Independent practitioners, entrepreneurs and business owners have options available for retirement planning, tax deferral and maximizing compound interest.

An Individual Pension Plan (IPP) is a one-person maximum Defined Benefit Pension Plan (DB Plan) which allows the plan member to accrue retirement income on a tax-deferred basis. As such, an IPP must conform to the Income Tax Act (ITA) and its regulations (ITR) as well as the requirements of the Canada Revenue Agency (CRA) with respect to defined benefit pension plans. Here is a brief summary:

• The plan sponsor is an incorporated, active company
• The plan member is an employee of the corporation who earns T4 (or T4A or T4PS) income from the corporation
• The pension plan document indicates a formula defining the amount of benefit to be earned by the plan member
• Plan Investments must follow strict guidelines
• Plan sponsor contributions, as certified by an actuary, are deductible from corporate income
• Benefits paid out of the IPP are taxed upon receipt 

Contact your Independent Advisor to discuss your retirement strategy and business needs.