An RRSP is a personal tax-sheltered retirement account that you fund yourself. An RPP (Registered Pension Plan) is a workplace plan funded by both you and your employer. If your employer offers any matching contributions, the RPP is mathematically better — that's instant 50-100% return on your own contribution. The trade: RPP money is locked until retirement (or "locked-in" if you switch jobs and roll it into a LIRA), while RRSP money you can withdraw any time (with tax).
| RRSP | RPP | |
|---|---|---|
| Who funds it | You only | You + employer match |
| Contribution limit | 18% of income · $32,490 cap (2025) | Plan-dependent · often 5-10% salary |
| Investment choice | Full · you pick | Limited menu · sponsor-curated |
| Tax deduction | Yes · in year contributed | Yes · payroll-deducted (auto) |
| Locks in (LIRA-like) until retirement | No | Yes — DB and DC plans both |
| Government guarantee | None — you bear all risk | DB: employer guarantees benefit · DC: like RRSP |
| Portability at job change | 100% yours · keep account | Transfer to LIRA · pension is locked |
| Vesting period (employer match) | N/A | 0-5 years typical |
Typical Canadian employer match: 100% on the first 3-5% of salary. On a $90K salary contributing 5% ($4,500), the employer adds $4,500 — total $9,000 going into your retirement account before any market returns.
Over a 30-year career: 30 × $4,500 employer contributions = $135,000 in free money. At 7% compound growth: ~$425,000 in employer-funded retirement assets.
Never leave employer match on the table. If you can't afford 5% of salary into the RPP, fix expenses first — don't skip the match.
Employer guarantees a specific monthly payment in retirement, calculated as a % of your salary × years of service. Common in government and large unions. Employer bears all investment risk. Used to be the standard; now rare in the private sector.
Employer matches your contribution, but no guaranteed payout. You pick investments from a sponsor-curated menu. You bear investment risk. The most common type of modern RPP — replacing DB in 90% of private-sector hires since 2010.