How does my Restricted RRSP or DPSP work?

The benefits of a Restricted RRSP or DPSP

Your retirement plan is designed to help you improve your retirement security. The Restricted RRSP or DPSP plays an important part in helping you achieve that goal. It mirrors one of the best aspects of a typical pension plan, by limiting withdrawals while you are employed.

Restricting withdrawals from your RRSP or DPSP protects you from:

• Incurring a withholding tax of a withdrawal
• Permanent loss of RRSP contribution room 
• Negative impact on your retirement goals 
• Incurring taxable income 
• Not having sufficient savings when you retire

How it works

To support you in achieving your retirement goals, your employer designed your plan so that contributions to your Registered Retirement Savings Plan (RRSP) account or Deferred Profit Sharing Plan (DPSP) cannot be withdrawn while you are employed. 

These restrictions apply to contributions made by you and your employer.

Withdrawal restrictions do not apply when:

• You leave your employer
• You make personal contributions from a bank account to your RRSP account
• You make contributions to your Tax-Free Savings Account (TFSA)
• You transfer in DPSP contributions 

You may be eligible to participate in the First Time Home Buyer’s Plan or the Lifelong Learning Plan to finance full time training and education. We encourage you to review your eligibility requirements on the Canada Revenue Agency website and receive permission from your employer to make a withdrawal for these purposes.

Your employer may also allow a withdrawal based on financial hardship. Your employer will need to authorize such a withdrawal before your funds can be released.