Individual Pension Plans in British Columbia

For most individuals, a Registered Retirement Savings Plan (RRSP) can be an ideal way to save for retirement. However, for others, such as many small business owners and professionals, RRSP contribution limits may be insufficient to provide an adequate retirement income. An Individual Pension Plan (IPP) is one alternative that can be an attractive retirement vehicle for the right person.

Designed for owners and key employees of incorporated small businesses, an IPP is a defined benefit pension plan that can provide greater tax deferred contributions than those available through an RRSP. Similar to an RRSP, it allows money to accumulate over time, tax sheltered, in an account to provide you with retirement benefits.

What are the key benefits?

• Potential for a significant, deductible lump sum as the plan can be made retroactive to 1991
• Possibility of making additional contributions for early retirement benefits
• Employees are not taxed until withdrawals from the plan are made
• Pension benefits offer creditor protection under current pension legislation

To implement an IPP, you will need the services of an actuarial firm to set up the plan with the proper authorities and handle ongoing administration. Once the plan has been filed and registered, an investment account for the IPP is opened at ScotiaMcLeod.

Working with the appropriate group of professionals, opening and administering an IPP is easy. If you have own a corporation, are over 40 years old and have T4 income over $125,000; an IPP may be right for you. If you would like to see how an IPP could benefit you fill out these simple forms. We would be happy to show you how an IPP, as part of your overall retirement income plan, could be right for you.