Simplified pension plan (SPP)
What is an SPP?
An SPP is a defined-contribution plan that's set up for your company but administered by a financial institution.
Advantages
For employers
- Straightforward administration handled by Desjardins Insurance
- Easy to set up
- Beneficial tax rules
For employees
- Contribution amounts predictable
- Immediate tax savings, since contributions deducted at source
- Contributions accumulate tax-free
Contributions
Employer
- Minimum contributions required, and additional contributions an option
- Locked in until retirement
Employee
- Permitted
- May or may not be locked in until retirement (at employer's discretion)
- Spousal contributions not permitted
Details
Administration
- Plan needs to be registered with Retraite Québec and Canada Revenue Agency
- Regulatory fees paid via Desjardins Insurance
- No annual meeting required
Investments
- Employees responsible for their investment choices
- No investment policy required