On May 20, 2021, the Department of Finance announced a one-year extension of draft regulations providing temporary relief to employers who sponsor a Registered Pension Plan (“RPP”) or deferred salary leave plan (“DSLP”) and their participating employees. Initially released on July 2, 2020, the temporary relief measures are intended to ensure that employees and employers participating in RPPs and DSLPs are less negatively impacted by COVID-19 .
The particulars of the proposed relief to be implemented by way of various temporary amendments to the Income Tax Regulations include:
- adding temporary “stop-the clock” rules to the conditions applicable to DSLPs for the period from March 15, 2020 to April 30, 2022;
- relaxing restrictions that prohibit an RPP from borrowing money;
- allowing catch-up payments to RPPs until April 30, 2022 in respect of contributions relating to 2020 and 2021;
- waiving the requirement for 36 months of employment to qualify for an “eligible period of reduced pay”; and
- allowing 100% of an employee’s normal wages to be recognized in calculating permissible pension contributions despite any wage rollback or reduced pay period.