Deferred profit sharing plan

With a DPSP, you can share a portion of your company’s profits with your employees. This kind of plan is often combined with a group RRSP.

Advantages

For employers

  • Helps drive employee engagement
  • Contributions and operating costs are tax-deductible
  • Provides flexibility and discretion in terms of employer contribution amounts

For employees

  • Gains grow tax-free
  • Accumulate savings without having to make contributions
  • Variety of investment options to choose from

Details

Employer contributions

  • Minimum contribution amounts based on previous years’ profits
  • Owners with at least 10% stake in company shares aren’t eligible for plan

Employee contributions

  • No employee contributions
  • Employer contributions vested after no more than two years

Administration

  • Plan needs to be registered with Canada Revenue Agency
  • Administered by trust
  • No annual meeting required
  • No regulatory fees

Investments

  • Either employees or administrator responsible for investment choices
  • No investment policy required

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