A Retirement Compensation Agreement (RCA), is a vehicle used to pre-fund supplementary retirement benefits outside a Registered Pension Plan. Sponsor contributions and investment earnings are subject to a 50% refundable tax.

Sponsor advantages

* employer contributions are tax deductible and not subject to payroll tax
* an RCA can play an important role in attracting and retaining high caliber employees

Member advantages

* members receive a formal promise of a retirement benefit
* members are only taxed when they receive retirement income from the plan
* creditor-proof - since plan assets are separate from company assets, they are protected from the Plan Sponsor's creditors