• Pension & Saving Plans

    Pension Plan

    Registered Pension Plan (RPP)

    Registered Pension Plan is basically a form of a trust that provides pension benefits for an employee of a company upon retirement. RPPs are registered with the Canada Revenue Agency (CRA). Employee and the Employer, or just the employer make contributions to this Plan until the employee resign or leaves. Any contributions made to a Registered Pension Plan (RPP) are tax deductible for both the employee and the employer.

    Saving Plans

    Registered Retirement Savings Plan (RRSP)

    Registered Retirement Saving Plan (RRSP) is a retirement saving plan to promote savings for retirement by employees. A person registered with this plan or his spouse or common-law partner can contribute to this plan. Any contributions made in this plan can also be used to reduce tax. Any income that a person earn in the RRSP is usually exempt from tax for the time the funds remain in the plan. However, a person generally has to pay tax when that person cashes in, make withdrawals, or receive payments from the plan.

    Deferred Profit Sharing Plan (DPSP)

    Deferred Profit Sharing Plan (DPSP) is an employer-sponsored Canadian profit sharing plan that is registered with the Canadian Revenue Agency (CRA). On a periodic basis, the employer shares the profits made from the business with all employees or a designated group of employees. Employees receiving a share of the profits paid out by the employer do not have to pay federal taxes on the money received from the DPSP until it is withdrawn.

    Annual Contributions to the Plan

    Below is various contributions to the registered plans in Canada

    Registered Plans in Canada Annual Contribution  limit 2012 Annual Contribution limit 2013
    Registered Retirement Savings Plan(RRSP) 22970 23820
    Deferred Profit Sharing Plan (DPSP) 11910 12135
    Buyback 3500 3500
    Tax free saving account 5000 5500
    Defined Contribution Plan 23820 24270
    Defined Benefit Plan (DBP) 2647 2697

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