Funding tests, contribution holidays, and top-ups

In this episode of The Money Scope Podcast, Benjamin Felix and Dr. Mark Soth (The Loonie Doctor) take a deep dive into the complex world of pensions for incorporated professionals. They unpack the pros and cons of the various pension structures available in Canada—from RRSPs and IPPs to MEPPs—and explain how these compare in terms of tax treatment, investment flexibility, creditor protection, and long-term retirement security.

Through their discussion, Ben and Mark illuminate how pensions really work for business owners who are both employer and employee, why "pension envy" can cloud rational decisions, and how evidence and math—not marketing—should guide your retirement planning.

They also explore the behavioral and psychological side of pensions: why risk pooling matters, how defined benefit plans manage longevity and sequence risk, and when the added complexity of an IPP or MEPP might actually be worth it.

This is one of the most comprehensive overviews of pensions you'll hear—combining research, real-world application, and practical insight for anyone trying to optimize their corporate retirement strategy.

Key Points From This Episode:

• Why pensions matter for Canadian business owners—and why this episode took a while to make. (0:01:20)

• Canada's three-pillar retirement system: public pensions, employer-sponsored pensions, and personal savings. (0:02:16)

• The pension landscape: RRSPs, individual pension plans (IPPs), and multi-employer pension plans (MEPPs). (0:03:19)

• Defined contribution (DC) vs. defined benefit (DB) pensions—who bears the investment risk. (0:06:24)

• How MEPPs like Medicus and HOOPP allow incorporated professionals to join group plans. (0:08:54)

• The truth behind branded pension products—why the legislative structure is what really matters. (0:10:20)

• Pension envy and the economics of compensation: who actually pays for "employer contributions." (0:12:27)

• Comparing RRSPs and pensions: tax deferral, limits, and liquidity differences. (0:14:55)

• RRSP flexibility vs. pension restrictions in withdrawals and contributions. (0:17:54)

• Defined benefit vs. defined contribution pensions—how risk and control shift between employer and employee. (0:22:57)

• Why small business owners often prefer IPPs after age 40. (0:25:20)

• What happens to pensions in retirement: RRSPs → RRIFs, pensions → LIRAs/LIFs. (0:29:06)

• Group pensions vs. individual pensions: pooling risks and costs. (0:31:34)

• Do big pensions really have investment advantages? A data-driven look at costs and active management. (0:33:18)

• Why institutional investors often underperform passive portfolios—even with elite managers. (0:39:24)

• CPP Investments as a case study: $700B in assets, billions in fees, and lagging benchmarks. (0:42:24)

• Evaluating pensions on liabilities, not just returns—what "immunizing liabilities" means. (0:45:45)

• Sequence-of-returns and longevity risk: why pooling helps retirees sleep better. (0:48:46)

• Behavioral finance and the comfort of cash buffers in retirement planning. (0:53:48)

• The trade-offs of pooling mortality risk—winners, losers, and stability. (0:57:56)

• Individual Pension Plans (IPPs): what they are, how they're structured, and when they make sense. (1:02:10)

• Contribution limits and past-service buybacks—why IPPs become powerful after age 40. (1:05:40)

• How spouses can be included in an IPP—and the nuances of spousal RRSPs. (1:09:39)

• The importance of actuarial valuations and how contribution "holidays" or "top-ups" work. (1:11:27)

• IPPs in practice: shifting corporate pre-tax dollars into a tax-sheltered pension efficiently. (1:14:38)

Links From Today's Episode:

Medicus Pension Plan — https://www.medicuspensionplan.com/

HOOPP (Healthcare of Ontario Pension Plan) — https://hoopp.com/

Canada Pension Plan Investments — https://www.cppinvestments.com/

PWL Capital — https://pwlcapital.com/

Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/

Dr. Mark on X — https://x.com/LoonieDoctor

Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/

Benjamin on X — https://x.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Money Scope on YouTube — https://www.youtube.com/@MoneyScopePodcast