Consultation Sessions on the Reengineering
of the Registered Plans Directorate
February 19 to March 3, 2004

As part of its reengineering exercise, the Registered Plans Directorate (RPD) held consultation sessions with some of its retirement savings plan (RSP) and retirement income fund (RIF) clients in Vancouver, Calgary, Toronto and Montréal, between February 19 and March 3, 2004. What follows is a summary of these sessions. Please note that we have listed the questions in yellow and included a summary of the answers and comments provided by those who attended.

Systems, electronic commerce and use of the Internet

Answers and comments on systems, electronic commerce and use of the Internet:

• Clients would like to know whether XML is going to be the new standard format across the Canada Revenue Agency (CRA). They like XML and would like to submit everything in the same format. It would be easier for them to support their systems.
• They would like to know whether XML is going to eventually be used for filing the T550 form for registration of contracts.
• Has the CRA considered going on-line for the registration of contracts versus filing on CD, similar to what is done at Human Resources Development Canada (HRDC)?
• RPD should consider creating an electronic bulletin to advise of changes or to provide a notice of changes to procedures similar to the bulletins that are provided by the Mutual Fund Dealers Association and HRDC for registered education savings plans (RESPs).
• If an electronic standard was established, there should be a specific IT person to contact for technical support.
• The industry typically deals with software providers. The software providers will not make any software changes until new legislation has been passed or notification is received from the CRA. It is imperative that RPD's administrative position or relevant information is made available on the Web site as soon as possible.
• A joint effort (consultation) between industry groups and the CRA regarding systems and electronic capabilities is a good idea.
• Some clients would prefer to send Word documents so that RPD could make the required changes in revision mode and send it back to them electronically.
• RPD should make exceptions to electronic filing for smaller-sized companies (they should be able to file paper copies).
• Clients would like to submit documents by email, in PDF format (sending letters back and forth is time-consuming).
• The clients would like one reference sheet, contact sheet or organization chart so that they can direct their questions to the most appropriate source.
• Clients would like T3GR fillable forms.
• They would like to submit RSP contract listings electronically, which would allow submissions on a daily basis.
• Clients would like to be able to communicate with us by email and they would like a central address that they could send enquiries to and get a response from.
• Clients would like to see requests for administrative relief handled by email, similar to the way HRDC handles these situations.
• There is no industry standard and if RPD were to suggest an electronic system, it should not be complex and the specifications set should be clear, easy to implement and cost-effective so that the small companies could come on board.
• The Web site is good for forms and guides.
• The Web site contains good information but the information is often outdated and the delays in providing current information are too long.
• The CRA Web site's search engine is not easy to navigate and it is hard to find what you're looking for. The IRS Web site, by comparison, is very friendly, easy to search and you can submit information on their Web site very quickly.
• Clients also suggested that RPD create a secure Web site for sensitive or confidential issues where clients could be issued passwords for access.
• Clients suggested that RPD establish an email address on the Web site where they could direct questions. The questions could then be directed to the appropriate area for response.
• They would like RPD's Web site to contain links to legislative changes (to the Web sites of the Department of Finance and the Department of Justice). RPD should also link to the Assessment and Collections' site.
• They would like RPD to post a list of the most frequently requested amendments, areas of concern, etc., on the Web site.

Self-assessment

This would essentially allow clients to file documents without immediate review by RPD.

Answers and comments on self-assessment:

• Clients indicated that the initial review of new documents was important but that subsequent reviews could be done as necessary (for example, yearly).
• Clients stated that they do rely on some of the review but that RPD's input did not have much impact.
• Other clients stated that RPD's initial review and approval has no effect on how the plans are being administered.
• Clients indicated that RPD should not do a complete file review every time they submit an amendment.
• Clients feel confident that the documents they send comply. They have internal controls in place to monitor compliance.
• The changes that clients make to their specimen plans for the most part are minor changes with little or no compliance impact.
• When the legislation changes, RPD should provide suggested wording for amendments.
• RPD should provide a template or checksheet of its requirements or concerns, similar to what is provided by the provinces. Alternatively, RPD could enhance the information circulars to specify the requirements.
• RPD should create a standard specimen plan similar to the current standard addenda, incorporating all RPD requirements under the Income Tax Act (ITA). Clients also suggested that RPD work with them to determine what prototype plans should look like.
• Clients would like an outline of the requirements/responsibilities of the issuer with regard to filing and reporting. This can include referencing interpretation bulletins, information circulars, internal checksheets or other general information.
• If RPD is going to rely increasingly on self-assessment by the industry, it should provide templates, pro formas or boilerplates of generic plan terms in plain language. RPD should also provide check sheets and outline our areas of concern. The provinces currently do that for addenda. Alberta and Nova Scotia provide generic plan terms on their Web site.
• Clients stated that RPD must provide specific information on the charging of fees and it must have specific standards on the application of fees.
• Why does RPD allow boilerplates for RSPs and RIFs, but not for RESPs?
• If RPD moves towards greater reliance on self-assessment, it should have specific requirements based upon the type of client, i.e., trustee, agent, etc.
• RPD must commit to ensuring information provided to the industry is current.

Answers and comments on fee-for-service/expectations/cost to clients:

• Clients expressed a willingness to consider a fee-for-service program (on a cost-recovery basis), given the parameters identified above, for plans that are created outside the prototype.
• Clients stated that they would support a fee-for-service program provided the fees were reasonable and there was a faster turnaround time (5 business days). Within the five business days the clients would expect that their issue would be reviewed and discussed with them, preferably by email.
• If RPD moves to more self-assessment, it should guarantee a turnaround time, i.e., 3-4 weeks, depending upon the submission. The turnaround time could be negotiated up front.
• Client wanted RPD to be aware that when it requests changes to a specimen plan, there is a cost to them for printing and mailing of the notification to annuitants.
• When RPD asks for minor amendments and clients' documents are already printed, they are not sure whether they have to re-print the documents.
• Some clients were not receptive to the fee-for-service option because they think that everyone will end up paying just to get to the front of the line. The trustee clients will end up footing the bill.

Certifications of compliance

Answers and comments on certifications of compliance:

• The clients are interested in the certifications of compliance and they believe that one individual per institution could certify the information, provided they are given complete outlined information on RPD's requirements.
• In practice, compliance attestations have been implemented and are rolled up on a quarterly basis. Certifications of compliance could be rolled up to the CRA as well.
• Some clients feel that certifications would not work for RSP/RIF.
• The clients want RPD to ensure that there is consistent application of the rules for everyone (i.e., no one is given preference).
• Clients stated that if there were penalties, everyone should be subject to the penalties but that the penalty should be relative to the size of the organization.
• Clients also suggested that the penalties need not be a monetary value, rather, RPD would no longer register any new contracts under any specimen plans from that institution until they were compliant.
• Clients suggested that they could draft an agreement with RPD, specifying the responsibilities for each side. This agreement would be more binding.
• Would certification be based on corporate (trustee) certification? Would more detailed certification be required for each of the agents?
• Certifications of compliance would have to be different based upon the nature of the organization (i.e., depositary/non-depositary).
• Certification would have to be from the trustee, since they are ultimately responsible for the plans.
• Certifications of compliance would be good from the trustee's perspective since they are the ones looking for the CRA's approval.
• If RPD requests amendments, problem and significant costs are expected since clients would have to notify all annuitants.
• RPD should not insist that minor amendments be done right away, rather they could be done when the plan is next amended.
• Some clients have focused on writing their documents in plain language for the benefit of their clients and RPD does not take this into consideration when they ask for amendments.
• The clients would be interested in the certification of compliance provided RPD gives them a specific list of all areas of concern, identify all the required elements and that they are only certifying that it complies with the listed requirements.
• Clients requested that they have the ability to make changes to the plan without RPD prior approval.

Information and education

Answers and comments on information and education (Web site):

• Clients would like to register on RPD's Web site to be on a mailing list for any new information. However, they also said that this could cause an issue for them, so they would like to be able to control access by their staff, agents, and individuals.
• When RPD is providing information to the industry or notifying them of changes, RPD must provide specific, clear examples.
• Clients would like an option to have a section on the Web site specific to them where they can access by password. This password would entitle them to access information regarding their plans that RPD has registered or approved and would allow them to query the status of requests submitted.
• Would like to see a "What's New" or "Hot Topics" selection on the Web site.
• When new documents are published, RPD should provide a link to the Web site, especially for the larger documents.
• When changes are made on the Web site that affect publications, the clients would also like a copy mailed to the RSP group of their institution.
• Clients access the Web site regularly.
• Clients would like RPD to be more proactive. They would like proper notification in advance, for example, of changes that would affect business practices. Perhaps RPD could create a pilot group to test the changes prior to implementation.
• There is a delay in putting information on the Web site.
• Clients would like training information with regard to RPD's administrative procedures available on the Web site.
• More information and examples with regard to administrative procedure (for example, Q & A on spousal designation).
• The spousal information Q& A session at the last consultation session was very useful. There was open discussion at the forum and the information was provided in a timely manner.
• RPD should post information relating to changes in procedures. A "one-pager" would be quick to translate and post.

Answers and comments on preferred method receiving information/consulting:

• Clients would like to receive information electronically, via e-mail, and information should be directed to more than one person within the institution.
• Changes, new procedures, new documents, should be communicated to the industry in a timely manner and not only by way of the Web site. Clients feel that they are not properly informed of changes.
• Clients would accept "draft" versions of consultation minutes rather than wait for the translated final versions.
• RPD should consider establishing a contact area for promoters and issuers to call or fax.
• Clients would prefer to have someone call them back rather than have their call re-directed.
• Clients would like to be consulted on agenda issues for the consultation sessions.
• More consultations between the industry and CRA are desired. RPD could also announce upcoming consultations by posting them on the Web site.
• When there are major legislative changes, RPD should hold consultation/information sessions to discuss these within a few weeks.
• Clients are aware of a recourse mechanism but prefer to resolve the issue with the analyst because they would like to maintain the rapport with the analyst. If the issue cannot be resolved they will talk to the analyst's manager.
• Other clients don't know specific details of the recourse mechanism in place if they were dissatisfied with a response or service and would like more information.
• When clients have a specific issue with us, they would like to contact, by phone or e-mail, an analyst who is specialized in the subject matter.
• When emails are sent to clients from the CRA, they would like it to be set up as a BCC (blind carbon copy). They don't want their email addresses to be shown and they don't want other industry people to know that they are on a mailing list.
• Clients requested that it would be helpful to receive training. RPD could be invited to certain meetings to help answer questions.
• Clients would like more information about why amendments are required, i.e., more specific legislative justification (reference to the ITA.)
• They suggested that RPD check out the Investments Dealers Association's Web site for ideas on lay-out.
• There should be a sharing of training resources between the industry and the CRA.
• Clients advise that the letters sent to their institution be addressed to a specific area within the organization and not addressed simply to "The President".
• They would like the interpretation bulletins updated to reflect changes to the ITA and/or budget changes.
• Clients need to know what exactly the CRA is looking at in reviewing plans for compliance.

Risk management

Answers and comments on risk management:

• Clients believe that information on risk assessment, including profiles, should be developed with input from the industry.
• RPD should provide different templates based on the type of plan and the templates should include possible variables.
• Clients suggested that if RPD were to provide a checksheet, it could simply modify the T550 to include the check sheet requirements and reference the applicable provision in the ITA.
• Clients would like to know what their risk profiles are. They would like a comprehensive report on how risks are assessed.

Cyclical review

Plan documents filed with RPD will be reviewed on a cyclical basis based on risk. For example, high-risk plans would be reviewed annually while low risk plans would be reviewed every five years. All plans would be reviewed, even if there have been no submissions since the last review.

Answers and comments on cyclical review:

• Clients agree that reviewing on a cyclical basis is a good idea, however they suggest that RPD conduct an up-front review in certain situations. Clients suggested that RPD give the issuers a preliminary rating based upon experience (audit reviews, general dealings), and use this rating to determine the number of years between reviews.
• No problems were anticipated with the move to a cyclical review of plans if the CRA provides the tools needed for self-assessment.
• RPD should also have flags in place that would trigger reviews prior to the next scheduled cyclical review.

Correcting non-compliance

Answers and comments on correcting non-compliance:

• In relation to penalties for non-compliance, RPD could consider not registering contracts if rating slips below acceptable level.
• Clients believe that compliance (and resultant penalties) should be based upon how the institution is administering their programs. They also note that penalties could have severe impact depending upon the size of the institution (bank vs. small issuer).
• Clients advise that they are in a continual compliance mode and that RPD should trust the industry.
• Clients believe that RPD should differentiate between document compliance and how the institution is administering the plan.
• Would penalties be charged for: non-filing or late filing of T550; procedures on notifying annuitants; part X.1 tax; security for a loan; advantage clause?
• RPD should allow a period of time to rectify the non-compliance issues, prior to penalizing the institution (a grace period).
• Clients suggested a rising scale for penalty amounts (i.e., first time would be X, and the amount would increase with each instance of non-compliance).
• They suggested that RPD advise issuers that it is not going to register contracts until the compliance problem is corrected.
• Before such a program could be established, the steps need to be determined, such as training methods, informing staff on issues, institution policies and the steps for correcting non-compliance need to be clearly defined.
• RPD should provide examples, specific to the company/issuer, of the mistakes that are being made. These letters, with examples, should be directed to the compliance area of the particular institution.
• Retroactive changes could be difficult depending upon the nature of the non-compliance.
• Clients believe that correcting non-compliance on a prospective basis would be much easier. RPD should consider all factors (impact on the individual, nature of the error).
• RPD audit report should be sent to the issuer involved.
• RPD should differentiate between honest mistakes and intentional non-compliance. Clients would like more latitude to correct administrative relief problems on their own.

Status quo

Answers and comments on status quo:

• Clients feel that there is a good rapport between the industry and RPD.
• Clients want the consultation sessions to continue and like the contact information and handouts that are distributed at those sessions.
• The enquiries line is sometime useful but there are a lot of inconsistencies.
• Some clients are unaware of the various services that RPD provides.
• Those clients who deal with RPD on a regular basis do not go through the enquiries line, they prefer to deal with their contact in the specialty group. RPD should provide their enquiries analysts with more training on specialty products.
• Clients like the process created for addenda (the standard addenda).
• The T4RSP guide is good. They particularly like the examples provided - they are helpful in completing the forms.
• They like the fact that fillable forms are available and they would like more of them to be available.
• They like the interpretation bulletins and information circulars published by the CRA.
• RPD has a lot of information on the Web site but things are hard to find and sometimes out-of-date.
• The web site and the publications issued by the CRA are helpful (though they could use some improvement).

Client service standards and annual report

Answers and comments on client service standards and annual report:

• Client service standards are created for RPD's benefit. Clients acknowledge that there is a standard but say that it is not a standard that relates to RPD's clients. They think that it is not about client service.
• If RPD is going to establish client service standards, it should attach some level of importance to its clients and ask them what their needs and requirements are.
• Client service standards provide a timeframe for receiving a reply so from that standpoint they are good.
• Clients advise that their standards are client-driven and that they fluctuate depending upon the nature of the enquiry, the urgency of the request and the necessity of a response.
• Clients would like a better understanding of where and how a question is responded to. They would like to know what RPD's internal process is to answer a question.
• Clients feel that a more acceptable standard for the review of new plans would be 10 days.
• They believe that RPD should provide an acknowledgement to their request within a short time period - at most, 30 days to respond.
• They suggest that RPD should have specific service standards for specific issues as opposed to just general workloads (i.e., administrative relief, transfers).
• Clients feel that service standards could have a graduated scale based upon the complexity of the submission.
• Clients would like their requests to be responded to based upon their urgency, not RPD's.
• RPD should concern itself about the quality of information that is being provided, not just quantity.
• They would like RPD officers to be more specialized (if they have a specific enquiry, someone with expertise in that area would respond to them).
• Suggest that RPD monitor its enquiries lines to ensure quality of responses and to determine training needs.
• Would like client service results to be published on the Web site but would like two sets of statistics - one for French submissions and one for English.

Certified plan provider process

Clients could earn the RPD "seal of approval" by meeting specified criteria (including level of training for staff, systems and processes in place to ensure compliance, audit results, use of specimen/pro forma plan texts, etc.). The name of certified plan providers would be published and they would receive expedited service as their plans would be considered low risk. Certification would be renewable every few years.

Answers and comments on certified plan provider process:

• If RPD is going to introduce the Certified Plan Provider process, it should provide a contact service for certified providers as an incentive.
• Good idea provided clients receive all the required information to meet the certification process.
• Similar to the grant process with HRDC and RESPs.
• RPD has to establish the criteria and provide whatever publications are necessary to assist the industry (procedure manuals, training courses, etc.).
• They don't anticipate additional costs with the certified plan provider process.
• The clients stated that since the program would be voluntary, it is not necessary to publish the names. They said that a list of certified plan providers on RPD's Web site is something they might be interested in but questioned the necessity.
• Clients support this process if voluntary.
• Some clients are not in favour of publishing the names of the certified plan providers.
• Clients believe that if a company could not be designated as a certified plan provider that this, in itself, would be enough of a penalty.
• Clients suggested that the only cost to them to become a certified plan provider would be systems costs related to administration.
• They believe that it will result in quicker turnaround time for administrative relief.
• Clients suggest that RPD allow certified plan providers to fix the problems without prior approval.
• Trustees and agents should be certified separately.
• Clients suggest that one of the criteria for certification for a trustee could be how they are enforcing compliance with their clients.
• The publication of the names of those providers who have been certified may penalize those who do not volunteer to participate in the process.
• The process needs a less glamorous name in order to be seen as more broadly applicable.
• Maybe RPD could certify plans rather than companies.
• Clients believe that RPD's client services to the industry would be enhanced; their service to their clients would be enhanced and they also believe that there would be consistency within the industry if this were introduced.
• They believe it will be a marketing tool for submitters/issuers.
• The advantage to clients choosing to take part in this process should not be on the marketing side but on strengthening relationship with CRA and improving compliance.
• Clients would like to assign their own specimen plan numbers. If there were an approved pro-forma on file, it would just be a matter of submitting the documents and a review would not be required.
• It was suggested that RPD charge for services from those that are not certified providers, while there would be no charge for those that were. Alternatively, RPD could charge those who had recurring problems (or refuse to register contracts for non-compliance).
• If RPD were to assess the manner in which they provide training to their staff and found it unacceptable, would it offer training or provide training packages?

Advisory groups

Answers and comments on advisory groups:

• Clients suggested that advisory groups could be used for information sessions to disseminate information and explain new processes, budget implications and to report changes. They feel this is the best way to receive information on these issues - everyone gets the same information.
• Clients suggested that the meeting should be on an "as needed" basis.
• Clients advise that videoconferencing could work but they suggested that the group get together initially and have conference calls on a semi-annual basis.
• Clients suggested that a core advisory group be created and that sub-groups could be created for specific issues.
• RPD should invite firms to attend, rather than specific individuals.
• They suggested that RPD have smaller advisory groups, specific to certain areas (regional).
• Clients recognize that as part of the advisory group they will be required to travel but they suggest that to balance the cost one meeting should be in the East and one in the West, if the meetings are held semi-annually.
• Clients suggest that as issues arise emails could be sent to the advisory group to get their perspective and the decision as to whether a meeting is required would result from the initial discussion.
• April, May or October are the most suitable times to meet.
• The Canadian Bankers' Association should also participate.
• Meeting with formal bodies (e.g., the Canadian Bankers' Association) may be unwieldy. They are not tax-focussed, but rather are more of a lobby group.
• Discussions on emerging issues or new products have been initiated by clients in the past.
• Consultation with industry representatives would avoid duplication of effort. Discussions need not get too specific on issues but be general enough to apply to most situations.
• Clients suggested that the size of the group should be about 12-15 clients representing different businesses on a national basis.
• The clients suggested: Assessment & Collections Branch, representatives of RPD - hands-on analysts and people that have a greater understanding of the legislation (the Income Tax Rulings Directorate, the Department of Finance).
• They would like to have participants there who can make decisions.
• Clients believe that groups should meet in Ottawa since it is more likely to bring in the government experts. Government more involved if meeting was in Ottawa.
• Clients feel that the advisory group members should serve for 2 or 3 years. They feel it is necessary to establish a time limit for service but that this time limit should be a minimum as opposed to a maximum.
• Clients would like to know how RPD would select the candidates for the advisory groups (what criteria).
• Clients require minutes of the meetings.
• The costs associated with attending the sessions can be borne by the participating institution if there is a benefit to them to attend.

Other suggestions/comments raised during the consultation sessions

Other areas/departments

• They would like confirmation from the Assessment & Collections Branch that the corrections and amendments they submit have been received. They suggested that perhaps an electronic identifier could be used for each submitter for communication purposes.
• Need clarification on how to make amendments to electronically submitted tax receipts. RPD needs to advise how to make corrections and provide templates.
• Clients need clarification with regards to the filing of T4RSPs electronically. They understand that if they have more than 500 receipts, they have to file electronically, however, they are also under the impression that the "500" number is specific to a particular plan and not the institution as a whole.
• The current situation where 500 or more submissions of a particular tax form that is being filed must be filed electronically is seen to be too rigid. Some exceptions need to be made for certain situations (e.g., death). Would CRA be willing to accept electronic filing for most of specimen plan and paper filing for situations where death is involved?
• Clients require more detailed information regarding non-resident information.

Forms/publications

• Why do we continue to require the filing of T550s? Are they really necessary?

Training

• RPD should offer information/training sessions on topics such as transfers, locking-in, non-residents, etc. This could be done in partnership with the provinces. Clients would absorb costs if reasonable. (The Régie des rentes du Québec does this).

General

• Clients suggested that RPD re-vamp its phone system and have it operate similar to the Income Tax Rulings Directorate's phone system.
• Calling the Tax Services Office enquiries line usually results in inaccurate information.
• RPD is too rigid about security issues with regard to submitting and responding via email/electronically.