Federal Bill C-47 passed and received Royal Assent

on June 22, 2023

Federal Bill C-47 passed and received Royal Assent on June 22, 2023.

The process of correcting contribution errors in defined contribution (DC) pension plans is now law.

Correcting missed contribution errors

Missed contribution errors in DC plans arise, for example, when an eligible employee who should have joined a pension plan in accordance with the plan rules and have contributions started is not enrolled, or when contributions that should have been made for a member during a leave of absence have been missed. There are other examples.

The new rules permit employers and members to correct missed contributions through a tax deductible “permitted corrective contribution” (PCC). The PCC follows a newly created separate limit, it is not subject to the annual Tax Act contribution limits.

Important rules

The upper PCC limit is 150% of the money purchase limit in the year the PCC is contributed (i.e. 150% x $31,560 in 2023 = $47,340), less any prior PCCs for the individual. An employer may make reasonable investment returns on the missed contributions, in addition to this limit.

Note: A PCC can be made only for missed member or employer required contributions (not voluntary contribution), in accordance with the pension plan of the employer or a predecessor employer. The error must also have occurred in one of the 10 years before the year the PCC is contributed.

Plan administrators are required to report PCC using the prescribed information return form T215 within 120 days following the day the missed contributions are remitted in the plan. This measure would apply in respect of additional contributions made in the 2021 and subsequent taxation years.

Correcting over-contribution errors

Over-contribution errors arise, for example, when certain compensations are mistakenly considered as pensionable earnings or when the contributions exceed the plan contribution limit or CRA limit.

The new rules allow for “pension adjustment correction” (PAC). The PAC involves refunding over-contributions from the plan where the refund is required to avoid revocation of the plan’s registration. The refund will restore (or increase) the employee’s lost RRSP deduction limit.

Important rules

The refund must relate to one or more of the 10 years immediately preceding the calendar year in which the plan provides the refund. Plan administrators are required to report PAC using the T10 prescribed information return no later than 60 days after the end of the quarter in which the refund was made. If the refund occurs in the fourth quarter of a calendar year, the T10 must be filed before February of the following calendar year. This measure would apply in respect of amounts of over-contributions refunded, in the 2021 and subsequent taxation years.


The changes are deemed to have come into force on January 1, 2021, such that a plan administrator is permitted to have made a PPC or PAC prior to June 22, 2023.