A registered pension plan (RPP) is one option for employers choosing a retirement plan for their employees.
RPPs are both federally and provincially registered, as described in the Income Tax Act and created by a sponsor (typically an employer or board of trustees). Contributions are made both by the plan sponsor and by the plan members (typically employees). These contributions are determined by the provisions in the plan and are generally fully deductible in the year of contribution. Plan members then receive either a defined contribution (account balance) or a defined benefit (monthly pension) at retirement.
The plan is registered with the Canada Revenue Agency by the employer’s actuary and/or a consultant.
Participation in an RPP will reduce a participant’s available registered retirement savings plan contribution room.