Fact Sheet - Terminal Funding
When a business owner is selling the business or about to retire, transferring assets can trigger tax consequences. Personal Pension Plans (PPPs) do offer a retiring plan member with a one-‐time opportunity to upgrade the basic pension promised under the plan with additional benefits. The most common ancillary benefits include:
· Early unreduced pension benefits
· CPP bridge payments
· Indexing to Consumer Price Index
These benefits must be funded by the corporation sponsoring the PPP, assuming it has additional cash on hand. When a corporate sponsor of a PPP makes a one-‐time contribution to the PPP to settle the cost of the ancillary benefits, it can claim a supplemental tax deduction against its corporate income.
This process is known as “terminal funding”. It can occur when the member retires, or if the plan itself is terminated prior to retirement.
Fact Sheet - PPP Contributions
Contributions made to the INTEGRIS Personal Pension Plan (PPP) as a Registered Pension Plan (RPP) and those made to Registered Retirement Savings Plans (RRSPs) are subject to the maximum limits imposed by the Canada Revenue Agency.
Fact Sheet - Understanding the Power of Additional Voluntary Contributions
The INTEGRIS Personal Pension Plan is a collection of three distinct subaccounts (defined benefit (“DB”), defined contribution (“DC”) and additional voluntary contributions or “AVC”).