Past-service pension adjustment (PSPA)

A calculation that the Canada Revenue Agency (CRA) uses to ensure the overall limit on tax-sheltered savings is maintained.

If you do not have enough REER room to absorb the PSPA related to the transfer or the shortfall (buy-back), you may be required to withdraw money from your REER (and pay income tax on the withdrawal) to buy back the past service.

Please note that the Canada Revenue Agency (CRA) has requirements for pension adjustments (PA) when pensionable service credited under a previous employer’s pension plan is later recognized under another employer’s plan, which may affect your RRSP contribution room. We also estimate the impact on your REER room (PSPA) as part of the overall transfer estimate.