Pension Plans

Plan for retirement today to have peace of mind tomorrow

As an incorporated professional or small business owner, you can move beyond the limitations of RRSPs by funding your retirement with corporate dollars.

Your choices are one or more of the following:

  • Individual Pension Plan (IPP)
  • Retirement Compensation Arrangement (RCA)
  • Corporate Insured Retirement Plan (CIRP)

Each retirement strategy addresses different needs. Since we offer all three, we'll help you pick the approach that's ideal for you.

Individual Pension Plan (IPP)

An IPP gives more contribution room than an RRSP. Your corporation makes tax deductible contributions and pension actuary does a valuation of your plan every three years to make sure you're on track.

An IPP works best if:

  • you are age 40+
  • you could be making the maximum contributions to your RRSP based on your employment income
  • you have stable income that is unlikely to be interrupted

Flexible options

Our approach is flexible:

  1. Choose the benefit platform
    • Defined Benefits (DB): contributions fluctuate based on your income, years of service and investment earnings
    • Defined Contributions (DC): benefits fluctuate based on your contributions and the growth of the savings
    • Hybrid: switch between DB and DC
  2. Choose the investment platform
    • Conventional: a wide selection of investments managed through your current investment advisor
    • Insurance: a limited selection of group segregated funds (with discounted investment charges)
  3. Compare with an RRSP
    • Get a quote that shows a comparison with an RRSP

Retirement Compensation Arrangement (RCA)

An RCA is a specialized vehicle that is more flexible than an RRSP or IPP. An RCA can be useful if

  • your corporation more tax-deductible contributions than an IPP or RRSP can provide
  • you want retirement equity (i.e, to remove the Canada Revenue Agency retirement savings cap on an IPP or RRSP)
  • your corporation receives a large taxable lump sum (e.g., upon sale of an asset), or
  • you have a short working lifetime (e.g., a professional athlete).

As with an IPP, the contributions are tax deductible to your corporation and you're not taxed until you receive the benefits. With an RCA, there is a 50% withholding tax on contributions and realized earnings that is refunded when payments are made from the plan.

Corporate Insured Retirement Plan

Besides a tax-free death benefit, life insurance can provide tax-free income through the Corporate Insured Retirement Plan.

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Articles

RRSPs have dropped in popularity for 15 years and more than $1,000,000,000,000 (one trillion dollars) of contribution room goes unused. Maybe there are better options?