How PARs Can Affect Your RRSP Room

To understand a PAR, you need first to understand pension adjustment (PAs) and past service pension adjustment (PSPAs).

Each year, the federal government requires your employer to calculate a pension adjustment (PA) for you. The PA is the deemed value of benefits you earned that year in HOOPP. If your benefits are improved retroactively – or when you purchase past service – a past service pension adjustment (PSPA) is calculated by HOOPP, to reflect the value of the new benefits you've received that year.

The government then calculates your RRSP room for that year, minus any PA and PSPA you received.

Since 1997, members choosing to terminate their HOOPP membership and transfer all of their entitlements out of the Plan may have received a pension adjustment reversal (PAR). You'll get a PAR if the commuted value of your termination benefit, plus any refundable contribution, (for service after 1989) is less than the sum of all the PAs and PSPAs you've received related to that service.

HOOPP will do the calculation if you transfer your benefits out of the Plan on termination.

If you get a PAR, the government will credit you with additional RRSP room equal to the PAR amount.