Be Aware Of Tax Changes For Employees Part 3

RPP Contribution Maximums. It is a time when companies are struggling to fund their employees' pension plans. However, if you are entitled to one, and you are assured your company will be able to fund your retirement, your role in planning is to consider all the ways to maximize recent contribution maximums, and "backfillingî any available contribution room based on past services provided. For money purchase plans, the annual contribution limit will be $22,000 in 2010; thereafter the amounts will be indexed. For defined benefit plans, the maximum pension benefit per year of service will be $2,333 in 2009 and $2,444 for 2010. After this, the maximum benefit will be calculated as 1/9 the money purchase limit. Don't forget, you may be able to make past service contributions as well.

And if you are about to receive a pink slip and a severance package, consider maximizing your RRSP contribution. In some cases, legal fees for challenging the amount of severance offered will be deductible too.