Defined contribution pension plan

With a DCPP, you’ll help your employees build up their retirement savings by making employer contributions. Your employees can also contribute a percentage of their salary.

Advantages

For employers

  • Promotes employee engagement and loyalty
  • A great addition to employee benefit package

For employees

  • Provides retirement income in addition to government benefits
  • Tax advantage: employer contributions don’t count as salary
  • Investment income grows tax-free

Details

Employer contributions

  • Must equal at least 1% of payroll for participating employees
  • Locked in

Employee contributions

  • Payroll contributions locked in
  • Additional voluntary contributions not locked in

Administration

  • Plan needs to be registered with province, federal government and Canada Revenue Agency
  • Subject to regulatory fees
  • Plan administered in most provinces by board of trustees (in Quebec, can be administered by retirement committee or employer)
  • Annual meetings required in Quebec only

Investments

  • Either employees or administrator responsible for investment choices
  • In most provinces, investment policy required (not always in Quebec)

This text is for information purposes only. Refer to the policy for all conditions, exclusions and restrictions.