With a DPSP, you can share a portion of your company’s profits with your employees. This kind of plan is often combined with a group RRSP.
Advantages
For employers | For employees |
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- Helps drive employee engagement
- Contributions and operating costs are tax-deductible
- Provides flexibility and discretion in terms of employer contribution amounts
| - Gains grow tax-free
- Accumulate savings without having to make contributions
- Variety of investment options to choose from
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Contributions
Employer | Employee |
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- Minimum contribution amounts based on previous years’ profits
- Owners with at least 10% stake in company shares aren’t eligible for plan
| - No employee contributions
- Employer contributions vested after no more than two years
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Details
Administration | Investments |
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- Plan needs to be registered with Canada Revenue Agency
- Administered by trust
- No annual meeting required
- No regulatory fees
| - Either employees or administrator responsible for investment choices
- No investment policy required
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Note
This text is for information purposes only. Refer to the policy for all conditions, exclusions and restrictions.