IPP

A pension plan for business owners and executives

Financial goals
Retirement

Horizon
Long-term

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An Individual Pension Plan (IPP) is for business owners and high-income earners like lawyers or doctors. It’s simple, your company contributes to your IPP on your behalf, which boosts your retirement savings so you can plan your next chapter with confidence.

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Why open an IPP?

An effective way to maximize retirement savings

Higher contribution limit

IPPs have more contribution room than RRSPs and offer the same tax-free growth, so you can fast track your retirement savings.

Tax-sheltered returns

Your earnings grow tax-free until withdrawn and can rake in an annual return of 7.5%, which puts things in overdrive since interest earns interest too!

Tax-deductible company contributions

Any IPP contributions your company makes on your behalf or costs to set up and manage the plan are fully tax deductible. Win-win for everyone!

How does it work?

IPP: Investing in 4 easy steps

1. It all starts with a plan

Our advisor team¹ and a consulting actuary will help you determine your goals for the retirement you want. In the case of an IPP, your company makes contributions on your behalf and can deduct these from its taxable income.

2. Maximize and catch up on your contribution room

The Income Tax Act does not limit contributions to IPPs, but it does define the amount of the life annuity payable upon retirement. The life annuity will be equal to 2% of annual income for each year of membership and is indexed yearly. This is the basis for determining the contribution limit for your IPP.

3. Let your money do the work

Your earnings are tax-sheltered, and you benefit from growing income thanks to compound interest. If the investments return is under 7.5%, the company may fill the gap. This special contribution is deductible for the company and non-taxable for you.