Individual Pension Plan

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Q. I am turning 72 this year and must, under the ITA, begin to receive benefit payments from my individual pension plan (IPP). The ITA rules require the IPP to pay me the greater of: 1. the regular pension amount payable under the terms of the IPP; or, 2. the minimum amount that would be required to be paid from the IPP as if the IPP assets were held in a Registered Retirement Income Fund (RRIF). Is the latter option possible under the PBA?


A. No. The benefit payments from the IPP cannot be paid out as if the IPP assets were held in a RRIF. The IPP is a registered defined benefit pension plan under the PBA, and the IPP must comply with the provisions of the PBA. The PBA does not allow for RRIF type payments from a pension plan. However, where the RRIF provisions prevail, there may be circumstances when surplus assets, if any, under the IPP may be used to bring the pension being paid to the retired member up to the required RRIF level. For example, this could be done where the plan terms permit payment of surplus from the ongoing plan to the retired member(s) of the plan. -06/12

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