EP339 The ABCs of IPPs and RCAs

In this episode of The Cash Rich Exit Podcast, host Colleen O’Connell-Campbell sits down with Muneer Feeroze and Clark Steffy of Canadian Benefits Associates to unpack two powerful retirement tools for incorporated entrepreneurs: individual pension plans (IPPs) and retirement compensation arrangements (RCAs). Together, they walk through where these plans can outperform an RRSP, what “tax smart” really means in practice, and the operational realities founders need to understand before setting anything up.

 

In this conversation, they cover:

 

Who an IPP is for, and when it starts to beat an RRSP

Muneer explains that IPP contribution room increases with age, and outlines a crossover point where the IPP can become more compelling than the standard RRSP approach.

 

The income detail founders often miss

If you want to build contribution room, the plan is tied to T4 income rather than dividend income. This becomes part of the “prep phase” for incorporated owners who have flexibility in how they pay themselves.

 

The alphabet soup explained: why RCAs show up in the same conversation

They position an RCA as a way to fund retirement benefits beyond the IPP’s cap, and discuss how these tools can work as a broader strategy for lowering tax burdens and boosting retirement outcomes.

 

Flexibility versus access: what you can (and cannot) do with IPP assets

They discuss the reality that IPPs can be funded with flexibility, but accessing the assets is more rigid unless you wind the plan up, which takes time and has costs.

 

Creditor protection as a strategic feature

They explain how an IPP is funded into a beneficiary trust structure, and why that can provide meaningful creditor protection relative to keeping assets inside the corporation.

 

What it costs to run an IPP

Unlike an RRSP, IPPs require actuarial and regulatory filings, including valuation reports filed periodically. Muneer shares a concrete annual fee example for 2025 and what it covers.

 

What happens to the IPP if you sell your business

They explain that an IPP needs a sponsoring corporation, and outline common paths business owners can take (including sponsorship through a Holdco, or winding up the plan). They also flag that wind-ups can trigger maximum transfer rules, which may force a portion to be paid out as taxable cash in the year of wind-up.

 

Family and succession planning use cases

They discuss how an IPP can be used in a family succession context, including why some people refer to it as a “family pension plan” and how intergenerational wealth transfer can become part of the strategy when a business remains the sponsor over time.

 

Key takeaways for incorporated founders

• An IPP can be a tax smart retirement engine for the right incorporated owner, but it comes with rules, admin, and costs that need to be understood up front.

• You can fund with more flexibility as you age, but access is not as instant as an RRSP unless you plan for wind-up timing and implications.

• The structure can support creditor protection and estate or succession planning in ways many founders do not consider early enough.
  
  

Book a one on one Wealth Gap Analysis with Colleen O’Connell-Campbell to pressure test whether your personal plan is aligned with your exit and retirement strategy.

 

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The Cash Rich Exit Podcast is brought to you by O’Connell-Campbell Wealth Management at RBC Dominion Securities.

 

All opinions expressed by the host, Colleen O’Connell-Campbell, and podcast guests are solely their own opinions and do not reflect the opinion of RBC Dominion Securities.

 

This podcast is for informational purposes only before taking any action based on information in this podcast you should consult with a qualified professional.

 

Colleen O’Connell-Campbell is a Wealth Advisor at RBC Dominion Securities, a member of the Canadian Investor Protection Fund.