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You are here: Home > Business > Group plans > Group retirement savings solutions > Simplified pension plan (SPP)

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Simplified pension plan (SPP)

A turnkey solution for employers!

  • Affordable and easy to set up
  • Flexible in terms of eligibility, enrolment, contributions, etc.
  • Tax relief: contributions and administration fees are tax-deductible
  • Contibutions are exempt from payroll taxes
  • Desjardins looks after the day-to-day administration

Features

Our SPP is a defined contribution pension plan offered in Quebec only.

  • Minimal eligibility conditions: an employee must have worked for the company for at least 700 hours or received a salary greater than 35% of the maximum pensionable earnings (MPE) in the previous year.
  • The employer decides whether enrolment is mandatory or optional.
  • The employer determines employer and employee contribution rates.
  • The employer decides whether employee contributions will be locked-in or not.
  • In addition to their regular contributions, employees can make voluntary contributions which are not locked-in.
  • Employer contributions can be 1% of employee salary or more, and they're locked-in.
  • Immediate vesting of employee and employer contributions.
  • In the event of the participant's death, the retirement fund and the spouse are protected.
  • Employees can use their regular contributions (at the employer's discretion) or voluntary contributions for the Home Buyers' Plan (HBP) or Lifelong Learning Plan (LLP). The funds must be transferred to an RRSP first.
  • Here's how transfers work:
    • Locked-in funds can be transferred from a supplemental pension plan or a locked-in retirement account (LIRA) to the SPP's locked-in account
    • Non-locked-in funds can be transferred from a supplemental pension plan or an RRSP to the SPP's non-locked-in account
    • Non-locked-in funds can be transferred from a DPSP to the SPP's non-locked-in account, unless the employer decides that these funds belong in the locked-in account
    • Please note that no transfers are permitted between locked-in and non-locked-in accounts.
  • For all types of businesses, unions or associations.

Employers benefit from:

  • Easy administration - Desjardins will handle it
  • Easy implementation
  • Protection for supplemental pension plans
  • No payroll tax on contributions
  • Attractive tax rules

Employees benefit from:

  • Predetermined, tax-deductible contributions
  • Immediate tax savings: contributions are deducted from their gross earnings
  • Tax-free investment income
  • Active participation: choice among several available investment options
  • Funds (contributions and investment income) cannot be seized
  • The ability to make additional contributions (employee and employer)
  • In the event of the participant's death, the retirement fund and the spouse are protected

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