EQ Bank Savings Plus Account

Tales from Behind the Untaxed Money Wall

in Case Study, Retirement Savings

From 2009 to 2012 I worked to buy into the Federal Government Employee pension plan, and it all finally went through (I am planning on doing a string of posts outlining the exact events, and how much fun it is to deal with the Government from the inside, at a later date). After the dust had settled, it turned out the government owed me money (good they are giving it back, bad they had it for so long). That money was from behind the untaxed money wall.

All the moneys I was using was on the side of the untaxed Money Wall (i.e. the money was in RRSPs, and LIRAs), and I have learned the importance of ensuring that moneys from the untaxed side don’t accidentally end up migrating over to the taxed side of things, because this can cause no end of headaches and troubles for you (as well as an inflated tax bill). I learned this when previously the bank had put money into my RRSP, that should have gone into my wife’s Spousal RRSP (that was a big mess), so you must be diligent that moneys go where they should and take the correct route to that end point.

All of this is a preface to the fact that I received an RRSP contribution receipt from my bank for a real sum of money. I saw the envelope and trepidation was already running up and down my back like fire ants, but when I opened the envelope I spewed a fountain of expletives, questioning the parenting and intelligence of the bank folk. As soon as I saw that receipt I knew my life was going to have many hours lost attempting to remedy this situation.

My first call was to the CRA help line (which isn’t too busy, yet), and got a nice young man who agreed, that I should start with my Bank to find out how they received the funds from the Government Pension folks, and see if they are the ones that screwed up (i.e. thought the money was a donation and not a transfer like it actually was), and get them to fix the problem, because this mistake can cause:

  • Obliteration of any remaining RRSP room I might have had, since the CRA gets a copy of this receipt as well and a nasty letter or possibly an audit from the CRA asking me “What’s your game?” when they realize this isn’t really a donation but a transfer
  • Endless hours on the phone trying to fix this (unfortunately this one is a guaranteed occurrence)

If the bank then claims they received this as a contribution from the Government Pension folks, then I am in a right pickle, because then I have to get the Government Pension folks to send a letter to the bank saying, “No that wasn’t from the Taxed Side of the Wall, it is from the UNtaxed money Wall side”, and given how long my Service Buyback has taken so far (and the number of hours I have wasted on the phone), will be a Headache of the Himalayan variety.

I’ll keep you all posted on this one, but I am not very optimistic it is going to resolve quickly (maybe it’s time for another visit to the bank and some more free banking for my troubles).

 

{ 3 comments }

  • My Own Advisor January 25, 2012, 8:25 PM

    WTF.

    Make sure you record your message for the other 33 calls…sorry to hear about the mess.

    Reply
  • bigcajunman January 25, 2012, 10:22 AM

    While I suspect my interactions will flatten my forehead, seems more fun to simply make 34 phone calls asking the same thing over and over and over ….

    Reply
  • Michael James January 25, 2012, 10:12 AM

    Sounds like a royal pain. Perhaps you can solve your problem the same way I solved my stock option taxation problem — get the government to put through legislation to fix it. It’s easy — you just form an advocacy group and beat our head against a brick wall for several years until the problem is sorted out.

    Reply

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