Individual Pension Plan

An Individual Pension Plan (IPP) is a defined benefit pension plan. It provides senior executives and business owners with the opportunity to achieve maximum tax relief combined with maximum retirement pension. The IPP is a sound business decision for both entrepreneurs and executives who have the income to support a more aggressive tax deferral arrangement.

Standard Life makes the administrative and reporting responsibilities of the sponsoring company less burdensome.

To qualify for an IPP, a member must:

• have T4 income.
• be an employee of an incorporated company which is taxable under the Income Tax Act (ITA).
• be age 40 or more and earn a minimum of $75,000 from the company sponsoring the IPP.

Sponsor advantages

• Guaranteed lifetime income - the IPP offers a predictable retirement income.
• Tax advantages - all contributions and administration expenses payable and paid by the plan sponsor are tax deductible.
• Tax deductible contributions are often larger than under an RRSP.
• Past service funding - for executives and high earner, the IPP funding formula may, under certain circumstances, recognize past service and be more generous than RRSP.
• Ownership of plan assets - depending on the plan rules and ITA restrictions, any actuarial surplus at retirement may be granted to the member.