Path: utzoo!mnetor!micomvax!ray
From: ray@micomvax.UUCP (Ray Dunn)
Newsgroups: can.general
Subject: Re: income tax tips #13: RRSPs
Message-ID: <927@micomvax.UUCP>
Date: 7 Mar 88 19:56:44 GMT
References: <1988Feb18.123536.23901@lsuc.uucp> <923@micomvax.UUCP> <1988Mar4.010232.3244@lsuc.uucp>
Reply-To: ray@micomvax.UUCP (Ray Dunn)
Distribution: can
Organization: Philips Electronics Ltd. (TDS - Montreal) St. Laurent P.Q., Canada
Lines: 40

In article <1988Mar4.010232.3244@lsuc.uucp> dave@lsuc.uucp (David Sherman)
responds to my comments about his tax article:

DS ...  The $7,500 limitation
DS applies if you are not a member of a company pension plan.  If you
DS are, your limit is $3,500 minus any contributions you make to the
DS pension plan
 
ME How can anyone afford to be in a company pension plan?  It has to be a
ME bloody good plan before it is worthwhile relinquishing the $4000 extra RRSP
ME contribution availability.

DS Actually, you have it backwards.  The tax assistance provided to
DS pension plans (taking the employer contribution into account), based
DS on the most common defined-benefit plans, can only be equalled for
DS taxpayers without access to a private pension plan by allowing
DS tax-deferred RRSP savings of about $15,500 per year.  That's where
DS the increased RRSP limits are headed, though the timetable has been
DS put off several times because of the immediate revenue effects on
DS the treasury.  The current schedule calls for it to become $15,500
DS in 1995.

DS etc.....

David.  Lets have some numbers!  Its very easy and not too useful to post
these generalizations.  These we can read in the advertising bumph of any
bank or trust company.  Can we have some examples of break even points in
company/employee contributions to a pension plan, and a maximum contribution
to an RRSP.  There are also of course some intangibles which make the
decision more complex. e.g. how long are you tied to the company to have
full vested interest in the company's contributions - how much FULL control
of your investment is worth to you - how much faith you have in your
compny's pension officers - whether you can believe that the conditions will
not be changed under you at some later date etc etc, but there presumably ARE
some basic ball park algorithms that can be used.

Ifyou don't feel able/willing to share this information, can you point us to
the relevant information documents, if any?

Ray Dunn.  ..{mnetor, musocs, philabs}!micomvax!ray