ADVISING the

Client

REGISTERED RETIREMENT INCOME FUND (RRIF) Administration Guide

RRIF ACCOUNT SET-UP

RRIF PAYMENTS

A Registered Retirement Income Fund (RRIF or RIF) plan may be set up at any time; there is no minimum age, but it must be established no later than December 31 in the year in which the RRSP plan holder turns 71 years old. An RRSP must be collapsed by December 31 in the year the RRSP annuitant turns 71 years old, and the assets may be transferred to a RRIF. Transferring the assets to the RRIF plan maintains the registered status of the assets and therefore they will continue to be tax deferred. There is a minimum annual payment, which must be withdrawn from the RRIF account. Direct contributions into RRIF plans are not permitted.

RRIF Payments are set up as Automatic Withdrawal Deposits (AWDs), which can be customized to run on any day between the 1st and the 25th of the month, for accounts at CI Investments. The RRIF payments may be set up by completing section 8 of the mutual fund application, or by letter of direction. Sun Life agents would complete the appropriate sections of the E-App. RRIF Payment Instructions must have the following information: • CI account number • Fund name and code • Dollar amount of AWD • Frequency – monthly, quarterly, semi-annually and annually • Start date • Void cheque if the clients wishes the funds to be deposited directly to his or her account

Spousal RRIF Accounts Assets transferred from a Spousal RRSP must be transferred to a Spousal RRIF. The assets must maintain their spousal status (see Plan Restrictions below for situations where the spousal designation can be removed and how).

RRIF Annual Minimum Payment Required Documents There is no RRIF minimum payment in the year the RRIF account is established. A minimum annual payment must be made commencing the year following the year the RRIF plan was established. The RRIF minimum annual payment is based on age and the market value on December 31 of the previous year. The age used may be the annuitant’s or the annuitant’s spouse, if the spouse is younger. A one-time election of the age to be used must be made at the time the RRIF account is established. Since this is a one-time election, the age can only be changed upon transferring assets to a new RRIF account.

To set up an RRIF account, the client must complete and sign a CI Investments application. Faxed copies of the application form are acceptable. Sun Life agents may set up the plan through the Sun Life electronic application (E-App). The signature page is to be completed and forwarded to Sun Life head office.

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RRIF Administration continued The formula for the minimum payment does differ depending on if the RRIF is classified as qualified or non-qualified. A qualified RRIF is a RRIF account established before the end of 1992. A non-qualified RRIF is a RRIF account established after the end of 1992.

Non-Qualifying RRIF set up after the end of 1992 Age 70 or Under Market Value on Dec 31 90 – Age on Jan 1

Formulas There is no maximum annual payment limit for RRIF accounts. Any amount can be withdrawn, the amount above the minimum payment is known as an excess payment or an excess amount.

Age 71 or Over Market Value * CRA Factors (see below)

Qualifying RRIF – RRIFs set up before the end of 1992 Age 78 or Under

Redemptions & AWDs

Market Value on Dec 31 90 – Age on Jan 1

From time to time, there may be need to redeem assets from the account, outside of the scheduled RRIF payments. These types of redemption requests must come in writing, and must be signed by the client.

Age 79 or Over Market Value * CRA Factors (see below)

CRA MINIMUM PAYMENT FACTORS Sun Life agents may request the redemption through the E-App if they have an LTA on file for the client. An existing periodic RRIF payment (or AWD) within a RRIF account will exhaust the minimum first. The redemption is treated as an excess payment (above the minimum) unless otherwise stated on the redemption instructions. The minimum will continue to be paid as part of the monthly AWD payments. If the RRIF payment is scheduled to run for the end of the year, then we will verify with the advisor whether the redemption request is to deplete the minimum or if the redemption is for an amount in excess of the minimum. If the redemption is to deplete the minimum for the year and the AWD on the account is for the minimum amount, we will cancel the future AWDs scheduled for the remainder of the year. If the periodic RRIF pay¬ments are for a specific amount and not exclusively the minimum, then they will not be stopped. WITHHOLDINGS TAXES & TAX RECEIPTS When a withdrawal is made from a RRIF, CI Investments must withhold at source a certain percentage of the withdrawal amount as withholding taxes and remit them to Canada Revenue Agency and Revenu Québec. Withholding taxes will vary depending on the amount redeemed and whether the plan holder is a Quebec resident or not. Withholding taxes do not apply to a RRIF minimum annual payment (however, the client may choose to have a withholding tax applied to the minimum amount). All withdrawals above the minimum, otherwise known as an excess amount, however, will be subject to applicable withholding taxes. –2–

AGE at START of YEAR

Qualified RRIF

Non Qualified RRIF

69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 and over

4.76 5.00 5.26 5.56 5.88 6.25 6.67 7.14 7.69 8.33 8.53 8.75 8.99 9.27 9.58 9.93 10.33 10.79 11.33 11.96 12.71 13.62 14.73 16.12 17.92 20.00

4.76 5.00 7.38 7.48 7.59 7.71 7.85 7.99 8.15 8.33 8.53 8.75 8.99 9.27 9.58 9.93 10.33 10.79 11.33 11.96 12.71 13.62 14.73 16.12 17.92 20.00

RRIF Administration continued Before 2005 – Default Rates Amount Withdrawn

Quebec Portion

Federal Portion

Total Tax to be deducted

Rest of Canada

$0 - $5,000

16%

5%

21%

10%

$5,000.01 - $15,000

20%

10%

30%

20%

$15,000.01 - UP

20%

15%

35%

30%

Since January 1, 2005, Quebec residents have had the provincial withholding tax of 16% applied to the portion of the RRIF payment in excess of the minimum.

January 2005 and Beyond - Default Rates Amount Withdrawn

Quebec Portion

Federal Portion

Total Tax to be deducted

Rest of Canada

$0 - $5,000

16%

5%

21%

10%

$5,000.01 - $15,000

16%

10%

26%

20%

$15,000.01 - UP

16%

15%

31%

30%

NOTE: Withholding tax is calculated on the TOTAL gross amount redeemed. Therefore, for example, if a client (not a Quebec resident) withdraws $3,000 gross from two funds for a total of $6,000 gross, a 20% withholding tax would apply to each fund. Prorating the Withholding Tax on the Periodic RRIF Payment CI Investments will start to apply the withholding tax after the minimum has been paid. For example, if the minimum annual amount is $550, but the client chooses to make monthly withdrawals of $100, withholding taxes will not apply until the June monthly payment. In June, $50 of the $100 payment will have the applicable withholding tax applied, in July, all of the $100 payment will have a withholding tax applied. If the client wishes, the withholding tax may be prorated among the 12 monthly payments, so that the monthly payments will be for an equal amount (net of withholding tax). Continuing the example above, the scheduled amount to be paid will be $1,200. Breaking the payment down, $550 will not have with¬holding taxes applied, $650 will have a 10% withholding tax applied (assuming the client is not a Quebec resident), and therefore the net annual payment will be $1,135 (assuming no deferred sales charge) and the monthly payment will be $94.58 net. To prorate the withholding tax on the periodic minimum payments, we require written instructions to do so, signed by the client prior to the start of that year. Foreign Residents and Withholding Tax For non-residents, all of the RRIF payment may be subject to withholding taxes, including the minimum annual payment. The withholding tax rate for non-residents is generally 25%; it may be lower depending on Canada’s tax treaty with the annuitant’s country of residence. Additional Withholding Taxes: Tax on Minimum – Plan holders may request in writing that CI charge withholding taxes on their minimum payout. –3–

RRIF Administration continued For non-residents, CI will issue an NR4 receipt that shows the net amount withdrawn and the tax that has been withheld.

Plan holders may request in writing that CI Investments charge a higher rate of withholding tax than the one required. Please refer to some of our system tax overrides in the nearby table.

Spousal Plans & Attribution Rules

Tax Rate Overrides for Canada (Excluding Québec) C10 – 10% Federal C15 – 15% Federal C17 – 17% Federal C20 – 20% Federal C24 – 24% Federal C25 – 25% Federal C30 – 30% Federal C35 – 35% Federal C40 – 40% Federal

Attribution rules state that if a redemption in excess of minimum is made from a spousal RRIF and the contributor has contributed to any spousal RRSP in the current year or in the two previous years, the contributor is taxed on this income.

C45 – 45% Federal C50 – 50% Federal C55 – 55% Federal C60 – 50% Federal C60 – 60% Federal C65 – 65% Federal C70 – 70% Federal C90 – 90% Federal

If no spousal contributions have been made in the past three years, the annuitant will be taxed on the total amount withdrawn. The annuitant will also be responsible for taxes on any amount redeemed in excess of the amount contributed by the spousal contributor in the last three years.

Tax Rate Overrides for Quebec Q15 - 12% Quebec Q21 - 16% Quebec Q25 - 20% Quebec Q30 - 25% Quebec Q35 - 28% Quebec Q36 - 21% Quebec Q40 - 30% Quebec Q45 - 35% Quebec Q50 - 25% Quebec

Spousal Designation

3% Federal 5% Federal 5% Federal 5% Federal 7% Federal 15% Federal 10% Federal 10% Federal 25% Federal

Removing the Spousal Designation The spousal designation may be removed only under the following circumstances - Contributor’s death - Marriage breakdown or divorce. Contributor's Death

For these override rates, the rate applies to the whole RRIF payment, both the minimum and the excess amount.

Upon death of the contributor, the annuitant has the following options:

Withdrawal Tax Receipts

• Remove the spousal designation and spousal contributor’s details from the existing account (i.e. convert it into an individual plan, annuitant retains the same account). • To transfer the assets into a new or existing individual plan. • To retain the spousal designation on the account and replace the contributor’s name and SIN with that of the annuitant. The plan will retain its spousal designation.

All withdrawals made from a RRIF must be included in the plan holder’s taxable income at the end of the year in which the withdrawals have been made. As a result, CI Investments is required to issue a tax slip to all RRIF plan holders who have made a withdrawal within the calendar year. All withdrawals made from an RRIF plan in a calendar year will be reflected on a T4RRIF tax slip (and on a Relevé 2 receipt for Quebec residents), which is issued to the client at the beginning of the following year. The T4RRIF tax receipt will include the following information:

For the required documents, please contact CI Investments Client Services. Marriage Breakdown or Divorce

- Minimum Annual Amount - Total withdrawal amount subject to withholding taxes - Total amount of taxes withheld

To remove spousal designation and spousal contributor’s information from a spousal RRIF, the following conditions must be met:

NOTE: Attribution Rules do not apply to a RRIF’s minimum annual payment.

• At the time of the request, the annuitant and the contributor must be living apart as a result of marriage or common-law relationship breakdown. • No spousal contributions must have been made to ANY of the annuitant’s spousal RSPs in the year of the request and the two previous years.

If the withdrawal is made from a spousal RRIF account, the T4RRIF tax slip will include the spousal contributor’s name and social insurance number.

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RRIF Administration continued • There must have been no more than the minimum amount withdrawn from the spousal RRIF during the year of the request.

RIF to RIF On a full transfer from one RRIF account to another, the relinquishing institution would pay out the minimum annual payment for that year prior to the transfer. A minimum amount will not be calculated for the new RIF, as it would be considered its first year of establishment.

Documents Required Copy of divorce decree or separation agreement and a written statement from the annuitant confirming the following information:

CI will only calculate a minimum amount on the first year for assets received from a RRIF at another institution if one of the following conditions is met:

• The annuitant and the contributor are no longer living together as a result of a marriage breakdown or divorce. • In case of a spousal RRIF account, the annuitant must state in the letter that he or she is no longer living with the person identified as the contributor to any RSP from which transfers were made to the RIF in question as a result of a marriage breakdown.

• The client signed the transfer request in the year prior to the transfer AND the funds were received at CI during the early part of the current year. • The issue date on the cheque falls on the year prior to the year of the transfer. • The relinquishing institution notifies us that they did not pay the minimum payment for the year, and the funds were forwarded to CI during the early part of the current year.

Dividend Distributions Distributions on funds held within a Registered Plan must be reinvested. They cannot be taken out as cash. Certificates

RIF to RSP

Certificates cannot be issued on Registered Plans

A plan holder can transfer RRIF assets back into an RSP at any time prior to the end of the year in which the annuitant turns age 71.

TRANSFERS The minimum payment from the RRIF account will be paid to the client prior to completing the full transfer to the RSP. The minimum must be considered part of the annuitant’s taxable income for the year and cannot be transferred directly to an RRSP.

RSP to RIF To transfer a CI RSP to a CI RIF, we require a RRIF account application if an account does not already exist, and a letter of direction bearing the client’s signature to transfer the assets.

A T4RIF tax receipt will be issued from the RRIF account for the year of the withdrawal, reflecting the sum of all redemptions processed in the account and the amount of the transfer into the RSP. From the RRSP account, the client will receive 60(l)(v) Contribution Receipt for the same amount of the transfer. The 60(l)(v) receipt will offset the transfer amount reflected on the T4RIF issued for the same tax year.

Sun Life agents may request the transfer through the E-App. To transfer RSP funds held at another institution to a CI RIF, the client would most likely need to complete a Transfer Authorization Form or a T2033 and send it to the relinquishing institution.

To transfer a CI RIF into a CI RSP, all we require is a new RSP application and letter of direction bearing the client’s signature.

A minimum amount will not be calculated on the RIF account in the year of transfer.

Sun Life agents may set up the RRSP through the E-App. No tax receipts will be issued. To transfer a RRIF from an external institution to a CI RSP, the client should complete a T2030 transfer form. If a T2033 or Transfer Authorization form is used, it must clearly indicate that the funds originate from a RIF, so that CI Investments may issue an offsetting 60(l)(v) receipt. A new CI Investments RRIF account should be set up if one does not already exist.

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RRIF Administration continued In order to process the transfer with no tax implication, both spouses must sign a T2220 form.

Spousal RSP to Spousal RIF The spousal contributor, regardless of his or her age, may continue to make contributions into a spousal RRSP plan until the end of the year in which the annuitant turns 71.

Transfer from an RRSP or a RRIF to another RRSP or RRIF upon Marriage Breakdown Assets transferred to the ex-spousal contributor upon marriage breakdown do not retain their spousal status.

See RSP to RIF for further details. Spousal RIF to Spousal RSP

Registered Transfer Tracking Letters See RIF to RSP for details. Spousal RIF to individual RIF or RSP

As a service, CI Investments will track incoming in cash transfers from external companies and send letters to the relinquishing institutions.

A spousal RIF cannot be transferred into an individual RRIF unless the requirements to remove the spousal designation have been met (see Removing the Spousal Designation).

Tracking letters are forwarded to the releasing institution for any transfer set-up on tracking that is still outstanding. The letters will be issued in the following order:

Please see transfer from RIF to RIF or RIF to RSP for further details.

• First Letter is issued to the relinquishing institution 10 business days after tracking has been set up • Second Letter will be issued to the relinquishing institution 20 business days after if the transfer is still outstanding • Third Letter will be issued to the relinquishing institution 30 business days after if the transfer is still outstanding.

Individual RIF or RSP to Spousal RIF The annuitants in both plans must be the same. We will require a letter of direction signed by the annuitant to the plan, and the plan holder must state in the letter that he or she understands that once the transfer is completed, it cannot be reversed. Once the assets become spousal, they will retain the spousal status until death of the contributor or upon marriage breakdown. (See Removing the Spousal Designation.)

If after 45 days the transfer proceeds have not arrived at CI, we will forward a follow-up letter to the financial advisor. If after 70 days of setting up tracking, we still don’t receive the funds, we will cancel the transfer tracking on our system and a Cancellation Letter will be sent to the financial advisor.

Please see transfer from RIF to RIF or RIF to RSP for further details. RRIF TERMINATION Transfer upon Marriage Breakdown RRIF plans do not have a maturity date. They can be set up or deregistered at any time.

Under a decree, order or judgment of a court, or under a written separation agreement, a plan holder may have to transfer all or part of the assets in his or her registered plan (RSP, RIF, Spousal RSP or Spousal RIF) to his or her ex-spouse.

Clients under the age of 71 have the option of transferring their RRIF back into an RRSP.

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