Individual Pension Plans Robert Rubino, CPA March.21, 2018 | RBC Dominion Securities Inc.

Managing all aspects of wealth May 30, 2019 RBC Dominion Securities Inc. |

What is an Individual Pension Plan? Company-sponsored Multiple companies can sponsor a single IPP. Registered Must comply with pension and fiscal laws and regulations Defined Benefit Funds are generally locked-in May 30, 2019 RBC Dominion Securities Inc. |

Incorporated business owners Suitable Candidates 37+ years of age Incorporated business owners Receiving T4 income Incorporated Professionals Looking to plan for the future Senior Executives May 30, 2019 RBC Dominion Securities Inc. |

Reasons to Establish the Plan Subject to the new passive income rules Diversify the retirement strategy Significantly increase retirement savings Attain a planned capital accumulation for retirement Corporate tax deduction – retain small business tax rate Generally considered creditor proof Succession Planning Assist in sale of business Retain Lifetime Capital Gains Exemption May 30, 2019 RBC Dominion Securities Inc. |

Diversifying the Retirement Strategy Corporate Personal Trust Holdco Account RRSP Account Opco Account (Active Business) IPP Account Shareholder 2 10%/20%/50% Shareholder 1 90%/80%/50% May 30, 2019 RBC Dominion Securities Inc. |

Flexibility of funding IPP assets are generally creditor protected Additional Benefits Flexibility of funding IPP assets are generally creditor protected Plan belongs to business owner/ member Succession planning opportunities Flexible retirement options May 30, 2019 RBC Dominion Securities Inc. |

Case Study IPP Illustration: Linda Personal requirements: Age: 50 years old Sole Owner with 100% ownership T4 Income of $145,000 RRSP assets of $573,810 Corporate Requirements Incorporated for 15 years Net Income of $100,000 Year Age RRSP Transfer ($) Past Service Cost ($) Employer IPP Current Cost ($) RSP ($) 2016 50 $400,000 $110,632 $32,772 $26,010 2026 60 - $67,538 $42,469 2031 65 $93,224 $55,505 May 30, 2019 RBC Dominion Securities Inc. |

Current and Past Service Contributions May 30, 2019 RBC Dominion Securities Inc. |

Eligible Employer Tax Deductions Current service contributions Past service top up contribution Contributions to shore up any future deficits Optional contribution at retirement (terminal funding) Interest on loan to make an IPP contribution Actuarial, administration and accounting fees Investment management fees May 30, 2019 RBC Dominion Securities Inc. |

Payment Options at Retirement Transfer IPP funds to a locked-in or partially locked- in RSP Pay pension from IPP at retirement Purchase an annuity from an insurance company May 30, 2019 RBC Dominion Securities Inc. |

Payment Options at Retirement Linda’s Summary RRSP vs IPP Authentic Corporate Tax Deductions Asset funding without impacting Linda’s marginal tax Largest Retirement Vehicle Flexible Pension framework to meet her goals Has piece of mind that the tax burden to the estate is covered An IPP that is 3x larger than an RRSP Total Corporate Tax Savings of over $200,000 The solution to Linda’s problems May 30, 2019 RBC Dominion Securities Inc. |

Thank you! May 30, 2019 RBC Dominion Securities Inc. |

The strategies, advice and technical content in this presentation are provided for the general guidance and benefit of our clients, based on information that we believe to be accurate, but we cannot guarantee its accuracy or completeness. This presentation is not intended as nor does it constitute legal or tax advice. Clients should consult their own lawyer, accountant or other professional advisor when planning to implement a strategy. This will ensure that their own circumstances have been considered properly and that action is taken on the latest available information. Interest rates, market conditions, tax rules, and other investment factors are subject to change. This presentation has been prepared for use by RBC Dominion Securities Inc.* and RBC DS Financial Services Inc. (collectively, the “Companies). The Companies and Royal Bank of Canada are separate corporate entities which are affiliated. In Quebec, financial planning services are provided by RBC DS Financial Services Inc. which is licensed as a financial services firm in that province. In the rest of Canada, financial planning services are available through RBC Dominion Securities Inc., and RBC DS Financial Services Inc. Insurance products are only offered through RBC DS Financial Services Inc., a subsidiary of RBC Dominion Securities Inc. Unless otherwise indicated, securities purchased from or through RBC Dominion Securities Inc. are not insured by a government deposit insurer or guaranteed by Royal Bank of Canada and may fluctuate in value. RBC Dominion Securities Inc.* and Royal Bank of Canada are separate corporate entities which are affiliated. *Member CIPF. ® Registered Trademark of Royal Bank of Canada. Used under licence. RBC Dominion Securities is a registered trademark of Royal Bank of Canada. Used under licence. ©Copyright 2007 Royal Bank of Canada. All rights reserved. 14