Transferring a Foreign Pension to a Canadian RRSP under Paragraph 60(j)
- Mirna Richa and Logan Cerelli-Lough
- Dec 1, 2025
- 2 min read
A Smart Opportunity for Canadians with Global Careers
For Canadians who have worked abroad, bringing home foreign pension benefits can be both rewarding and complex. Fortunately, paragraph 60(j) of the Canadian Income Tax Act provides an attractive opportunity to transfer certain lump-sum foreign pension or superannuation benefits into a Registered Retirement Savings Plan (RRSP) — without using up your regular RRSP contribution room.
This special provision can help you defer tax, consolidate your international retirement savings, and take advantage of foreign tax credits.
For example, if you received $100,000 from a U.S. pension and $30,000 was withheld for US income tax, you can contribute the $70,000 received (or the full $100,000 if you have additional funds) to your RRSP, claim a deduction, and apply for a foreign tax credit for the withheld amount.
Why Paragraph 60(j) is Unique
Paragraph 60(j) was created for Canadians who earned pension entitlements while living and working outside Canada. It recognizes the global nature of today’s workforce and provides a practical way to integrate foreign retirement benefits into Canada’s tax-efficient retirement system.
The deduction applies to lump-sum payments from employer-sponsored or government pension plans, as long as the payments relate to periods of non-residency and is included in your Canadian taxable income.
Key Advantages and Considerations
✔ No Impact on RRSP Contribution Room
Transfers made under paragraph 60(j) do not reduce your regular RRSP contribution room, offering valuable planning flexibility.
✔ Tax Deferral and Potential Credits
The transfer can provide meaningful tax deferral and access to foreign tax credits, helping reduce your overall tax burden.
✔ Eligibility Requirements
Only lump-sum payments from qualifying foreign pension or superannuation plans are eligible.
Personal retirement accounts generally don’t qualify, except for certain U.S. plans (such as IRAs) with similar characteristics. Roth IRAs are excluded.
The payment must relate to employment while you (or your spouse) were non-residents of Canada.
✔ Reporting and Compliance
Proper reporting of the pension income, RRSP transfer, and any foreign tax credits is essential for full compliance with Canadian tax rules.
Why Professional Advice Matters
Paragraph 60(j) offers a powerful tool for Canadians with international pensions, but the process involves navigating both Canadian and foreign tax laws. Eligibility and timing are key, and professional guidance ensures you make the most of the opportunity while avoiding costly mistakes.
At Trowbridge Professional Corporation, our cross-border tax specialists can help you:
Confirm eligibility for paragraph 60(j) treatment
Structure the transfer for maximum tax efficiency
Prepare and file all required Canadian and foreign tax documentation
Get Expert Help with Your Cross-Border Retirement Planning
If you’ve received a lump-sum payment from a foreign pension or are considering a transfer to your RRSP, our team can help you evaluate your options and guide you through every step of the process. Contact us today to schedule a consultation and make sure your retirement savings work as efficiently for you in Canada as they did abroad.
