Which of the following statements about pension adjustments (PA) is TRUE?

A Pension Adjustment (PA) is a value calculated for members of a Registered Pension Plan (RPP) or a Deferred Profit Sharing Plan (DPSP). It represents the total value of the pension benefit earned by an employee in a specific year. This PA is reported on the employee's T4 slip and reduces their Registered Retirement Savings Plan (RRSP) contribution room for the following year. This applies to both defined benefit (DB) and defined contribution (DC) pension plans, as both are types of RPPs.

A. PAs are based on contributions and benefit accruals, not on reductions due to market performance.
B. A PA reduces, not increases, an individual's RRSP contribution room for the subsequent year.
C. A PA represents the value of the benefit earned in a single year for tax purposes, not the total pension increase from years of service.

1. IFSE Institute, Canadian Investment Funds Course (CIFC), Part 1, Module 5, Section 3.1 "Registered Pension Plans (RPPs)".

2. Canada Revenue Agency. (n.d.). T4040 RRSPs and Other Registered Plans for Retirement. Section: "Pension Adjustment (PA)".