Ken is a member of his employer’s Defined Benefit Pension Plan (DBPP). Which of the following statements about Ken’s plan is CORRECT?

Income from a registered pension plan, such as a Defined Benefit Pension Plan (DBPP), qualifies as "eligible pension income" for the purposes of pension income splitting. An individual can allocate up to 50% of their eligible pension income to their spouse or common-law partner to reduce their combined tax liability. This tax provision is available to recipients of qualifying pension income regardless of their age, meaning Ken can split his pension income even if he retires before age 65.

A. Contributions to a DBPP, and the associated benefit accrual, create a Pension Adjustment (PA) that reduces the member's RRSP contribution room for the following year.
B. The retirement benefit in a DBPP is determined by a pre-set formula (e.g., based on earnings and years of service), not the performance of the plan's investments.
C. The retirement benefit is a defined obligation of the plan sponsor (the employer). While plan failure is a remote risk, the benefit is considered a guaranteed commitment.

1. Canada Revenue Agency. (2023). Line 31400 – Pension income amount. "Eligible pension income".

2. Canada Revenue Agency. (2023). T4040 RRSPs and Other Registered Plans for Retirement. Chapter 2, "Pension Adjustment (PA)".

3. Canadian Securities Institute. (2023). Investment Funds in Canada Course. Chapter 10: Retirement Planning, Section 10.2, "Registered Pension Plans".