TaxBites – May 2015

Dear clients and friends,In our most recent Issue of TaxBites, we discussed a relatively new product in the retirement savings market; the Personal Pension Plan or PPP.  As you may recall, a key advantage of the PPP versus the RRSP is the ability to tax-shelter significantly more money.  Higher annual contributions, plus the ability to dump in an initial amount (called the “past service buy back”), ultimately lead to a much larger pool of funds at retirement.

Rather than using personal dollars, the funds that are invested in a PPP are tax-deductible corporate contributions. In addition, a number of deductions for investment fees and expenses are allowed under a PPP that are not permitted in an RRSP.

Several clients called us to ask how the PPP compares to an RRSP at their specific age and we thought it best to share this information with everyone.  The table below gives you an indication of the advantage of the PPP in the year of plan establishment.  And you can see that the PPP has higher contribution limits each year, so the advantage versus RRSPs grows even larger over time.

Age at plan start Personal Pension Plan RRSP PPP Advantage in First Year
Past Service Buy Back* Annual Contribution Limit Annual Contribution Limit
40 $11,330 $25,196 $24,270 $12,256
45 $44,147 $27,677 $24,270 $47,554
50 $80,195 $30,402 $24,270 $86,327
55 $119,791 $33,395 $24,270 $128,916
60 $163,286 $36,683 $24,270 $175,699
64 $201,146 $39,544 $24,270 $216,420

*Assumes you incorporated January 1, 2002 and earned maximum income since

If you are interested in a fully customized quote, please contact me.

Best regards,

Todd Roberts, B. Com. , CDPM
Vice President
PROTECT Insurance Agencies Inc.
101 Duncan Mill Rd., Suite 103
Toronto, ON M3B 1Z3
Tel: 416-391-3764, ext. 233
Toll free: 1-866-919-3764
Fax: 416-391-5451


The views expressed in this commentary are those of Protect Insurance Agencies Inc. (Protect) at the date of publication, are subject to change without notice, and are not represented to be error free. This commentary is presented only as a general source of information and is not intended as a solicitation to buy or sell specific insurance products or investments, nor is it intended to provide tax, legal or accounting advice in general or specific to your circumstances. Buyers should review all documents relating to any insurance or investment carefully before making a decision and should ask their advisors for guidance based on their specific circumstances. Protect assumes no responsibility for how you use the information you obtain from this commentary. E. &. O.E.

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