The Income Tax Act currently recognizes and supports three types of deferred income plans (shown in Figure 9-1):
- Registered pension plans;
- Deferred profit sharing plans; and
- Registered retirement saving plans.
A registered pension plan can either be contributory (both the employee and employer make contributions) or non-contributory (only the employer makes contributions to the plan), while deferred profit sharing plans are only non-contributory. Registered retirements saving plans are plans acquired by individuals, outside of any RPP they may belong to. For the most part, employers do not participate in RRSPs; however, some employers use group RRSPs as a substitute for having their own RPP.