Pension Adjustment (PA)
If you belong to a Registered Pension Plan (RPP) or Deferred Profit Sharing Plan (DPSP) through your employer, your employer reports a Pension Adjustment (PA) on your T4 slip. The PA reduces your RRSP contribution room for the following year to prevent "double-dipping" — getting both employer pension benefits and RRSP tax sheltering on the same income.
The PA represents the value of the pension benefit you earned during the year. For defined contribution plans, it equals the total contributions (employee + employer). For defined benefit plans, it's calculated using a formula based on the benefit you accrued. The PA appears in Box 52 of your T4.
If you leave an employer with a pension plan and receive a Past Service Pension Adjustment (PSPA) or Pension Adjustment Reversal (PAR), these can further affect your RRSP room. You can always check your current available RRSP room on your NOA or through CRA My Account.
Related Terms
RRSP (Registered Retirement Savings Plan)
An RRSP is a government-registered account where contributions are tax-deductible and investments grow tax-free until withdrawal.
T4 (Statement of Remuneration Paid)
The T4 slip is issued by employers to employees by the last day of February each year.
NOA (Notice of Assessment)
After you file your T1 return, the CRA sends a Notice of Assessment confirming the details — your total income, deductions, tax credits, and resulting tax payable or refund.