Pay with RRSPs
While we recommend paying for as much of your buyback as possible in cash, you can also pay for all or a portion of your buyback by RRSP. Here are a few things to keep in mind:
- There's no tax deduction for payments made by RRSP transfer.
When you transfer funds from an RRSP to pay for a buyback, you are simply moving funds from one tax-sheltered registered retirement plan to another. Since it's a direct transfer, it's not eligible for a tax receipt or deduction.
- You cannot repay the transferred amount to your RRSP.
- Most financial institutions charge administrative fees for RRSP transfers.
If the cost of your buyback isn't very high, an RRSP transfer might not be worth it at all.
- The processing time varies, but you can count on at least a couple of weeks.
If you are near your buyback's deadline, you should ask your financial institution to expedite your request.
To transfer funds from your RRSP:
- Complete the T2033 Direct Transfer form with your financial institution.
- Have them mail the form with the transferred funds to:
Ontario Teachers' Pension Plan
5650 Yonge Street
Toronto ON M2M 4H5