Registered pension plan (RPP) lump-sum payments

The following amounts can be transferred directly to another RPP, an RRSP, or a RRIF:

• an RPP lump-sum payment that you receive from your RPP;
  
• an RPP lump-sum payment that you receive from your current or former spouse's RPP or common-law partner's RPP because he or she died;

or

• an RPP lump-sum payment that you receive under a court order or written agreement relating to a division of property between you and your current or former spouse or common-law partner in settlement of rights arising from the breakdown of your relationship.

Note
Amounts cannot be transferred to an RRSP if you were over 71 (under proposed legislation) at the end of the tax year.

You and the RRSP issuer should complete and submit Form T2151, Direct Transfer of a Single Amount Under Subsection 147(19) or Section 147.3. You do not have to use this form. The institution that transfers your payment may use other forms of documentation to record the transfer. The institution has to provide you with confirmation of the details of the transfer.

Completing your tax return

If you transferred the amount directly, do not claim a deduction for the amount transferred and do not include the payment in income.

However, if you received the lump-sum payment in cash or by cheque before making the transfer, the transfer is not tax free. Report the payment on line 130 of your return in the year the payment is received.

To find out how much you can deduct, see How much can I deduct?

Typical questions

I lost my job and had my former employer transfer the amount I had paid into the company pension plan into my RRSP. Will this affect my RRSP contribution limit? Can I still contribute to my RRSP this year?