2. What are the incentives given to tax-qualified plans?



The following tax incentives are given to tax-qualified retirement plans

  • Retirement benefits are not subject to tax provided the retiree is at least 50 years old with at least 10 years of service and has not availed of this tax benefit under a previous employer.
  • Contributions to the retirement fund are deductible expense for corporate income tax purposes. Contribution for the cost pertaining to the current year of service is 100% deductible. Contribution in excess of the current service cost is deductible 10% annually for 10 years.
  • Investment income of the fund is not subject to tax.