The year-end is fast-approaching! We’re reminding plan sponsors to ensure contributions are submitted for the 2020 calendar year by December 31, 2020, to take full advantage of all tax deferral opportunities.


The deadline to submit Registered Retirement Savings Plan (RRSP) contributions for the March to December 2020 receipt period is December 31, 2020. Contributions submitted through the Plan Sponsor Services Website by an electronic file upload must be received by 2 p.m. ET.

2020 over-contribution deadline

Plan sponsors must report any employer/employee over-contribution/administration errors made in 2020 to Deferred Profit Sharing Plans (DPSPs) or Defined Contribution Pension Plans (DCPPs) to Sun Life before December 31, 2020, to avoid tax implications.

Please note that the Canada Revenue Agency (CRA) shows no leniency to plan sponsors who aren’t aware of the contribution limits or haven’t monitored the contribution limits as they should.

Registered plan contribution dollar limits and next year’s maximum pensionable earnings

Effective January 1, 2021, the registered plan dollar limits will increase as follows:

  • Defined Contribution Pension Plan (DCPP) – $29,210
  • Deferred Profit Sharing Plan (DPSP) – $14,605
  • Registered Retirement Savings Plan (RRSP) – $27,830

In addition, the maximum pension limit for a Defined Benefit Pension Plan (DBPP) will be increased to $3,245.56 per year of service.

What does this mean to plan sponsors?

If plan rules state that contributions over and above the DCPP, RRSP or DPSP contribution limits spill over into another product (usually a non-registered vehicle), the spills will now occur at a higher dollar limit, effective January 1, 2021.

2021 YMPE and MPE limits

The yearly maximum pensionable earnings (YMPE) under the Canada Pension Plan (CPP) or maximum pensionable earnings (MPE) under the Quebec Pension Plan (QPP) for 2021 will be $61,600. That’s up from $58,700 in 2020. Contributors who earn more than $61,600 in 2021 aren’t required or permitted to make additional contributions to the CPP/QPP. The basic exemption amount for 2021 remains $3,500. Employees who earn less than that amount don’t need to contribute to the CPP/QPP.

Under the CPP,

  • The employee and employer contribution rates for 2021 will be 5.45%.
  • The self-employed contribution rate will be 10.9%.
  • The maximum employer and employee contribution for 2021 will be $3,166.45, compared to $2,898.00 in 2020.
  • The maximum self-employed contribution will be $6,332.90, compared to $5,796.00 in 2020.

Under the QPP, the contribution rate for 2021 will be 11.8%, which corresponds to a contribution rate of 5.9% for the employee and 5.9% for the employer. The maximum annual contribution to be withheld for any employee will be $3,427.90.   

TFSA contribution limits for 2021

The annual TFSA contribution limit for 2021 is estimated to be $6,000. This is subject to change.

Questions? Contact your Sun Life Group Retirement Services representative.