What Is a Deferred Profit Sharing Plan?
Also known as a DPSP, a deferred profit sharing plan is a type of retirement plan in which the contributions of the employer to the plan vary based on the profitability of the business. In most plan structures, the contributions and any interest earned are not subject to taxes until the funds are withdrawn. This type of plan is common in Canada, with the Canadian Revenue Agency providing specific regulations on the annual limits that an employer can contribute, how tax deductions on those contributions can be claimed and when the employee may begin to withdraw funds from the deferred profit sharing plan.
