Individual Pension Plan (IPP)

An Individual Pension Plan (IPP) is a registered pension plan (RPP) – Opens a tooltip with defined benefits – Opens a tooltip designed for an individual. It's generally intended for a business owner or senior executive of a company. 

An advantages of an IPP

  1. The company pays 100% of the contributions – Opens a tooltip as the plan sponsor. The participant makes no contributions.
  2. With an IPP, tax-deductible contributions can generally be higher than for a Registered Retirement Savings Plan (RRSP).
  3. Administration and management fees can be charged to the company, making them tax-deductible
  4. Upon retirement, certain additional benefits can be added, leading to an additional contribution and deduction
  5. Assets held in an IPP cannot be seized, which means they are protected against creditors

Features of contributions to IPPs

  • Can be made every year, just like contributions to an RRSP
  • Depend on the participant's age and salary – the higher the age and salary, the more the company can contribute
  • Are 100% tax deductible for the company
  • Are not considered a taxable benefit for the participant
  • Depending on the applicable pension legislation, pensions resulting from contributions may be not locked-in
  • The value of a pension resulting from contributions may be converted into a RRIF or a LIF, depending on the applicable pension plan legislation


Higher contribution deductions

The participant can buy back years of service dating back to before the plan was setup. By making retroactive contributions for these years, the company can get a tax deduction that the participant wouldn't have been entitled to as an individual.

It's a win-win situation: greater retirement savings for the participant and a nice tax deduction for the company!

Protect retirement savings against market fluctuations

Every 4 years, IPPs undergo an actuarial valuation to establish the value of the benefits – Opens a tooltip (actuarial liabilities) and establish whether there is an actuarial surplus or deficit. In the case of a deficit, the company can make up the difference and deduct this investment from its revenues. The company can choose to pay it immediately, stagger payments over several years, or put it off indefinitely.

Who's eligible for an IPP?

You're eligible if you:

  • Are over 45 years old
  • Have a yearly salary of more than $75,000 (declared on a T4 slip) from a company considered a taxable corporation under the Income Tax Act
  • Have accumulated  years of service to be entitled to make contributions
  • Are a connected person, that is, a person who owns at least 10% of the issued shares of any class of the capital stock of the company. To set up an IPP for an employee who isn't a connected person, contact us directly

Which plan is right for you? Check out the Retirement savings plan table.


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