Deferred profit sharing plan (DPSP)
What is a DPSP?
With a DPSP, you can share a portion of your company's profits with your employees. This kind of plan is often combined with a group RRSP.
Advantages
For employers
- Helps drive employee engagement
- Contributions and operating costs are tax-deductible
- Provides flexibility and discretion in terms of employer contribution amounts
For employees
- Gains grow tax-free
- Accumulate savings without having to make contributions
- Variety of investment options to choose from
Contributions
Employer
- Minimum contribution amounts based on previous years' profits
- Owners with at least 10% stake in company shares aren't eligible for plan
Employees
- No employee contributions
- Employer contributions vested after no more than 2 years
Details
Administration
- Plan needs to be registered with Canada Revenue Agency
- Administered by trust
- No annual meeting required
- No regulatory fees
Investments
- Either employees or administrator responsible for investment choices
- No investment policy required
Set up a plan for your business
Looking to set up a group plan for your employees? Call us to talk about what you need.
1-800-361-2189 This link opens your phone app.
Call business customer service
Already have a group plan for your business? Call us for answers to your questions.
1-888-510-4762 This link opens your phone app.