Defined Benefit Plans

With defined benefit plans, the amount of the pension is established contractually through a set formula. The amount of the employer’s contribution is determined by actuarial valuation.

Registered Pension Plans (RPPs)

With a registered pension plan (RPP), the employer makes contributions, and the employees may or may not contribute, according to the Plan Text. The funds accumulated in a RPP cannot be withdrawn before retirement (except for voluntary contributions) since they will be used to provide retirement income.

Individual Pension Plans (IPPs)

An individual Pension plan (IPP) is entirely financed by the employer. It is designed primarily for high-income employees who are 45 years of age or older, such as company managers. An IPP enables you to obtain the maximum tax advantages from a pension plan. It is generally established for a single individual and permits higher contributions than a registered retirement savings plan (RRSP). For companies, an IPP is an effective way of recruiting and retaining key employees.

Supplemental Executive Retirement Plans

A supplemental executive retirement plan is a non-registered pension plan that is established for people whose benefits have reached the tax limits under a registered plan. There is no limit on benefits. A supplemental executive retirement plan is financed through a retirement agreement, and the assets belong to the plan.