|
Retirement Compensation Arrangement (RCA)
A Retirement Compensation Arrangement (RCA) allows an employer
to pre-fund retirement benefits of employees without setting up
a registered pension plan.
Since this is not set up as a registered plan, it does not affect
an employee's ability to contribute into an RRSP plan as well.
In essence, an RCA is a taxable trust set up by an employer to
hold funds for retirement.
RCAs are most commonly used for:
Owners of privately held corporations
Corporate executives with salaries above $85,000
Individuals who may wish to retire outside of Canada.
Please contact an representative at W.P.G. for more information on Retirement
Compensation Arrangements.
Individual Pension Plan (IPP)
An Individual Pension Plan (IPP) is a registered pension plan set
up for a single person.
Unlike an RCA, an IPP does have an effect on an employee's ability
to contribute into RRSPs.
The employer is responsible for contributions as well as the fees
associated with the IPP plan. The fees associated with setting up
an IPP can be high, but they are also tax deductible.
There are two basic types of IPPs available:
Shareholder Pension Plans - for owner-managers
who control over 10% of company shares.
Executive Pension Plans - for employees or owners
who hold less than 10% of company shares.
It should be noted that IPPs are not available for partners or proprietors
of a company. In such cases, an RCA may be considered.
Please contact a W.P.G. representative for further information on Individual
Pension Plans.
back to top
Supplemental Executive Retirement Plans (SERP)
RRSP and pension plans can only supply sufficient retirement income
for their members up to a certain level of income.
For employees earning in excess of $86,000.00/year, a supplemental
executive retirement plan can provide an increase in the amount
set aside for retirement savings.
Please contact W.P.G. with any inquiries into Supplemental Executive
Retirement Plans and any other wealth planning needs.
|
