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Quiz: Individual Pension Plan (IPP)

6 questions

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1 What makes a pension plan a designated plan, and what follows? Being registered after a specified date; it is then exempt from actuarial valuation Being sponsored by an incorporated professional; it must then convert to an RCA Having a single member; it must then be funded on a money purchase basis Having few members where a member is connected to the employer or is a high earner; it must be funded on a prescribed maximum funding basis, capping contributions that may be made and deducted

Answer key unconfirmed — rests on 3 unverified claims.

2 An owner-manager wants past service credited under her IPP but has little RRSP room. What is the usual route? A qualifying transfer from her RRSP to the plan reduces the PSPA, which is common where an IPP member lacks sufficient room for certification The past service is credited under a separate money purchase provision instead The employer makes an additional contribution to cover the shortfall The service is credited and the PSPA carried forward against future room

Answer key unconfirmed — rests on 3 unverified claims.

3 How is the lifetime retirement benefit accruing under an IPP for a year of service capped? At the defined benefit limit for the year only At the lesser of 2% of the member's compensation and the defined benefit limit for the year At the greater of those two amounts At the money purchase limit for the year

Answer key unconfirmed — rests on 3 unverified claims.

4 What is unusual about payments from an IPP once the member reaches the applicable age? Payments may be deferred indefinitely while the member remains an employee Nothing — payments follow ordinary registered pension plan rules with no minimum A minimum annual payment requirement applies, broadly parallel to the RRIF minimum withdrawal rules Payments must be commuted to an annuity purchased from an insurer

Answer key unconfirmed — rests on 2 unverified claims.

5 Which obligations apply to an individual pension plan? Select all that apply.

Select all that apply.

It files Form T244 annually It registers on Form T510 Plan amendments must be filed within 60 days of being made It files Form T3D annually Guide T4099 applies to it in full

Answer key unconfirmed — rests on 3 unverified claims.

6 How is the pension adjustment determined for an IPP member? On a contribution basis, since contributions are actuarially determined On the defined benefit basis, reported in box 52 of the T4 No PA arises, because the plan is a designated plan On a contribution basis, reported in box 034 of the T4A

Answer key unconfirmed — rests on 1 unverified claim.

Unanswered questions are marked wrong. There is no partial credit.