Don’t miss out! Did you know that you could get money to boost your retirement savings — just for working as a physician in B.C.?
If you’re a British Columbia doctor, you may be eligible for a contribution to your retirement savings through the Contributory Professional Retirement Savings Plan (CPRSP) — which can add an extra boost to your savings for retirement.
Here are answers to frequently asked questions about the CPRSP, including how to get more information.
Who is eligible?
If you’re paid under the fee-for-service model — as are most physicians in B.C. — you qualify for the CPRSP, which is a benefit negotiated between Doctors of BC, the Medical Service Commission and the Government of British Columbia.
You may also qualify if you are paid sessional or service contract income by one of the six health authorities in the province.
The CPRSP helps B.C.’s physicians save for retirement by providing additional contributions for your individual or spousal RRSP or your corporate individual pension plan (IPP).
How is the benefit calculated?
The benefit has two components: a basic benefit available to all eligible physicians based on eligible income; and a length of service (LOS) benefit based on how long you’ve been practising in B.C. — the minimum being nine months of work earning eligible income while covered by the Canadian Medical Protective Association.
The basic benefit must be “matched” with your own contribution, unless you are in your first to fifth year of practice (see below).
For 2019, the maximum basic benefit is $4,100 and the maximum LOS benefit is $3,480 for a combined maximum of $7,580. To get the maximum, you would need a net eligible income of at least $120,000 in the prior calendar year and 20 LOS years in B.C.
What if I’m a new-in-practice physician, in the first five years of my career?
In recognition of the financial challenges of starting your career in medicine, eligible physicians who are in their first to fifth year of practice don’t have to make a matching CPRSP contribution to receive the benefit.
All you need to do is apply for the benefit, and you will receive your entitlement amount. This change was introduced only in 2018, so be sure to apply. If you started practising anywhere in the world from 2014 onwards, you would be eligible. It’s retroactive so you can claim the CPRSP basic benefit from 2017, 2018 and 2019 if you haven’t done so already.
Am I eligible to receive the benefit?
To receive the basic benefit under the CPRSP, you must make a matching contribution to your RRSP, to a spousal RRSP for which you are the contributor or to your corporate IPP. If you’re an eligible new physician in your first to fifth year of practice, no contribution is required to receive the benefit, unless you choose the direct payment option. Please refer to your personalized application form.
If you don’t claim it, your basic benefit will expire in three years. For example, the basic benefit for 2019 expires on March 31, 2022.
The length of service benefit is an additional amount that’s payable based on your eligible income earned in the previous year, as well as the total amount of time you’ve practised in B.C., payable as long as you’ve claimed your full basic entitlement.
What’s the deadline to apply for the benefit?
In addition to making an eligible contribution, you must complete and submit an application form by the deadline, which is January 20, 2020. This means you’ll also need to make your matching contribution, whether it’s to your personal RRSP, spousal RRSP or corporate IPP, by this date. If you were born in 1948, 2019 is the last year you are eligible for RRSP contributions, so the deadline for you is December 2, 2019. This will give Doctors of BC enough time to capture all RIF requirements prior to year-end.
Your personalized application form will be available on the Doctors of BC website, including any entitlement packages for benefits not yet claimed for 2017 and 2018.
Is this benefit taxable?
The CPRSP is a taxable benefit, but the tax that would otherwise be payable will be offset when you contribute an equivalent amount of the benefit to your RRSP, spousal RRSP or corporate IPP.
A T4A tax slip will be issued in February of the calendar year following the year in which the benefit was paid. (A T4A is not issued when the matching contribution is made to your corporate IPP.)
Where can I learn more?
More information, and your personalized entitlement letter/application form, is available on the Doctors of BC website, by emailing firstname.lastname@example.org or by calling Doctors of BC at 604 638-2926.
MD Financial Management’s close relationship with Doctors of BC means we can also provide information and assistance in understanding and applying for the CPRSP benefit. More importantly, we can help you optimize your RRSP so you can rest easier as you watch your retirement assets grow.
* MD Advisor refers to an MD Management Limited Financial Consultant or Investment Advisor (in Quebec), or an MD Private Investment Counsel Portfolio Manager.