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Architect Investment Solution for IPP

Individual Pension Plans (IPPs) have become an increasingly popular retirement savings tool for business owners and professionals. IPPs are in demand as they offer a number of key advantages compared with Registered Retirement Savings Plans (RRSPs) for individuals between the ages of 38 to 71 who have income greater than $100,000, including: higher contribution amounts, full creditor protection of assets, the opportunity to make additional tax deductible contributions when investment performance is insufficient; and the ability to accumulate a much greater pool of capital for retirement.


Key Features

  • To qualify, the IPP plan member must be an employee receiving T4 income. The company sponsor must have the financial resources to fund the IPP on an ongoing basis.

  • Canada Revenue Agency requires a transfer from the plan member’s RRSP to offset the contribution generated for past service (i.e. years 1991 to 2008 or present). The qualifying transfer is determined by calculating the pension adjustment that would have been applied in each year of past service assuming the individual had been in a defined benefit pension plan during those years. The total of the pension adjustments for those years less $8,000 and any unused RRSP contribution room equals the qualifying transfer.

  • Expenses of the IPP (including actuarial consulting fees, interest on funds borrowed for contributions and investment related fees) are tax deductible when paid directly by the company sponsor.

  • Except in certain provinces, IPP assets are locked-in and may not be withdrawn until retirement.

  • IPPs offer the same termination, retirement and death benefits as other defined benefit pension plans.



  • For individuals over age 40, an IPP provides higher tax deductible ongoing contributions…the older the member, the greater the contribution.

  • Assets within an IPP can be protected from creditors.

  • In most cases, significant lump-sum past service contributions can be made when first establishing an IPP.

  • IPP contributions may be topped up if investment returns are insufficient to meet the actuarial valuations.

  • Significant tax-deductible lump sum contributions at the time of actual retirement are possible in most circumstances.


An IPP is a registered defined benefit pension plan typically established for the benefit of a single participant. An IPP is designed to provide a lifetime pension starting at a certain age. The amount of the pension is determined by a formula and the contributions equal the cost of providing that pension (as calculated by an actuary). Suitable candidates for an IPP are:

  1. small business owners,

  2. senior executives with the support of their company’s management, and

  3. professionals (e.g. doctors, lawyers, dentists and accountants) in provinces where they are allowed to incorporate.


BMO Nesbitt Burns Architect Program

The industry-leading BMO Nesbitt Burns Architect Program is Canada’s first full featured unified managed account that brings together the best of separately managed accounts with the best of mutual fund investing. It is the most sophisticated managed investment program available in Canada. The Architect Program allows you to experience the freedom from the responsibility of making your own day-to-day investment decisions and provides you with a peace of mind that your investments are being professionally managed in your best interests.


Architect Features

  • Customized investment solution

  • Better diversification, lower manager minimums and multiple investment products provide the ability to create strategically diversified portfolios

  • Consistent adherence to the investment policy statement – automatic rebalancing

  • Simplicity – one statement, one performance report and one tax summary report – giving you a clear picture of your total portfolio’s performance.

Architect offers the following model portfolios designed by BMO Nesbitt Burns Portfolio Management Advisory Group that are suitable for Individual Pension Plans:


Balanced 50/50 Models & Balanced 65/35 Models

As a balanced investor, you seek a combination of income-producing assets and investments with capital appreciation potential, so as to generate sufficient growth of capital. You want to preserve the purchasing power of your assets. To attain this goal, you are willing to accept more variable returns in the short run in order to achieve better potential returns in the long term. You have a moderate tolerance for risk and can tolerate losses through difficult phases in a market cycle.


Growth Models

Your objective is to preserve the purchasing power of your assets and generate some income. As such, you seek a combination of income – producing assets and investments with capital appreciation potential. Your investment horizon is reasonably long. You are willing to make investments characterized by greater than average risks and can tolerate periods of negative total return in difficult phases of a market cycle. If appropriate, you are willing to include fixed income investments in your portfolio.