IPP – Individual pension plan

The IPP is a defined benefit plan designed for a single person. Unlike RRSPs, the amount of benefits payable upon retirement is predetermined, and not the amount of allowable contributions.

The annual amount of contributions is determined by an actuary based on various factors such as age and revenue. An IPP usually allows you to contribute tax-deductible amounts higher than for an RRSP.

Advantages of an IPP

All IPP contributions and management fees for the plan are tax deductible. The employee makes no contributions.

For business owners or senior managers whose income requires a greater income tax deferment strategy, an individual pension plan (IPP) may be an excellent option.