Individual Pension Plans

For many company owners and professionals that are focused on managing and building their business, retirement is often an afterthought. The demands of the organization often take priority over personal retirement and financial planning matters. Successful entrepreneurs that have generated strong growth in the value of the companies they own sometimes have retirement savings accounts that are woefully inadequate. From a tax planning and risk management perspective this may not be the best retirement strategy.

Traditionally, RRSPs are used by most business owners to save for retirement because they offer tax deductions for amounts contributed and tax deferral for growth in assets. However RRSP contribution limits do not allow many affluent business owners the opportunity to save enough to maintain their desired standard of living in retirement.

To address this potential shortfall, some individuals will work beyond their desired retirement age. Others may take a more aggressive approach when investing their RRSP portfolios than they would normally be comfortable with in hopes of achieving higher returns and greater retirement wealth.

An Individual Pension Plans (IPP) is a unique retirement planning solution that has become increasingly popular among business owners, professionals and executives. An IPP is a defined benefit pension plan typically established for the benefit of one person. IPPs offer the following advantages compared to RRSPs:


  • Up to 65% more in tax-deductible contributions can be made into an IPP vs. an RRSP

  • Additional tax deductible contributions can be made by your company should the investment return on IPP assets be less than 7.5% a year

  • IPP is designed to deliver a pre-determined lifetime pension

  • IPP assets are protected from creditors

  • Opportunity for a significant tax deductible contribution at retirement

  • Contributions, set-up & administration fees as well as investment fees are all tax deductible to your company

IPPs have been around for many years but due to higher costs for plan set-up and ongoing management in the past, they were not as widely used. With increased market awareness and competition, IPPs have become more affordable and accessible for virtually any business owner or professional.

At BMO Nesbitt Burns we offer a turnkey IPP solution that combines professional investment advice and custody of plan assets along with the services and support of an established independent actuarial firm, as well as a corporate trustee arrangement. For the opportunity to see if an IPP is suitable for you and your company please contact our team at 416-359-5603 or email Brian Slessor.