What is a Qualifying Transfer?
Prior service can be bought using funds from an existing RRSP or Locked-In Retirement Account (LIRA). This type of transaction is called a Qualifying Transfer and will reduce your PSPA by the value of the funds transferred from the RRSP or LIRA. This means you can reduce or even eliminate the amount of RRSP contribution room taken up by buying prior service. If you wish to make a Qualifying Transfer, be sure to indicate on your Buyback Election the amount you will be transferring from your RRSP or LIRA.
Timing is Important
If the Qualifying Transfer is not the only payment you will be making to buy the prior service, it should be the first one received. All payments must be received before the due date shown on the Buyback Proposal.
We will adjust the PSPA before sending it to CRA which will help you maximize your RRSP contribution room. If any other payment is received by us before the transfer of registered funds, the full PSPA will be reported to CRA.