Pension Plans for Business Owners & Key Executives using Retirement Compensation Arrangement (RCAs) RCA’s Made Easy Using the RRSP Wrap TM This material is for information purposes only and should not be construed as legal or tax advice. Every effort has been made to ensure its accuracy, but errors and omissions are possible. Individual circumstances may vary and specific legal and tax advice is recommended. This strategy is based on current tax legislation. Future tax changes and market conditions may affect this program. © Retirement Compensation Funding Inc.

Ask Yourself… Do you think RRSP contribution levels are too low? Are you worried that your RRSPs will provide an inadequate pension? Would you like a 100% corporate tax deductible solution to your supplemental pension needs?

Do you think RRSP contribution levels are too low?

Are you worried that your RRSPs will provide an inadequate pension?

Would you like a 100% corporate tax deductible solution to your supplemental pension needs?

The Facts…. Those earning significant T4 income will experience a pension discrimination due to legislative and funding limits in Registered Pension Plans (RRSPs, IPPs, and MPPPs) Executives of Public Corporations may have a top-hat plan or “SERP” to supplement their retirement income due to funding limits in Registered Pension Plans Small Business/Private Corporation Employees usually don’t have that luxury in most cases to setup a SERP to fund retirement income on a cash flow basis

Those earning significant T4 income will experience a pension discrimination due to legislative and funding limits in Registered Pension Plans (RRSPs, IPPs, and MPPPs)

Executives of Public Corporations may have a top-hat plan or “SERP” to supplement their retirement income due to funding limits in Registered Pension Plans

Small Business/Private Corporation Employees usually don’t have that luxury in most cases to setup a SERP to fund retirement income on a cash flow basis

Good News! The RRSP Wrap TM An RCA can be wrapped around RRSPs to make up the shortfall The RCA is defined in subsection 248(1) of the Income Tax Act The IPP Wrap TM is also available to be wrapped around IPPs to make up the shortfall

An RCA can be wrapped around RRSPs to make up the shortfall

The RCA is defined in subsection 248(1) of the Income Tax Act

The IPP Wrap TM is also available to be wrapped around IPPs to make up the shortfall

Contributions 100% tax deductible from pre-tax corporate earnings not taxable in owner/executives hands until withdrawn at retirement No funding caps or the past service funding limit of a normal pension standard or limitations like an IPP Can be made post-retirement as part of a buyout/exit strategy for the Business Owner

100% tax deductible from pre-tax corporate earnings

not taxable in owner/executives hands until withdrawn at retirement

No funding caps or the past service funding limit of a normal pension standard or limitations like an IPP

Can be made post-retirement as part of a buyout/exit strategy for the Business Owner

Who Qualifies Owner/Managers Must be incorporated Company earning profits above Small Business Limit ($500,000) T4 income in excess of $125,000-$150,000 Key Executives Salary in excess of $125,000-$150,000 Usually at least 10 years to retirement

Owner/Managers

Must be incorporated

Company earning profits above Small Business Limit ($500,000)

T4 income in excess of $125,000-$150,000

Key Executives

Salary in excess of $125,000-$150,000

Usually at least 10 years to retirement

Trustee An RCA Trust can last as long as 30-40-50 years! A corporate trustee is strongly recommended. R c F uses BMO Trust Company as the corporate trustee Assets in 3 rd Party Corporate Trustee provides maximum creditor protection and assurance to Plan Member/Beneficiaries. BMO is highly experienced in RCA administration Penalties for non-compliant RCA can be severe. Specially reduced trustee fee arrangement for R c F Clients only.

An RCA Trust can last as long as 30-40-50 years!

A corporate trustee is strongly recommended.

R c F uses BMO Trust Company as the corporate trustee

Assets in 3 rd Party Corporate Trustee provides maximum creditor protection and assurance to Plan Member/Beneficiaries.

BMO is highly experienced in RCA administration

Penalties for non-compliant RCA can be severe.

Specially reduced trustee fee arrangement for R c F Clients only.

R c F RCAs Include… CRA compliant methodology and RCA ledgers that show both Conventional & Insurance (tax-sheltered) Funded ledgers Unique Insurance Funded RCA Ledgers that’s fully integrated with RTA & limits mortality cost Triennial review of RCAs to ensure funding levels remain onside with the CRA RCAs are monitored to ensure they are not misused or abused Long history and experience in RCAs and large case insurance underwriting

R c F RCAs Include…

CRA compliant methodology and RCA ledgers that show both Conventional & Insurance (tax-sheltered) Funded ledgers

Unique Insurance Funded RCA Ledgers that’s fully integrated with RTA & limits mortality cost

Triennial review of RCAs to ensure funding levels remain onside with the CRA

RCAs are monitored to ensure they are not misused or abused

Long history and experience in RCAs and large case insurance underwriting

Win! Win! Win! Win! Win! Win! Tax deferral Taxes are deferred until distributions at retirement Tax sheltering Investment earnings tax sheltered with PENSION Plus TM Asset protection Third party trustee/Creditor protection Exit strategy Retirement income/Sale of company/Family succession. Golden Handcuff for Key Executives Attract and retain valuable key executives Pension Loss Recovery Recover investment losses from RRSPs, DCPP, MPPP

Tax deferral

Taxes are deferred until distributions at retirement

Tax sheltering

Investment earnings tax sheltered with PENSION Plus TM

Asset protection

Third party trustee/Creditor protection

Exit strategy

Retirement income/Sale of company/Family succession.

Golden Handcuff for Key Executives

Attract and retain valuable key executives

Pension Loss Recovery

Recover investment losses from RRSPs, DCPP, MPPP

Questions? What more info? See R C F Library at www.rcf.ca for advance RCA articles, Research Papers, and Technical Interpretations. View the online presentation at www.rrspwrap.ca Contact Pierre at 416.364.6444 x225

See R C F Library at www.rcf.ca for advance RCA articles, Research Papers, and Technical Interpretations.

View the online presentation at www.rrspwrap.ca

Contact Pierre at 416.364.6444 x225