A DPSP is fundamentally a written agreement registered with Revenue Canada in which the employer pays each year a portion of its profits in trust to the employees' account, or to the account of some of these employees, and where investment earnings are accumulated on a tax free basis. Employee contributions are not tax deductible and significant shareholders are not allowed to participate. DPSPs are often set up to operate in conjunction with Group RRSPs or Registered Pension Plans.
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