Group RRSPs
Profit Sharing Plans
Retirement Compensation Arrangements
Both a plan document and a trust document must be prepared, including wording that covers the basic registration requirements. It is possible for the two documents to be combined, and it is also possible to register specimen documents which contain a short list of variables that con change from plan to plan. Basic requirements for the terms of the plan and trust include:
- Reference to the contribution limits specified by the Income Tax Act.
- Minimum vesting periods, in the event that a member terminates service.
- Contributions can be made only for beneficiaries of the plan, or as a transfer from another registered plan.
- Member rights under the plan may not be assigned.
- The trust may not invest assets of the plan in notes, bonds, or debentures of the employer, or of an organization 50% of which consists of those securities of the employer.
The maximum contribution that an employer may make to a DPSP in respect of a member is the lesser of (a) 18% of the member's compensation, and (b) a dollar limit which has been set at 50% of the money purchase limit that applies to Registered Pension Plans. Note that employees may not contribute to Deferred Profit Sharing Plans.
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