15 Reason Why You Should Consider A PPP

A Smarter Way To Save For Your Future®

• Over 20 years, assuming the same rate of return on assets as earned in an RRSP, the PPP®-member could have over $1,000,000 more in registered assets to retire on.

• There are 7 new types of tax deductions inside of a PPP® that you cannot find inside of an RRSP:
  
  • Greater annual deductions ranging from $2,001 at age 40to $18,231 by age 64 and beyond.
  • Terminal funding to enhance the basic pensions (up to $1,000,000 deduction).
  • Ability of the corporation to make tax-deductibles contributions to assist in the purchase of past service.
  • Special Payments (also tax-deductible) if the assets of the pension plan don’t return 7.5%.
  • Interest paid to lenders for contribution made for the PPP® is tax-deductible.
  • Investment management fees paid on any assets inside of the PPP® are tax-deductible.
  • Annual administration, trustee, actuarial fees are tax-deductible.

• Assets inside a PPP are trade-creditor protected.
• Required contribution owed by the corporation to the PPY® are provided super priority in a bankruptcy and rank above secured creditors like the banks.
• Assets inside of a PPP® can pass from generation to generation without triggering a deemed  disposition and because the funds do not end up in the estate, there are no probate fees either if other family members are also members of the PPP®.
• Transfers of commuted value pensions from large defined benefit pension plans to a PPP® (DB Component) do not generate any excess amount tax as normally found due to Income Tax Regulation 8517 triggering immediate tax savings to terminated employees.
• Pension Plans can avail themselves of the HST Pension entity Rebate (33% of all HST paid in connection with the pension plan is refunded to the corporation).
• While IPPs must cease all tax-deductible contributions if they are over-funded (considered in excess surplus), under a PPP®, the plan member can switch to the DC/AVC components, and while no contributions can be made to the DC account, up to 17% of salary can be made by the member.
• Double-dip:  members aged 38 and under paid $100,000 for example in the year of plan set up could make an $18,000 PPP® contribution and an $18,000 RRSP, assuming no earned income in the year 1990.
• Unlocking: not only are AVC assets unlocked at all times (by eliminating the AVC provisions from the plan text), but by reducing accrued benefits and creating surplus, additional funds can be withdrawn.
• U/L add-on: The large tax savings/ refunds created by the multitude of additional tax deductions could be used by the corporation to purchase and overfunded universal life (U/L) policy with the corporation designated as the death beneficiary thereby funding the policy with $0.00 cost.
• Early retirement: available as early as age 55, with pension income-splitting and $4,000 worth of pension being eligible for the pension amount non-refundable credit. RRIF income-splitting only starts at age 65.
• Flexibility: being able to switch between DB and DC every year helps control pension costs. But the superior tax deductions afforded DB plans isn’t lost in a “DC” year since the plan can be amended to convert DC into DB years (and allow for a past service contribution).
• Fiduciary and Governance: INTEGRIS offers a ‘pension committee’ service to ensure compliance and supervision with pension officers, compliance staff and lawyers at no extra cost.
• Purification for life time capital gains exemption: deductions created inside the company when purchasing past service, borrowing or doing terminal funding/ special payments, can purify a corporation for this special tax exemption (over $830,000).

A SMARTER WAY TO SAVE FOR YOUR FUTURE®

Personal Pension Plan