- Canadian Tax Resource Blog - http://blog.taxresource.ca -

Defined Contribution Pension Plan

A defined contribution plan (also know as money purchase plans or MPP’s) are registered pension plans where the employee knows what the contribution to the plan will be but the future value is not known. Funds in these plans may be invested in a variety of instruments and many employees may have some control over these investments.
Under defined contribution plans, the employee contributions are deductible similar to RRSP contributions and the employers contributions reduce the RRSP deduction limit.