Deferred Profit Sharing Plans, Supplementary Unemployment Benefit Plans (DPSPs/SUBPs)

A deferred profit sharing plan (DPSP) is an arrangement under which an employer may share profits from their business with all or a designated group of employees to provide pensions. Deductions under the Income Tax Act are provided in respect of employer contributions (employee contributions are not permitted) and tax is deferred on income in the DPSP until such time as benefits are received.

A registered supplementary unemployment benefit plan (SUBP) is a plan established by an employer to top up employees' employment insurance benefits during a period of unemployment because of training, sickness, accident or disability, maternity or parental leave, or a temporary stoppage of work. Employer contributions must be made to a trust and are tax deductible under the Income Tax Act (employee contributions are not permitted) and earnings of the trust are tax-exempt.