Sandra presently participates in her employer-sponsored defined contribution pension plan (DCPP). As contributions continue to be made into her plan, what can she expect?
A.
Retirement benefits will be based on a prescribed formula that can be referenced from the plan's terms and conditions.
B.
The employer will solely make contributions to her DCPP based on a prescribed formula noted within her plan.
C.
Her available registered retirement savings plan (RRSP) contribution room will be reduced by what is being contributed to her plan.
D.
To ensure she has savings at retirement, the employer will choose stable investments to grow her retirement savings.
A defined contribution pension plan (DCPP) is a type of retirement savings plan where the employer and/or employee make contributions to an individual account for the employee. The retirement benefits depend on the amount of contributions and the investment returns. Contributions to a DCPP reduce the employee’s available registered retirement savings plan (RRSP) contribution room, which is the maximum amount that can be contributed to an RRSP each year without tax penalties.
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