Registered pension plan (RPP)
Retirement income that works for you
Take advantage of tax benefits and employer contributions to save for your future.
A tax-deductible way to save
The money you contribute is tax-deductible, so you’ll save more of your income.
A tax-deferred way to invest
You won’t pay tax on your investment earnings until you withdraw them.
Extra help from your employer
Your employer or sponsor doesn’t just set up an RPP – they also contribute to it.
What is a registered pension plan (RPP)?
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.
How does it work?
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
Have a savings plan through your employer?
Use your online account to check your balance, make additional contributions, manage your personal information and more.
What are the different types of RPPs?
Defined contribution plans
- 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
Defined benefit plans
- 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?
| Registered pension plan (RPP) | Registered retirement savings plan (RRSP) | Tax-free savings account (TFSA) | |
|---|---|---|---|
| What is it for? | Retirement savings | Retirement savings or other long-term expenses | Anything |
| Who contributes? | Employer is required to contribute Employee can choose to contribute | Employer can choose to contribute Employee contributions can be voluntary or required | Only the employee can choose to contribute |
| How do taxes work? | Contributions are tax-deductible Employer contributions are exempt from payroll taxes Money is sheltered from taxes until payout | Employer contributions are treated as taxable income | Money isn’t subject to taxes going in or coming out |
| 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 |
| When can you withdraw your money? | Depending on your plan, you might be able to withdraw from the amount you’ve voluntarily contributed, but not from your required contributions | Employer might have restrictions in place | Anytime |
