Declaration of Trust - The Canada RSP
In this declaration of trust:
- your plan means The Canada RSP that you own;
- you means the person named on this application as the owner of the plan. The owner is the annuitant of the plan as defined in subsection 146(1) of the Act.
- the Trustee means The Canada Trust Company and its successor;
- the Act means the Income Tax Act (Canada);
- applicable laws means the Act and any provincial income tax legislation that applies to your plan;
- bond means any Government of Canada bond (Canada Savings Bonds (CSB) or Canada Premium Bonds (CPB)) eligible to be held in your plan including interest
- spouse means the individual recognized as the spouse under the Income Tax Act and shall include common-law partner as defined in the Act.
About This Declaration of Trust
The Trustee agrees to act as the trustee for your plan under the terms described below.
What the Trustee Will Do Under Your Plan
The Trustee will apply for registration of your plan as a Registered Retirement Savings Plan (RRSP) under the Act. Your plan and this declaration of trust are governed by the Act and any provincial laws that may apply. The Trustee will comply with all applicable laws.
The Trustee’s Responsibilities
You authorize the Trustee to appoint an agent to provide such services and assistance as the Trustee requires. The Trustee is ultimately responsible for the administration of your plan. In the case of any liability connected to your plan, your recourse is limited to the bonds in your plan. The Trustee and the annuitant are both responsible to ensure that the choice of bonds are qualified and remain qualified for an RRSP under the applicable laws.
The Trustee will open and maintain a plan in your name. You certify that your date of birth on the original application is accurate. The Trustee agrees to hold your bonds as well as any interest your plan earns and proceeds from matured bonds.
The Trustee will send you any documentation required under applicable laws. At least once a year, they will send you a statement showing the bonds in your plan.
The Trustee will invest in the bonds as you directed. If this is not possible, and subject to the third paragraph in this section below with respect to bonds maturing in November and December 2021, the Trustee will invest in the bonds that are, in their sole discretion, most similar to the ones you directed.
The Trustee will give you notice when any bonds in your plan are to mature. They will automatically reinvest the proceeds in the next available bond series, unless you give them written instructions on or before such maturity. If more than one type of bond is available, they will reinvest the proceeds in the bond that is, in their sole discretion, most similar to the one that matured.
Bonds maturing in the November and December 2021 timeframe will have no further reinvestment and will no longer earn interest. Following such time, the Trustee will continue to hold your bonds in the plan pending your instructions.
The Trustee will pay out of your plan any taxes or other assessments that may be due under any applicable laws. When you make a withdrawal from your plan, they may withhold any taxes, penalties, or assessments that you owe. They will also withhold additional income tax if you tell them in writing. Any withdrawals from your plan are subject to income tax in the year they are withdrawn.
If you ask the Trustee in writing, they will redeem some of the bonds in your plan and pay to you the amount of money to reduce the amount of tax which would otherwise have to be paid under Part X.1 of the Act. This section of the Act covers what happens if contributions exceed the amount allowed by law to RRSPs.
Changes to your plan
The Trustee can make changes to your plan or this declaration of trust if they get the consent of the Minister of National Revenue and, if required, any provincial tax authorities who have jurisdiction. They will give you at least 30 days prior written notice, unless such changes are necessary for your plan to be in compliance with the applicable laws. They will not make any changes to your plan if the changes would disqualify it as an RRSP.
No additional contributions or tansfers
As of November 1, 2017, there are no new contributions or transfers-in permitted to The Canada RSP accounts.
What you can do under your plan
Withdrawals and transfers out of your plan
Subject to the terms and conditions of your bonds, you may withdraw all or part of the cash in your plan or transfer the bonds to a registered retirement savings plan or registered retirement income fund under which you are the annuitant. The Trustee may only make payments or transfers that are allowed under the applicable laws. Withdrawals may be done by telephone or in writing. You must give them verbal or written instructions and any other documents they may require. If you do not tell them which bonds you would like to cash or transfer, they will choose, in their sole discretion, the appropriate bonds.
You may also tell the Trustee in writing to transfer all or part of the bonds or cash in your plan to a RRIF or RRSP of your spouse or former spouse if the bonds have been awarded as part of a division of property between the two of you arising out of marriage or relationship breakdown. In this case, you must give the Trustee details of the division of property by providing a written separation agreement or a decree, order or judgement from a court with the proper authority.
The Trustee will process your requests in a timely manner. No interest is paid on any amounts you withdraw from your plan after the date that the Trustee processes the withdrawal request.
What happens when you reach the age of 71
Your plan automatically matures on the last business day of the year in which you reach age 71, unless a different age is specified in the applicable laws. You may transfer your plan to a retirement income plan allowed under the Act, such as a Registered Retirement Income Fund (RRIF), purchase an annuity, which will result in payments that are equal and at least annual, or cash out your plan and pay taxes on the proceeds, any time up to the maturity date of the plan by giving the Trustee reasonable notice in writing. If you choose to convert your plan to a retirement income plan, the company you choose must be authorized to issue retirement income plans under the Act.
The Trustee will send you a plan maturity notice at least 90 days prior to maturity. If you do not give them your instructions by the maturity date, they will do one of the following:
- if the value of your plan is less than $500, they will deduct any taxes and pay you the balance of your plan, or
- if the value of your plan is $500 or more, they will convert your plan to The Canada RIF and pay you a retirement income on an annual basis starting in December of the year after you reach the age of 71.
You may receive retirement income in any form that is permitted by the Act, subject to the following:
- you and, where applicable, your spouse agree to give the Trustee any proof of age and any other information they may require to pay you a retirement income
- you will only receive your retirement income until all the money has been paid
- if you elected for the continuation of retirement income after your death, the aggregate annual amount of retirement income payable for any calendar year after your death shall not exceed the aggregate amount of retirement income payable for any calendar year before your death
- your retirement income shall be commuted to the extent that it becomes payable to a person other than you or your spouse.
What happens if you die
If you die before your plan matures, the Trustee will pay the balance of your plan to your beneficiary, if there is one, or to your estate. Once they receive proof of your death and any other documents they may require, they will redeem the investments in your plan, deduct any taxes, and pay the balance in a lump sum.
When allowed by applicable laws and by telling the Trustee in writing, you may:
- name a beneficiary to receive the value of your plan, and
- change your beneficiary at any time.
What happens if the Trustee stops acting as trustee
If the Trustee merges with another corporation or another corporation acquires most or all of their trust business, that corporation will automatically become the new trustee as long as your plan continues to qualify as an RRSP.
If the Trustee resigns or is replaced as trustee, a new trustee may be appointed by the Bank of Canada and the Trustee will deliver the investments held in your plan and your records to the new trustee.
You may send any instructions to the Trustee in writing by delivering or mailing them to their head office. Your notice of the instructions will be deemed to be delivered on the day the Trustee receives it.
The Trustee will send any notices to you at the address on this application or the most recent address shown in their records. Their notice will be deemed to be delivered on the day they mail it.