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Retirement Savings Plan - Terms and Conditions

Meridian Credit Union Limited, a credit union incorporated under the laws of Ontario having its Head Office at the City of St. Catharines in the Province of Ontario (hereinafter referred to as the “Depositary”), hereby declares that it accepts the office of Depositary for the applicant (hereinafter referred to as the “Annuitant”) upon the following terms:

1. Plan: This agreement together with the application as submitted shall constitute a Meridian Retirement Savings Plan or Restricted Life Savings Plan and herein after referred to as the “Plan”. Meridian shall take the necessary steps to register the Plan under the Income Tax Act (Canada). Contributions received by Meridian from the Annuitant and the income derived therefrom shall be held by Meridian in accordance with the provisions of this agreement, the Income Tax Act (Canada), and any applicable provincial legislation. The ultimate responsibility for the administration of the Plan lies with Meridian Credit Union.

2. Contribution Amounts: The Annuitant is responsible for ensuring that the total deposits made to the plan do not exceed the maximum amount allowed by the Income Tax Act (Canada). Meridian has no obligation to determine or advise the Annuitant with respect to the maximum allowable amount.

3. Over Contributions: The Depositary shall, upon written application by the annuitant or the annuitant’s spouse, refund to that applicant all or part of the amount established to be an over contribution or excess contribution for the year, in respect of such applicant but not exceeding the amount validly contributed to or under this plan in the year.

4. Investments: Each contribution received by the Depositary or its duly appointed agent, together with the income derived there from shall be invested in deposits of Meridian Credit Union Limited, a credit union as defined in paragraph 137 (6)(b) of the Income Tax Act (Canada) and amendments and regulations thereto. Such de-posits shall bear interest and have such terms as may be determined by the Credit Union from time to time, provided the interest be compounded at least annually.

5. Transfers: In accordance with Section 146(16) of the Income Tax Act (Canada), this plan may be amended to permit the transfer of monies to another Registered Retirement Savings Plan, a Restricted Life Savings Plan, a Registered Retirement Income Fund, a Restricted Life Income Fund or a Registered Pension Plan. The amount so transferred will not be included in computing the annuitant’s income.

6. Right of Offset: In accordance with Subparagraph 146(2)(c.3)(i) and (ii) of the Income Tax Act (Canada) the Depositary has no right of offset as regards the property held under the plan in connection with any debt or obligation owing to the Depositary, and the property held under the plan cannot be pledged, assigned or in any way be alienated as security for a loan or for any purpose other that of providing for the annuitant commencing at maturity, a retirement income.

7. Tax Payable on Advantage: In accordance with the section 207.05 of the Income Tax Act (Canada), the controlling individual of the Plan is liable to pay a tax for a calendar year if, in the year, an advantage in relation to the Plan is extended to, or is received or receivable by, the controlling individual, a trust governed by the Plan, or any other person who does not deal at arm’s length with the controlling individual, unless the advantage was extended by Meridian or a person with whom Meridian is not dealing at arm’s length.

8. Designation of Beneficiary: Any designation of Beneficiary shall be made, changed or revoked only by a Will, or by a written instrument in a form acceptable to the Depositary, which clearly identifies the Plan. The Depositary shall act in accordance with the will or the instrument designating the Beneficiary, whichever bears the latest execution date. Download a Designation of Beneficiary form here.

9. Spouse: Spouse should not include any person who is not recognized as a spouse or common-law partner for the purposes of the Income Tax Act (Canada).

10. a) Maturity of the Plan: Unless it receives a contrary written direction from the Annuitant after the Annuitant attains the age of sixty (60) years or at some earlier time if allowed by Section 146 of the Income Tax Act (Canada), but prior to the end of the year in which the Annuitant attains the age limit as defined by the Income Tax Act (Canada), the Depositary shall realize the proceeds of the Plan and apply such proceeds to purchase a Retirement Income (as defined in Section 146 of the Income Tax Act (Canada)) from the Depositary on the last day of the year in which the Annuitant attains the age limit as defined by the Income Tax Act (Canada). The retirement income is to be paid in annual or other more frequent periodic amounts. This Plan will not provide for the payment of any benefit before maturity except by way of a refund of premiums (as defined by the Income Tax Act (Canada)) on or after the death of the Annuitant, a refund of excess contributions (as defined by the Income Tax Act (Canada)) nor for the payment of any benefit after maturity except by way of a retirement income (as defined by the Income Tax Act (Canada)). The Plan also does not provide for the payment of any premium after maturity and no annuity payable thereunder to the annuitant or in the event of the death of the Annuitant, the Annuitant’s spouse, is capable in whole or in part of surrender, commutation or assignment, nor may any loan be made against it or them. Any annuity payable to a person other than the spouse of the Annuitant on or after the death of the Annuitant must be commuted.

b) Annuitant’s Birthdate: The statement of the Annuitant’s age on the face hereof shall be deemed to be a certification by the Annuitant of such age and an undertaking by the Annuitant to provide any further evidence of proof of age that may be required when a Retirement Income is purchased.

11. Retirement Income: Under the Income Tax Act (Canada), a retirement income includes either or both of:

a) An annuity commencing at maturity, with or without a guaranteed term not exceeding the term referred to in (b), payable to the Annuitant for his/her life, or to the Annuitant until the death of his/her spouse, and thereafter to the survivor for his/her life.

b) An annuity payable at maturity to the Annuitant for his/her life and thereafter to his/her spouse for a guaranteed term of years equal to 90 minus the age in whole years at maturity of either the Annuitant or, if the Annuitant elects, the Annuitant’s spouse.

In accordance with paragraph 146(2)(b.1) of the Income Tax Act (Canada), the plan does not provide for a payment to the Annuitant of a retirement income except by way of equal annual or more frequent periodic payments until such time as there is a payment in full or partial commutation of the retirement income and, where that commutation is partial, equal annual or more frequent periodic payments thereafter.

In accordance with paragraph 146(2)(b.2) of the Income Tax Act (Canada), the plan does not provide for periodic payments in a year under an annuity after the death of the first Annuitant, the total of which exceeds the total of the payments under the annuity in a year before that death.

Meridian will not purchase any retirement income if the monies held for the Annuitant at the date of purchase are insufficient to purchase a retirement income of at least $25.00 monthly. In this event, Meridian will pay to the Annuitant the monies held.

12. Death of the Annuitant: Upon receipt of Proof of Death of the Annuitant prior to the purchase of the retirement income referred to in Clause 11 hereof, and upon receipt of such other documents, (e.g., Certificate of Appointment of Estate Trustee With or Without a Will) as Meridian may require, Meridian shall realize all invest-ments held for the Annuitant under the plan, and pay the proceeds in a lump sum to the legal representative of the deceased Annuitant or to the designated beneficiary, if applicable. If the proceeds are paid to a beneficiary other that the Annuitant’s spouse, funds will be taxable on the deceased’s final tax return.

13. Income tax Receipts: On or before the 31st day of March of each year, the Depositary shall forward to the Annuitant a receipt to be filed with the Annuitant’s personal income tax return.

14. Conditions:

a) The Depositary shall not be required to pay interest on uninvested balances.

b) The Depositary may, at its discretion, require six months prior written notice to effect any realization of proceeds of any registered retirement savings plan investments.

15. Amendments to the Plan: The Depositary may from time to time amend the Plan provided that notice of such amendment is promptly given to the Annuitant and such amendments are not contrary to the provisions of the Income Tax Act (Canada), and any amendments and any regulations thereto, and if applicable, any Provincial Acts or Federal Acts having jurisdiction, with respect to Registered Retirement Savings Plan. In the event of changes to the Income Tax Act or any pension legislation covering your Plan, the terms of your Plan and any addendum thereto may be amended without notice to you to ensure that your Plan continues to comply with all applicable legislation.

16. Mailed Notices: Any notice given to the Depositary hereunder shall be sufficiently given if made, postage prepaid, addressed to the Depositary at any of its offices in Ontario and shall be deemed to have been given on the date that such notice is received by the Depositary. Any notice, statement or receipt given by the Depositary to the Annuitant shall be sufficiently given if mailed, postage prepaid, addressed to such Annuitant at the address of the Annuitant set out in the application of the Plan, unless the Annuitant has notified the Depositary of a new address, in which case notice shall be addressed to the Annuitant at the last address for such purposes so notified and shall be deemed to have been given on the date of mailing.

17. Administration Fees: The Depositary may impose service charges from time to time at its discretion for the operation of this plan and may debit any account of the Annuitant with the Depositary for payment of same.

18. Depositary’s Liability: The Depositary shall not be liable for loss or diminution of the Annuitant’s investment under the Plan, except due to its negligence, willful misconduct or lack of good faith. The Annuitant hereby accepts this Agreement upon delivery and in consideration of the deposits made by the Annuitant, Meridian Credit Union hereby accepts and in witness whereof the Company has signed under the hand of its duly authorized officers on its behalf at St. Catharines in the Province of Ontario, Canada.