Income Tax Regulations — 8503
8503 (1) In this section and subsection 8517(2), the net contribution account of a member of a pension plan in relation to a defined benefit provision of the plan is an account that is (a) credited with (i) the amount of each contribution that is made by the member to the plan in respect of the provision, (ii) each amount that is transferred on behalf of the member to the plan in respect of the provision in accordance with any of subsections 146(16), 147(19) and 147.3(2) and (5) to (7) of the Act, (iii) such portion of each amount that is transferred to the plan in respect of the provision in accordance with subsection 147.3(3) of the Act as may reasonably be considered to derive from contributions that are made by the member to a registered pension plan or interest (computed at a reasonable rate) in respect of those contributions, (iv) the amount of any property that was held in connection with another benefit provision of the plan and that has been made available to provide benefits under the provision, to the extent that if the provisions were in separate registered pension plans, the amount would be included in the member’s net contribution account by reason of subparagraph (ii) or (iii), and (v) interest (computed at a reasonable rate determined by the plan administrator) in respect of each period throughout which the account has a positive balance; and (b) charged with (i) each amount that is paid under the provision with respect to the member, otherwise than in respect of an actuarial surplus under the provision, (ii) the amount of any property that is held in connection with the provision (other than property that is in respect of an actuarial surplus under the provision) and that is made available to provide benefits with respect to the member under another benefit provision of the plan, and (iii) interest (computed at a reasonable rate determined by the plan administrator) in respect of each period throughout which the account has a negative balance. Permissible Benefits (2) For the purposes of paragraph 8502(c), the following benefits may, subject to the conditions set out in respect of each benefit, be provided under a defined benefit provision of a pension plan: Lifetime Retirement Benefits (a) lifetime retirement benefits provided to a member where the benefits are payable in equal periodic amounts, or are not so payable only by reason that (i) the benefits payable to a member after the death of the member’s spouse or common-law partner are less than the benefits that would be payable to the member were the member’s spouse or common-law partner alive, (ii) the plan provides for periodic cost-of-living adjustments to be made to the benefits, where the adjustments (A) are determined in such a manner that they do not exceed cost-of-living adjustments warranted by increases in the Consumer Price Index after the benefits commence to be paid, (B) consist of periodic increases at a rate not exceeding 4 per cent per annum after the time the benefits commence to be paid, (C) are based on the rates of return on a specified pool of assets after the benefits commence to be paid, or (D) consist of any combination of adjustments described in clauses (A) to (C), and, in the case of adjustments described in clauses (C) and (D), the present value (at the time the member’s benefits commence to be paid) of additional benefits that can reasonably be expected to be paid as a consequence of the adjustments does not exceed the greater of (E) the present value (at the time the member’s benefits commence to be paid) of additional benefits that could reasonably be expected to be paid as a consequence of adjustments warranted by increases in the Consumer Price Index after the member’s benefits commence to be paid, and (F) the present value (at the time the member’s benefits commence to be paid) of additional benefits that would be paid as a consequence of adjustments at a fixed rate of 4 per cent per annum after the time the member’s benef