A Pension Adjustment (PA) is a value reported on your T4 tax slip that reflects the retirement benefits you earned through a workplace pension or deferred profit-sharing plan (DPSP) during the tax year.
The PA reduces your Registered Retirement Savings Plan (RRSP) contribution room to account for the tax-deferred savings already being made on your behalf by your employer.
The Pension Adjustment helps level the playing field between:
It ensures that the total amount of tax-sheltered retirement savings is roughly equal, regardless of how it’s saved.
If you're a member of a:
…you’ll see a PA on your T4 slip each year. This figure reduces your RRSP contribution room for the following year.
The calculation depends on the type of pension plan:
For example:
If your PA is $7,000, your RRSP contribution room is reduced by that amount for the next year.
Your Pension Adjustment appears in Box 52 of your T4 slip.
It’s also reported on your Notice of Assessment from the CRA, under the RRSP section.
It’s designed to keep retirement tax benefits fair and consistent
Pension splitting is a tax strategy that allows married or common-law couples in Canada to split eligible pension income for tax purposes.
Learn MoreKnowing how much you’ve saved for retirement — and where it’s coming from — helps you plan your future with confidence.
Learn MoreWhen someone dies, what happens to their pension depends on the type of pension they had and whether they had a spouse, beneficiary, or estate listed.
Learn MoreAn annuity pension is a financial product that turns a lump sum of money into a guaranteed stream of income for a set period — often for life.
Learn MoreA pension is a retirement income plan that provides regular payments to individuals after they stop working. It's designed to offer financial security in retirement by replacing a portion of your pre-retirement income.
Learn More
