Retirement Compensation Arrangement (RCA)

Retirement Compensation Arrangement


Employer interested in providing supplemental retirement income to key employees or senior executives. Willing to fund future obligation today. Employer has surplus funds to invest in RCA. Employee(s) age 50 or younger. Willing to seek professional


Employer establishes an RCA. RCA overfunds a life insurance policy. Cash value is accessed to provide promised RCA benefits to employee (taxable).

Comparative Analysis

Show how life insurance can be used as a costeffective funding vehicle for an RCA.


Cash values grow tax deferred (no 50% refundable tax). Contributions to RCA are deductible. No current income inclusion to employee(s). Segregates RCA investment assets from employer. Funded obligation provides peace of mind to mployee(s). Helps retain key employees. Access to cash value through policy withdrawal or collateral loan. Split dollar structures available. May provide tax benefits if moving offshore.

  • Insurance Plan Canada Portal., 10-1200 Derry Road East Mississauga Ontario L5T 0B3
  • +1 877 495 2525
  • +1 419 833 8533
  • +1 905 670 5488