Anyone considered a connected employee of corporate sponsor getting T4 income. A good rule of thumb is having at least 10% + of the voting shares of the corporation sponsoring the PPP®. With respect to non-connected employees, they can join but the corporation sponsoring the PPP® but, depending on the province, may be held responsible for funding actuarial deficits.

The PPP is divided into three components: Defined Benefit (DB), Defined Contribution (DC) and Additional Voluntary Contributions (AVC). For the DB component: Corporate sponsor, Employee DC component: Corporate sponsor 1% of T4; Employee 0%- 17% of T4 up to the money purchase limit in the year ($27,830 in 2020) Employee deductions go against personal tax brackets.

If you are looking to setup a pension for yourself and seeking the optimum way to take an income tax efficiently, a mix of salary and dividends is ideal since dividends are not pensionable and thus 100% dividends precludes adopting a Personal Pension Plan.

The employee of the corporation and the spouse (beneficiary).

In short, yes. See Excise Tax Act Section 261.01. This is a 33% Refund issued by CRA to pension plan administrators (corporate sponsor) for all GST/HST paid in connection with the expense of the pension plan – under the trust platform only.

Yes, if your spouse has no pension benefits, up to 50% of the pension amount can be attributed to her/him so as to reduce personal taxation burden for the couple. Eligibility is as early as 50 years old.

Under section 147.4 ITA, RRSP transfers going into the Personal Pension Plan will continue to be tax-deferred using T2033 transfer form. When using a T2151 for a locked-in plan for the PPP® you can transfer to qualifying annuity.

Yes, absolutely! And, if you utilize pension income splitting as part of your tax saving strategy, as a couple you may claim up to $4000.

Just like an RRSP, your investment growth is tax-deferred until monthly pension amounts commence at retirement. You can go until age 71 similar to rules for taking RRIF payments after converting your RRSP.

For corporations paying corporate taxes at the Personal Service corporation tax rate, PPP contributions are eligible for tax deductions as per CRA administrative position.

INTEGRIS Pension Management will produce a T4A slip and distribute copies to the member, the corporate sponsor, the accountant and the Canada Revenue Agency.

Paying higher taxes for business and risk getting tax rate claw-backs due to passive income law. On average, over a 20 year period, RRSP vs PPP, that amounts to $1 Million. This value is larger if investment returns are below the CRA prescribed rate.

When you contribute monies from the corporation to the INTEGRIS PPP®, to ‘purify’ the corporation, the PPP® facilitates access to the Lifetime Capital Gains Exemption.

Audited Financial Statements are required for a pension fund if the assets exceed $3M (Ontario)

Only for plans that haven't filed for an Exemption from the Pension Benefits Act.

All PPPs set up after December 8, 2020 are exempt from this audit rule.

Only if commuted value transferred to a Locked In Retirement Account (LIRA) or Life Income Fund (LIF) None if pension paid out of PPP® or if transferred to a qualifying annuity under ITA 147.4

Notes to financial statements required to describe pension expense under CPA Handbook Section 3462.

The advisor receives their usual commission (e.g. 100 bps) as they would for any retirement plan account such as an RRSP, TFSA, IPP etc

Ongoing client relationship management and asset management is taken care of by yourself and Blue Alpha Wealth while ongoing back-end reporting and fiduciary oversight are taken care of by INTEGRIS and its back-office partner(s).

INTEGRIS Pension Management looks after billing the fee payable to INTEGRIS.

Yes, T4 salary income  is required for the PPP.

Yes, INTEGRIS Pension Management pension lawyers and actuaries can be retained to provide special consulting services on pension related issues.

No you don't, however, you will need an employment relationship with a T4 income to qualify.

A Limited Partnership, General Partnership, Joint Partnership (example, law firm) or even a Sole Proprietor could offer a PPP to its employee (ie. wife, kid) if the employee is receiving T4 income. However, the partners themselves or the sole proprietor would not be eligible for a PPP. Why? because they cannot employ themselves and pay themselves T4 income.

No, they don't.

The company or Professional Corporation sponsors the plan. The trustees hold the assets on behalf of the members and their beneficiaries. No one truly ‘owns’ the pension plan, since it is a bundle of liabilities/promises and corresponding assets.

Yes, corporate clients who contribute to the Defined Benefit component of the PPP will be granted an extension of 120 days from the fiscal year end of the company to make the contribution and still have it deductible against corporate revenues earned during the company's fiscal year.

In general yes, you do. One of the main aspects of a pension plan is an employer / sponsor company that will make contributions towards a pension plan in which you, the beneficiary/owner, are a member of.

Not necessarily you don't need to be incorporated as a requirement. In order to qualify, however, you will be required to have an employment relationship with a T4 (salary) income.

A Limited Partnership, General Partnership, Joint Partnership (e.g. engineering or law firm) or even a Sole Proprietor could offer a PPP to its employee such as a spouse if the employee is receiving a salary T4 income. However, the partners themselves or the sole proprietor would not be eligible for a PPP.  Why? because they cannot employ themselves and pay themselves T4 income.

It's designed specifically to meet your needs today and for the future. Your tax saving and reduction needs today as a business owner in the form of tax deductions. Your retirement savings needs for the future. It recognizes that you as a business owner shouldn't be using a solution meant for the general population, an RRSP, and helps you take advantage of generous pension laws whilst protecting you from creditors.

For a pension to be eligible it needs sponsorship. The company or professional corporation in this case sponsors the plan. The trustees (investment or insurance company you invest with) hold the assets on behalf of the members and their beneficiaries. No one truly ‘owns’ the pension plan, since it is a bundle of liabilities/promises and corresponding assets.

You are eligible for the pension credit (reducing the taxes otherwise payable) on the first $2,000 of pension income you receive. In addition, your spouse can use the pension income splitting rules to allocate up to 50% of the pension income to a spouse who is not in receipt of a pension, thereby potentially moving the PPP member’s tax bracket to a lower bracket and reducing the couple’s overall taxes in the process. When pension income splitting is used, the first $4,000 of pension income can be claimed as a ‘pension amount’ credit to further reduce your individual taxes.

There are 2 key instances where a PPP® would not be suitable for you:

1. Individuals who will treat the account as a special kind of short-term savings account to be used towards an upcoming expenditure before retirement. While it is possible to withdraw some funds in a certain situation or even opt for early retirement -- treating the PPP as a short-term savings account is not the best strategy.
2. Individuals who want to invest all of their money in a single security. If you think you've found the perfect stock and want to leverage all of the funds by concentrating on that stock, you will be prohibited from doing so in a PPP. Like all pension plans, you cannot hold more than 10% of a single security within your Personal Pension Plan.

In short, the new 2018 passive income tax law makes this harder. Retained earnings have already faced corporate taxes, albeit at a preferential tax rate. In addition, those profits will face ongoing further taxation if the annual investment gains exceed a threshold. The benefit of your PPP contributions is that they come straight from your revenues before they face corporate taxes. This is the power of the PPP.

Tax Free Savings Account (TFSA) Contributions 

You can always contribute to your TFSA at all times, whether you have a PPP or not.

RRSP - Pension Adjustments

Once you setup a this creates what's called a "Pension Adjustment" or PA.  The following year, the PA eliminates a lot of the RRSP contribution room generated during the year due to contributions you make to the PPP. RRSP contribution room in 2021 is based on earned income in 2020, thus the lag.  

However, some RRSP contributions are still permitted even with the PA.  For instance, in the first year, you can contribute to the PPP and to your RRSP.  Why? because the Pension Adjustment will only impact your RRSP room for the next year.

When you setup the PPP, in the first year your RRSP contribution can range from $6500 to $27,230 (2021).  In the following years, your RRSP contribution is capped at $600 because of the PA system.

Simply put, the Personal Pension Plan provides more flexibility than and Individual Pension Plan. In short, the PPP improves upon the main objections of the IPP. In particular, the PPP takes away the burden of having to ensure you make mandatory minimum contributions which can become burdensome especially if your cash flow doesn't allow for it. The IPP similar to a Define Benefit Pension has those types of requirements. Whereas the PP< which has the Defined Benefit component, also has a Defined Contribution component which provides flexibility when it comes to contributions. Get the PDF summary of the differences. Or, see a more in depth comparison of PPP vs IPP here.

Yes, you're able to convert the IPP into a PPP® and gain the tax deduction and savings advantages as well as having more flexibility when it comes to your cash flow. The process involves filing an amendment with the pension regulators and completing a few documents.

Yes, as long as you are taking T4 salary income.

For each member:

• Proof of age – copy of driver’s license/passport that shows the name and date of birth
• Latest Notice of Assessment
• Latest RRSP statement for all RRSPs/LIRAs/LIFs/RRIFs etc.
• Document to verify the SIN Number - e.g. a T4 slip or a notice of assessment if the full SIN number is available.
• T4’s for every year buying back past service (PLEASE NOTE THIS CAN TAKE UP TO 6 MONTHS – TIPS ON HOW BEST TO OBTAIN T4s BELOW)

For the company that is sponsoring the plan:

• Articles/Certificate of Incorporation for the company
• Document to verify the CRA Business Number of the company that is sponsoring the pension plan – e.g. the first page of a corporate tax return or the T4 slip that shows the employer number

Tips for obtaining T4s:

• Request from your corporate accountant
• Request through the CRA website
• Contact CRA by phone 1-800-959-8281