Trevor Parry, a previous guest from episode 5, joins us today. Pension Acuity Partners, is his new pension company, they are a growing company. He has lawyers on staff, and accountants they are associated with.
The discussion starts with Trevor’s three things the entrepreneur or business owner should set up as a strategy or goal.
Everything is in context to tax policy. Right now federally and provincially there is an integration funnel – they want you to take T4. This leads to discussions on IPPs.
What is an IPP? Individual Pension Plan – defined benefit plan for a small group/family. An example is, a teachers’ pension plan for a business owner. It works well in certain situations. The example of a doctor is used. The control the company has of their own plan and the structure, away from your own business, are what makes this a desirable option for retirement planning. There is also a result factor. Trevor touches on taking salary and dividends and the impact that can have. The IPP is a great introductory strategy. The key is having the correct actuarial and consulting partner, and an advisor, who will come in and show you how to do this.
A client has to have a structure in place to allow them to make decisions. The discussion continues to talk about succession planning and the sale of the company. Whether to keep the plan in place or to switch it to a LIRA or an annuity is another strategy, taxation is a factor.
The second suggestion is a corporate freeze. Freeze the company, create a pure holding company, and create a family trust and the family trust will have a beneficiary corporation, creating safeguards against a tax surprise. This magnifies the capital gains exemption and moves passive assets into something that is creditor protected, and not in the stream of sale.
The average entrepreneur, watching the news, may feel they have a bullseye on them. There are safe strategies in terms of tax planning and immediate tax savings that can be implemented.
From there, it can be reviewed if permanent life insurance is needed.
Trusts are the be all and end all. Plans created years ago, must be revisited to ensure they are up to current rules. The trust is to distribute strategically.
Part 2, with Trevor, will cover strategies 3 and 4, and will be in a couple of weeks.
Links mentioned in the show:
TRP Strategy Group trevorparry.com