment. You can elect to receive more than the legislated annual minimum amount.

What if my payments don’t meet the annual minimum requirement?

In this case, an additional payment will automatically be made by 31 December to satisfy the legislative requirement.

How will I know what my annual minimum payments will be each year?

Your 31 December statement, usually mailed no later than the third week of January, will provide you with this information.

Why would I use my spouse’s birthdate to calculate my annual minimum payment?

If your spouse is younger, the legislated annual minimum payment will be lower; therefore, both the continued tax deferral of the proceeds within the RRIF and the amount of income it earns within the RRIF would be greater.

Can I receive my payments at any time?

You can opt to receive your payments every month, or every two, three, four, six or 12 months. Periodic payments are issued for the first business day of the month.

Can I change my payment amount or my payment frequency?

Yes. You can change your payment amount or frequency at any time by giving a written notice to the Trustee as long as the minimum $25 per payment and legislated annual minimum amount are met.

Can I make more than one lump sum withdrawal each year?

Withdrawals can be made at any time (subject to the terms and conditions of the individual bonds) by writing to the Trustee. Lump sum withdrawals are subject to a withholding tax.

Can I receive my first periodic payment in December of this year?

Yes. Simply submit a written request to the Trustee.

Can I specify which assets are to be depleted first to make payments?

For regular periodic payments, you cannot instruct which assets are to be used. Because of their different liquidity features, payments will be taken from the CSB first, followed by the CPB.

Within each bond category, payments are taken out of the bond with the lowest yield. If two or more bonds have equally low yields, then payments are taken out of the bond with the lowest interest rate. If two or more bonds have equally low yields and interest rates, then payments are taken out of the bond with the shortest term to maturity. Payments are taken from both principal and interest on a pro-rated basis.For lump sum withdrawals, you can request a specific bond from which to take the withdrawal (subject to the terms and conditions of the individual bonds). Payments made are taken from both principal and interest on a pro-rated basis.

Are periodic payments subject to tax?

Yes. They are subject to federal and provincial income tax in the year received. If your marginal tax rate is higher than the withholding tax rate, you will likely owe further income tax when you file your tax return. Withholding tax deducted at source can be reported as income tax paid during the year on your tax return.

Will I receive RRIF statements showing account balances?

Quarterly statements of account will be produced as of 31 March, 30 June, 30 September and 31 December. The 31 December statement will outline the payment details for the following year.

How do I contact the Trustee?

By contacting Customer Service or Payroll Customer Service.