Take advantage of tax benefits and employer contributions to save for your future.
An RPP is a plan your employer or plan sponsor sets up to provide you with retirement income. They’re required to contribute to it, and depending on your plan, you may be able to as well.
There are 2 different types of RPPs in Canada: defined contribution and defined benefit. Both types are registered with the Canada Revenue Agency (CRA) to provide you with tax advantages on both the money you contribute and the money your investments earn.
Your employer:
- Sets up an RPP and chooses which type of plan to offer
- Chooses how much they’ll contribute
- Decides whether you’re required to contribute and whether they’ll match your contributions, and facilitates payroll deductions
You:
- Can usually choose to contribute more, up to a limit
- Depending on your plan, you may have input on how your money is invested
Use your online account to check your balance, make additional contributions, manage your personal information and more.
- Your retirement income will depend on how much you and your employer contribute and how well it performs in the market
- Usually a percentage of your current income
- You and your employer or sponsor may both contribute
- Guarantees you a specific income at retirement
- Your retirement income is determined by a formula
- You and your employer or sponsor may both contribute
How is an RPP different from other group retirement savings plans?
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Registered pension plan (RPP) |
Registered retirement savings plan (RRSP) |
Tax-free savings account (TFSA) |
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What is it for? |
Retirement savings |
Retirement savings or other long-term expenses |
Anything |
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Who contributes? |
Employer is required to contribute Employee can choose to contribute |
Employer can choose to contribute Employee contributions can be voluntary or required |
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How do taxes work?
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Contributions are tax-deductible Employer contributions are exempt from payroll taxes Money is sheltered from taxes until payout |
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What if you leave the company? |
You keep all contributions, depending on your province's legislation |
You keep all contributions |
You keep all your contributions, and employer contributions aren't usually a factor |
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When can you withdraw your money? |
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Employer might have restrictions in place |
Anytime |
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