The Individual Pension Plan (IPP) allows for larger tax deductible contributions than an RRSP, potentially providing up to 65% more in retirement assets. The IPP is ideal for self-employed individuals or business owners age 38 or older earning over $122,222 annually. Contributions to an IPP can be much higher than an RRSP and increase based on age, with maximums ranging from $45,800 at age 40 to $276,900 at age 65. Assets in an IPP are locked in for retirement and protected from creditors. At retirement, the IPP provides predetermined monthly pension payments or other payout options like an annuity.

1. The Individual Pension Plan (IPP)
Get up to 65% more into your Key Benefits
retirement assets than an RRSP
• Allows for larger tax deductions
The Individual Pension Plan is a de ned bene t • An excellent way to increase retirement
pension plan. The ideal candidate for an assets and have your company make large
Individual Pension Plan is age 38 or over and tax deductible contributions
earns in excess of $122,222 annually. If you • Allows a signi cant tax deductible
contribution at retirement
have made full use of your RRSP room, the IPP
will provide increased retirement assets. • Safer investment rules and limitations
compared to the RRSP
• Allows for additional tax deductible
IPP and RRSP Comparison contributions to be made by the company
should the rate of return on plan assets be
Contributions are graduated by age, therefore less than 7.5% a year
the older you are, the more you can contribute. • Pension plan surpluses belong to the
IPP contributions rst exceed RRSP member
contributions around age 38. • Provides pre-determined retirement bene ts
RRSP Maximum for 2009 is $21,000. • Ability to “succession plan” when family
members work in the business
IPP MAXIMUM ALLOWABLE CONTRIBUTIONS • 100% creditor proo ng of plan assets
AGE IN PAST SERVICE CURRENT
• No deemed disposition of plan assets upon
2009 FROM .1.1991** S ERVICE
death. Plan assets remain in the plan to
40 $45,800 $22,200
provide bene ts to surviving members.
45 $83,800 $24,400
50 $125,500 $26,800 All costs associated with the pension plan are
55 $171,300 $29,500 tax deductible to the company.
60 $221,600 $32,400
65 $276,900 $35,500 Locked-In: The assets in an IPP are locked-in
69 $193,000 $30,800 and with certain exceptions, may be used for
retirement purposes only. This helps protect
Amounts certi ed by actuary to fund de ned your retirement bene ts.
bene ts*
Actuarial Assumptions: Retirement
The following are assumptions used by an Actuary to When you retire you will have a choice of
calculate the contributions limits illustrated in these charts.
retirement vehicles. The choices are:
Maximum earnings = $122,222
a monthly pension from the plan,
Service History = full past service (Jan. 1, 1991 or earlier)
Earnings History = ** Past Service includes assumed
• an annuity,
maximum earnings from January 1, 1991 with RRSP • a LIF or an LRIF
Qualifying Transfer of $339,800
We have representatives across Canada.
Contact us for more information.
Nellie Chowbay, FMA, FMCI. BMO Nesbitt Burns
Investment Advisor
www.nelliechowbay.com
(416) 359-5365 nellie.chowbay@nbpcd.com
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