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?
- 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
- Can usually choose to contribute more, up to a limit
- Depending on your plan, you may have input on how your money is invested
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