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Key questions

At the time of retirement, the participant receives from the plan a pension corresponding to 2% of the indexed employment earnings for each of the years recognized by the plan.

IPP contributions are made by the employer and are tax deductible. When the IPP is established for a business owner in Quebec, the employer has no obligation to contribute to the IPP.

What is an IPP?

An IPP is a defined benefit pension plan for a single participant (or 2 if the spouse is included) registered with the CRA that allows to accumulate more assets tax-sheltered than the RRSP.

  • between ages 40 and 71; and

  • receiving T4 employment earnings from their company (dividends are not eligible).

Who is a good candidate?

The IPP is for business owners / incorporated professionals who are:

  • Higher contributions allowed in the IPP than in the RRSP each year

  • Additional contributions can be made to cover the initial actuarial deficit resulting from the recognition of past service, if applicable

  • Contributions paid by the employer (avoids payroll taxes)

  • Contributions and fees are tax deductible for the employer

  • Additional contributions can be made if investment returns are inadequate

  • Assets are protected against creditors

Benefits of an IPP

When used properly, the IPP is a very effective retirement vehicle that is far superior to the RRSP for retirement planning.

Please note that the contributions listed below are for the current service only and do not include any additional contribution that could be made to cover the actuarial deficit, if applicable.

Maximum contributions

Please find below a table comparing the IPP maximum contributions to those of the RRSP in 2024.

TableauCot_2024_EN.png
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