Why does Westcoast Actuaries Inc. recommend IPPs with only one member?
Westcoast Actuaries Inc. makes this recommendation for four reasons: a) an IPP with spouses as plan members could prove difficult to split if a marriage breakdown should occur; b) IPPs with more than one plan member may have very contentious surplus entitlement issues i.e., how surplus is to be split between the two or more plan members; c) Consider two 1-member IPPs, one whose plan is in surplus and one whose plan is in deficit. Now assume that those 2 members are in the same IPP. If the surplus is large enough, the Company would not be able to contribute because the deduction for a DB Plan is on a total plan basis, not on an individual member basis. d) Terminal funding can not occur in an IPP with more than 1 member unless all members are retired and CRA has waived designated plan status.
