Deferred Profit Sharing Plan

Deferred profit Sharing Plans (DPSP) operate as long-term savings vehicles for employees who benefit from the profitability of the company. They are regulated under the Income Tax Act and must be registered with Revenue Quebec. The Key legislated rules for DPSP are summarized below:

• Employee contributions are not permitted.
• Minimum contribution from the employer: at least 1% of the remuneration of participating employees in every year, regardless of profitability.
• Employer contributions and reallocations of forfeited amounts must not exceed 18% of the employee's compensation (Or ½ MMPP limits) less any amounts paid on behalf of the employee to registered pension plan in the calendar year: or, if less, the specified dollar amount for that year
  
  

  1996-2002	$ 6,750
  2003	$ 7,250
  2004	$ 7,750
  2005	Indexed to growth in the Average Industrial Wage

• Employees must vest after 2 years of plan membership; however, the employer can restrict/prohibit withdrawals while employed with the company.
• No contributions are permitted to designated persons who have ownership interests in the employer or who are related to such persons.
• Contributions to members' accounts arc subject to Revenue Canada's foreign content limits.
• Payments at death , retirement or termination may be taken as a lump sum cash value. On retirement or termination , the funds may also be used to purchase a life annuity, transferred to an employees regular RRSP with an eventual transfer to a RRIF or transferred to the text employer's registered pension plan (if permitted by the plans transfer provision).