Pension Adjustment Reversal - PAR

DEFINITION of 'Pension Adjustment Reversal - PAR'

A numerical calculation in certain Canadian pension plans that reverses a previously assumed pension value. This can occur when an employee leaves a company after a short period of time and before he or she is vested. As a result, the employee may only have his or her pension contributions and not any employer contributions. The pension adjustment reversal "reverses" the overstated pension adjustments, since the employer contributions are not counted.

BREAKING DOWN 'Pension Adjustment Reversal - PAR'

The pension adjustment reversal reduces the amount of money that has been contributed in that year's pension plan, thereby increasing the Registered Retirement Savings Plan (RRSP) deduction limit. In order to be eligible for a pension adjustment reversal, the employee must terminate his or her membership in the pension plan (for example, by transferring benefits to a Registered Retirement Savings Plan), but not necessarily his or her employment with the company. Conversely, an employee who leaves a company but continues membership in the pension plan is not eligible for the PAR.

RELATED TERMS
  1. Pension Fund

    A fund established by an employer to facilitate and organize ...
  2. Pensionable Service

    The period of service, expressed in a yearly figure, for which ...
  3. Unfunded Pension Plan

    An employer managed retirement plan that uses the employer's ...
  4. Pension Option

    A set of options that a pensioner has in regard to the handling ...
  5. Guaranteed Minimum Pension - GMP

    Pensions earned while working in the United Kingdom's public ...
  6. Pension Protection Act Of 2006 ...

    An act of legislation that makes a large number of reforms to ...
Related Articles
  1. Retirement

    Pension Plans: Pain Or Pleasure?

    Employees have a love/hate relationship with this retirement option.
  2. Retirement

    7 Signs Your Pension Fund Is In Trouble

    Even if you're lucky enough to have a pension plan, you can't assume it'll pay out.
  3. Financial Advisor

    How to Advise Clients with Frozen Pensions

    Financial advisors are on the front line in advising clients impacted by a frozen pension. Here's what they need to consider.
  4. Retirement

    America's Frozen Pension Dilemma

    Unfortunately, there are several factors that have eroded the presence of pension plans in America, and workers need to be prepared to replace that expected income for their retirement years. ...
  5. Retirement

    New 401(k) Pension Rollover Rule: Pros and Cons

    Is the new rule allowing participants to roll their 401(k) balances into pensions a good idea?
  6. Retirement

    How Safe Is Your Pension?

    A 2014 law permits some private pension plans to reduce benefits. How to figure out if your retirement income is endangered.
  7. Retirement

    How Pensions, Social Security Differ

    Both pensions and Social Security provide an income stream to retirees, but they differ widely on how they're structured and funded. Here's the lowdown.
  8. Retirement

    What are Pension Funds?

    A pension fund is a company-sponsored fund that provides income for employees in retirement.
  9. Retirement

    Chipping Away At The Pension Freeze Trend

    Learn five steps that'll put your retirement back into your own hands.
  10. Retirement

    The Investing Risk Of Underfunded Pension Plans

    Determine the risk to a company's EPS and financial condition resulting from an underfunded pension plan.
RELATED FAQS
  1. The company I am receiving my pension plan from has just filed bankruptcy. Could ...

  2. What can you do with your pension if you leave the employer and can you borrow money ...

    I am planning to leave my job that I have worked at for 8 plus years and I just received a notice about a pension that I ... Read Answer >>
  3. Are Canadian Pension Plans inflation-protected?

    Learn about the Canada Pension Plan and how it adjusts its contributions and benefits each year for changes in inflation ... Read Answer >>
  4. Who bears the investment risk in 401(k) plans?

    Who actually bears the investment risk in a pension plan depends on the type of pension plan that is employed. In a broad ... Read Answer >>
  5. How do pay-as-you-go pension plans work?

    Learn what a pay-as-you-go pension plan is and how it is different from fully funded pension plans. Understand how public ... Read Answer >>
  6. What's the difference between a 401(k) and a pension plan?

    Discern the differences between 401(k) plans, in which employees assume the market risk, and pension plans, in which the ... Read Answer >>
Hot Definitions
  1. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  2. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  3. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  4. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
  5. Weighted Average Life - WAL

    The average number of years for which each dollar of unpaid principal on a loan or mortgage remains outstanding. Once calculated, ...
  6. Real Rate Of Return

    The annual percentage return realized on an investment, which is adjusted for changes in prices due to inflation or other ...
Trading Center