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

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

3. 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. |

4. 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. |

5. 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. |

6. 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. |

7. 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. |

8. 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. |

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

10. 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. |

11. 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. |

12. 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. |

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

14. 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