Summary of Issue: Transfer To RRSP

Decision 76459 Full Text of Decision 76459

Following a wrongful dismissal complaint, the employer gave the claimant $9,500 in severance pay, comparable to a retirement allowance. The amount was placed in an RRSP in the form of a locked-in retirement account (LIRA). When informed of the payment to the claimant, the Commission determined that it constituted earnings that must be allocated under sections 35 and 36 of the Regulations. The reason for the payment and not its date that determines to what weeks the payment must be allocated. The appeal by the commission is allowed by the Umpire.

Decision 67176 Full Text of Decision 67176

The critical factors are the reason for the payment and the fact that it was paid or payable, not the use to which the employee chooses to put it. The mere fact that a cheque was issued by the employer to the bank on his behalf does not prove the RRSP was "non-commutable". The Commission maintains the evidence in this case clearly shows that the monies were part of a severance package and not a transfer of pension into a non-commutable RRSP. See also CUB 66442.