The Individual Pension Plan (IPP) is a defined benefit pension plan whose retirement income corresponds to 2% of the average of the 3 highest income years for each recognized year of service. It is generally set in place for an individual and financed by the company (tax-deductible for the company).
The plan is financed by the business
Allows greater savings for retirement than a RRSP
Recognizes past years of service, which increases the retirement pension
The plan's assets are accumulated tax-free before retirement
Creditors cannot seize assets in an IPP
No payroll tax on contributions for the employee, contrary to the RRSP
Net rate of return assumption of 7.5%, contrary to the RRSP
Possibility of additional capitalization when investment returns are low (more significant actuarial deficit)
Possibility of making a final contribution to the plan by increasing pension benefits
Significant income tax savings; contributions lower the business' revenue
Contributions made into the IPP by the employer are not a taxable benefit for the participant
The assets in the IPP decrease shareholder equity, which can make selling the business easier
There are several types of retirement plans, and each one has specific features that differentiates it. Our experts are here to guide you in choosing the right retirement plan and the right administrator.
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A group retirement plan (or group RRSP) is a retirement savings instrument for a group of employees, unionized workers, or members of an association, which is issued by a financial institution and approved by the CRA (Canada Revenue Agency).
The DPSP is an approved agreement according to CRA (Canada Revenue Agency) requirements pursuant to which an employer can share the profits of his business with all his employees or group of employees.
Simplify implementation in accordance with legal obligations set out in Act 39.
Taxation
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Life Insurance