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What is an IPP?

An Individual Pension Plan (IPP) is a made-to-measure plan designed for company owners as well as self-employed individuals whose average annual income is generally over $100,000.

About the IPP:

  • A plan that is set up for one person only and funded by the company (tax-deductible)
  • A defined benefit plan that provides retirement income generally equivalent to
    2% of the average of the three highest annual salaries earned for each year of service credited
    * Subject to Canada Revenue Agency maximum
  • Allows savings to grow tax-free
  • Can be maximized by transferring the plan member’s RRSP


An IPP is often set up once a company has generated significant earnings and wants to avoid paying too much tax. Employers can choose to pay contributions into their IPP, which will be an expense for the company, reducing its earnings and therefore its tax burden.

Contributions made to the plan by the employer are not a taxable benefit for the plan member.

In other words, company owners can pay contributions into their own IPP to save money for their retirement and cut their company’s tax bill.

See the benefits