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Canada’s hidden pension plan: The Saskatchewan Pension Plan

Canada’s hidden pension plan: The Saskatchewan Pension Plan

If you’re one of the two-thirds of Canadian workers without the luxury of a company pension plan, the Saskatchewan Pension Plan (SPP) can bridge the gap and help you save towards retirement. With talks of Canada Pension Plan (CPP) expansion off the table for the foreseeable future, the onus is on workers to make up any income shortfall during their retirement years.

For most retirees, government benefits such as CPP, OAS and GIS simply won’t be enough to sustain their lifestyle in retirement.

Related article: How much will the government pay you in retirement?

Although there are voluntary savings vehicles like RRSPs and TFSAs, only a minority of Canadians contribute. RRSPs have been around for decades, yet less than a quarter (24 per cent) of Canadians contributed in 2011, according to Statistics Canada.

When it comes to retirement, there’s an alphabet soup of accounts – Pooled Registered Pension Plans (PRPPs), Target Benefit Plans (TBPs), and the proposed Ontario Retirement Pension Plan (ORPP) to name a few. With so many choices it can be overwhelming to say the least. An account worth considering is one few Canadians know about: the Saskatchewan Pension Plan (SPP).

What is the Saskatchewan Pension Plan?

The Saskatchewan Pension Plan (SPP) is a voluntary money purchase defined contribution pension plan. Don’t let the name fool you; anyone in Canada (not just residents of Saskatchewan) can join the plan. If you’re between the ages of 18 and 71 and have available RRSP room, you’re eligible to join.

How much can I contribute to the Saskatchewan Pension Plan?

Those eligible to join can contribute up to $2,500 annually. You’ll receive the same tax refund as you would from contributing to your RRSP. SPP contributions count towards your RRSP contribution limits for the year. You can also transfer up to $10,000 annually in cash from existing RRSPs, RRIFs and unlocked RPPs to your SPP.

Contributing to your SPP is easy – you can contribute through online banking, automatic debit from your bank account or credit card (earning reward points or cash-back), or by sending a cheque.

How has the plan performed?

SPP is the 27th largest defined contribution plan in Canada as measured by Benefits Canada in September 2013. Similar to mutual funds, SPP members benefit from professional investment management, but at a lower cost. The economies of scale that the $298-million SPP fund offers ensure low costs for members. The plan has averaged a return of 8.13% since inception, with a five year average of 8.91% and the ten year average of 5.74%.

What are the advantages of the SPP?

Investment fees matter – investors need to pay attention to their investment fees. Fees directly impact your investment return. The higher the investment fees, the more difficult it will be for your fund to outperform the market.

Related article: Investors need to pay attention to the investment fees

The SPP was created to offer investors the very best return possible at low investment fees. The SPP is free to join – there are no extra fees to change start, increase or decrease your account. The only fee is the Management Expense Ratio (MER) of 1% – that’s well below the average MER in Canada of all funds of 2.53% and a bargain for professional investment management.

When can I withdraw my money?

The SPP is a locked-in pension plan. It’s similar to transferring your Defined Benefit pension from your former employer to a Locked-in Retirement Account (LIRA). Although the SPP lacks the financial flexibility of an RRSP to withdraw your funds in a financial emergency, you won’t be tempted to raid your account before retirement. At age 55, you have the option of transferring your account to a Locked-in Retirement Account (LIRA) or a RRIF with another financial institution.

Related article: The Differences between LIRAs and RRSPs

Despite its low annual contribution limit of $2,500, the SPP is worth considering as a supplement to your RRSP. For more information on the SPP, including Frequently Asked Questions and to Join, please visit Saskatchewan Pension Plan.


  1. Valerie

    With only three years to go before I’m 71, is there any point making the $2,500 per year?



  2. Sean Cooper

    Thanks for the question, Valerie. It’s hard to answer your question without knowing your financial situation. I would suggest speaking with a financial advisor, as everyone’s tax situation is different. For example, if you’re in a low marginal tax bracket, contributing to the SPP could cause you to lose government benefits like GIS.

  3. MoneySheep

    1% fee is targeted average fee for “management fees”, you know it is more than 1% in reality.

    from “…there are no fees charged other than our management fee that pays all professional and operating expenses of the plan – that fee is targeted to average one per cent. ”

    plus, there are administration costs and trading costs. Non of these are documented. The annual report did say “…The rates of return used
    exclude administration fees…”

    plus, they hire consultants, etc.

    That is the damn problem with these organization, they don’t list all truth.

    • Stephen Neiszner

      SPP’s MER is targeted to be 1% per year or less and in 2014 the actual MER was 0.95%. The MER is the total of the fund’s management fees and operating expenses.

      Stephen Neiszner
      Network Technician
      Saskatchewan Pension Plan

  4. Karen

    I hear this is a great thing from other co-workers in Ontario. I am almost 49 years old and now have employment with a pension. Not a lot of years though until I am 62 (My retirement age) So, a measly pension right now . Is this worth it for me? I feel I would like to do it.

  5. Bonnie Meier

    Time is always a benefit when it comes to retirement savings. Contributing to SPP for 13 years will allow you to tax shelter your savings and realize the benefit of compound interest during those years. Our website has a wealth calculator that allows you to project the value of your account after 13 years. We’d also be pleased to speak with you by phone to answer specific questions you may have (1-800-667-7153 – during office hours).

    Bonnie, Manager of Client Service

  6. ToddC

    While the SPP might not be perfect as complete retirement plan, it’s simplicity is ideal for many people For me, I’ve worked hard since I was in grade 12, rarely even took holidays, never was unemployed, but also never earned a lot of money and I never had a ‘real’ pension plan. So, now I’m 52 and learning late what the CPP will do for me after a lifetime of contributions, and I’m scared. On the upside, I do have some RRSP’s and the mortgage will be paid shortly, but I’m still scared about retirement. So, while the SPP isn’t perfect, it did allow me to very simply join, and to start contributing right away to a Pension Plan. As well, I can help ensure that my younger employees and my own (non-public-sector) children start their own Pension Plans simply.

    • Todd

      I wish I could contribute more than $2,500 / year though. I understand those limits are designed in protections, but a $6,000 year limit might be more in line with my needs.

      • Ned

        One option is to contribute cash to a savings account RRSP with free transfers, then transfer the money to Sask Pension. They allow up to $10k in transfers a year.

  7. Jim Rands

    I am the President of a fairly large Condominium in Edmonton and we were happy to offer this plan to our staff. Several have enrolled. Thanks.

  8. Jade

    What is an example of a savings account rrsp with free transfers?

  9. Bonnie

    Some financial institutions will permit free RRSP transfers. It’s best to shop around and ask the question.

  10. Katie

    Hello there

    Im Canadian but I live in England. And I will be living in England for a while. But I’d still like a pension plan in Canada. If I were to put my money in the SPP would I have to pay tax on the money I transfer from England to Canada?

  11. Bonnie

    Hi Katie, In order to contribute to SPP you must have available RRSP room in Canada. Contributions to the Plan are deducted by the contributor when filing Canadian income tax and then reported as income when the funds are received at retirement.

  12. Joanna F

    How old is this article? Because the contribution to SPP has been raised to max $6,000 for a cop’e of years now.

  13. S Hooper

    I checked out their website and it seems it’s only for Saskatchewan residents now?

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