As the name suggests, contributions to DCRPPs are defined in the plan agreement. An employer contributes a fixed percentage or dallar value, of the employee's pay and the employee may also contribute a fixed amount outlined in the plan.

In a DCRPP, the contributions are defined, but the benefits are not. The pension derived from a DCRPP depends on the contribution amounts, investment performance, number of years of contributions, and many other factors.

Cost effective. Pension contributions are not a taxable benefit, so CPP, EI, worker's compensation and employer health tax payments do not increase.

Employee retention. Vesting provisions for most provinces may help employers retain employees, saving training and development costs.

Design flexibility. You control a great deal of your company's pension plan design, including:

• contribution level;
• investment options;
• whether employees should contribute or not;
• eligibility for participating in the plan; and
• vesting and retirement periods within legislated requirements.

Accurate cost forecasting. As contributions are defined, you can accurately forecast the company's costs for providing a pension to employees.