Last updated: May 26 2021
One of the most fascinating educational sessions at the May 20 CE Summit was given by JP Laporte BA, MA, JD, RWM, on the benefits of Personal Pension Plans. As the proprietorship tax filing deadline is coming up soon on June 15, it is a conversation advisors might want to have with clients who are thinking about incorporating and planning their wealth accumulation strategies at the same time. Consider 5 fundamental reasons for doing so:
But in addition, the financial opportunities are significant:
The smaller, owner-operator submarket of the private sector with the key shareholders and their families in mind will find the PPP especially valuable.
Notably, the law relating to RPPs restricts the provision of pension solutions to individuals who are classified as “employees”. As a result, the following types of potential clients are not eligible under the current rules:
As with all general rules, there are exceptions of note. For example, while a “Partner” in a law firm would normally be ineligible to participate in a pension plan, if the partnership decides to hire one of the partners as their “Chief Executive Officer” to assist the running of the law firm, and pays that individual a salary, the CEO would be eligible for a plan.
Likewise, a business owner that receives the bulk of her compensation from her corporation via dividends but also receives a salary, as the President would be eligible for a pension plan. The fact that dividends form part of the overall compensation mix does not prevent the establishment of a plan.
For further detail on how to advise clients, and to learn more about this interesting way to accumulate wealth, enrol in the Personal Pension Planning Certificate Course from Knowledge Bureau today.
Missed the CE Summits and the Advanced Retirement and Estate Planning course that comes with it? Enrol now and receive access to the recorded presentations.