The PRPP

A new type of private pension plan is available in federal workplaces this year and some workplaces in the Yukon, Nunavut, and Northwest Territories: the Pooled Retirement Pension Plan (PRPP).

Other provinces are slowly following suit in passing enabling legislation. The amount that can be contributed is determined by your RRSP contribution room, and so the two plans are “joined at the hip” when it comes to understanding the tax rules on contribution.

However, on withdrawal, the PRPPs act like an employer-sponsored pension plan. That is, if benefits are paid as a life annuity, pension income splitting is possible with spouses and the pension income amount of $2,000 is claimable.