An IPP is a defined benefit individual pension plan sponsored by a business and custom-designed for its owners and executives.

The distinctive advantage of an IPP is that it allows greater tax-deductible contributions than an RRSP and therefore provides the participant with a retirement income in line with his or her standard of living.

Comparison with an RRSP
Target market
Advantages for the participant
Advantages for the business
Investment options
Benefit payment options

Business owners and executives have high incomes and which require optimal tax-deferral strategies. An IPP is an interesting option since it offers more contribution room than an RRSP.

Potential savings of an IPP

	IPP	RRSP
Contributions	Variable based on the participant's age and salary	Limit determined according to tax laws
Benefits	Fixed based on the limit determined according to tax laws	Variable based on accumulated assets

Target market

• Business owner, executive, shareholder or professional
• 40 years of age or older
• Income greater than $75,000 per year
• Buy-back of past service for contributions
  

Advantages for the participant

• More contribution room than an RRSP
• Tax-sheltered accumulation
• Contributions paid by the employer
• Protection from creditors
• Funds are not locked-in
• Buy-back of past service possible on plan set-up
  

Advantages for the business

Investment options

DFS also offers a wide array of investment options:

• Daily Interest and Guaranteed Interest funds
• Variable-return term investments
• Segregated funds
  

Benefit payment options

The commuted value of an IPP can be transferred into:

• A life annuity
• A locked-in retirement investment vehicle
• The registered pension plan of a new employer
• An RRSP or a RRIF (QC only)