Contributory Professional Retirement Savings Plan (CPRSP)

The British Columbia Medical Association (BCMA) administers five major benefit programs that are available to practicing BC physicians and surgeons.  This post is the second in a series of five describing the various benefit programs. Last week I discussed the Continuing Medical Education (CME) benefit.

The Contributory Professional Retirement Savings Plan (CPRSP) helps fund retirement for physicians. Payments are made directly to the doctor’s personal RRSP, spousal RRSP, or to the physician’s professional corporation if there is an Individual Pension Plan (IPP) in place. I’ll discuss the benefits of an IPP in a future post.

The benefit amount is based on eligible income received in the previous calendar year.  Eligible income is fee-for-service income paid by the Medical Services Plan (MSP), sessional income and non-salaried earnings under a service contract with a government agency. It is my understanding that billings to ICBC and WorksafeBC are not eligible.

There are two components to the CPRSP; the basic benefit and the length of service benefit.

Basic Benefit

The basic benefit is a matched benefit. RRSP or IPP contributions up to the entitlement amount made by the physician are matched dollar for dollar.

The annual benefit entitlement is a function of eligible income earned in the previous calendar year and practice type. A physician must earn $120,000 of eligible income net of overhead at the appropriate factor to receive the full basic benefit of $4,324.80. There are over 50 different practice types and overhead factors.

Each year the BCMA sends out a CPRSP package including the amount of the benefit entitlement, application forms, and instructions on how to claim.

Length of Service (LOS) Benefit

As the name suggests, this is a benefit based upon the length of service.  To obtain the maximum LOS benefit of $3,430, a physician must have earned more than $50,000 in eligible income in the previous calendar year and must have worked for at least 20 years. The benefit is prorated for lower amounts of income and length of service. A physician must work for at least 9 months in BC in a year to receive credit for a year of service.

The LOS benefit is not a matched benefit. Once a physician’s full basic benefit is matched and claimed in full, the LOS benefit is automatically paid to the physician’s personal or spousal RRSP, or professional corporation for an IPP.

The payment of the CPRSP benefit can be delayed up to 3 years. However, if the benefit is not claimed within three years, it is lost forever.

Withdrawals of CPRSP payments, personal matching contributions, and accumulated investment earnings cannot be made until a physician is no longer practicing in BC. Early withdrawals will result in ineligibility for future CPRSP benefits.

Payments of the CPRSP benefit to a physician’s personal or spousal RRSP are considered personal taxable income and are reported on a T4A slip. The income inclusion will be offset by a deduction for the RRSP contribution. Payments made to a physician’s professional corporation for contribution to an IPP are income to the company and a T4A will not be issued.

Non-members of the BCMA are entitled to receive the benefit, but must pay an administration fee of the lesser of 50% of the benefit or the balance of the equivalent BCMA dues, plus HST.

UPDATE – more information on the CPRSP is available:

Future posts will address the remaining benefit programs:

John Moore, accountant for doctors, dentists, lawyers and other business professionals, Vancouver, British Columbia

About John Moore

I am a Chartered Professional Accountant (CPA,CA) based in Vancouver, BC who helps doctors, dentists, lawyers and other business professionals keep more of what they earn. I provide tax, accounting and financial planning services for professionals and business owners.
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