are pension plans tax sheltered?

[alanbrenton]

Hi,

I recently joined a firm that pays 2% for every 3% contribution of salary that I make. Would the total amount for this pension plan be free to compound in a tax sheltered pension plan?

I know it's pathetic, but still better than nothing.

I did not make further contributions to the company RRSP as there were no incentives beyond the 2% top up and also because I have student loans to pay down.

Thanks in advance for any insight and advice.

[advantage21]

The short answer is most likely yes. I would check with your HR dept. to be sure.

[Kai Viti]

Is corporate pension plan defined benefits or defined contribution?
If defined benefits, definitely contribute to max you can afford and make sure you hang around till it becomes vested - generally 2 yrs.

[setell]

All pension plans that contribute to a RRSP/retirement fune is tax sheltered. So I'll max it out if I were you to get the full employer contribution. What Kai Viti was trying to say is that you really should go find out what kind of pension plan it is. There are some pension plans that won't allow you to take with you your contributions you've made to date as it goes into a big employee pension pool unless you've been with them for a certain period for some time. There are some pension plans where the employer will just pay into something like a RRSP for you and you can leave anytime with it.

Hope all of this helps.

[alanbrenton]

All pension plans that contribute to a RRSP/retirement fune is tax sheltered. So I'll max it out if I were you to get the full employer contribution. What Kai Viti was trying to say is that you really should go find out what kind of pension plan it is. There are some pension plans that won't allow you to take with you your contributions you've made to date as it goes into a big employee pension pool unless you've been with them for a certain period for some time. There are some pension plans where the employer will just pay into something like a RRSP for you and you can leave anytime with it.

Hope all of this helps.

Thanks for all your replies. It is actually a defined contribution plan. I think 2% of my salary is the maximum employer contribution until I reach 7 years of service when that gets bumped up to 4% for every 5% contribution I make. I guess mine would be like the latter where it is portable after a 2 year vesting period.

[canadiantofu]

Remember too... The employer contribution is a taxable benifit.

[Montague]

Remember too... The employer contribution is a taxable benifit.

I dun think so.

(course I am no accountant).

[sauga79]

Remember too... The employer contribution is a taxable benifit.

damn x-mas bonus gets added to my taxiable income.