What is the difference between a DCPP and GRRSP?


DCPPs are retirement plans that allow employees to save for retirement. DCPPs are regulated by Canada Revenue Agency (“CRA”) under the Income Tax Act and provincially under the government of each province. For example, in Ontario, DCPPs are regulated by Financial Services Regulatory Authority (“FSRA”) under the Pension Benefits Act. One of the key differences between DCPPs and GRRSPs is the additional annual filings required for DCPPs by FSRA.
Assets in a DCPP are locked-in and cannot be accessed until the earliest age of 55 (in Ontario). Some exceptions apply for financial hardship, early life expectancy and small benefit amounts. When an employee terminates their employment, they will transfer their pension assets to a Locked-In Retirement Account (“LIRA”) and can continue investing their assets until retirement.


RRSPs assets are un-locked. This means that when an employee terminates, they can transfer their GRRSP assets to an RRSP at another financial institution or withdraw in cash, withholding taxes will apply. A GRRSP can be set up to restrict withdrawals while employed, with exception for use for the First-Time Home Buyer’s Program (“HBP”) or Life Long Learning Plan (“LLP”).
GRRSPs are only regulated by CRA and thus annual filings are not required.