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Retirement Compensation (RCA)

Retirement Compensation Arrangement (RCA)

for Business Owners

Maximize your retirement assets

Ideal for high-income earners such as business owners, incorporated professionals, executives and athletes, a Retirement Compensation Arrangement (RCA) represents the highest level of retirement program available in Canada. Defined under section 248(1) of the Income Tax Act, an RCA allows a company to make tax-deductible contributions on behalf of key employees for purposes of retirement to the maximum level allowable.

Are you a good candidate for an RCA?

An RCA is ideally suited for high-income earners ($150,000+) such as business owners, athletes, executives, and incorporated professionals who wish to sustain their standard of living into retirement. The flexibility of the RCA allows it to be adapted to many business and tax strategies. The RCA requires a sponsoring company in order to set it up.

An RCA is often used in the following situations:

  • Intergenerational benefit and the family business
  • Expatriate executives and athletes
  • Golden handcuffs; key executives retention
  • Sale of a business

Key benefits of an RCA

  • Flexible
  • Funds are not locked in
  • Creditor-proof
  • Exempt from payroll taxes
  • Ability to reduce amount of taxes paid by lowering participant’s tax rate
  • Taxation only occurs at the time of withdrawal
  • Taxation depends on place of residency at time of withdrawal


Frequently Asked Questions

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