RCA Corporation, founded as the Radio Corporation of America, was an electronics company in existence from 1919 to 1986. Currently, the RCA trademark is owned by the French conglomerate Technicolor SA through RCA Trademark Management S.A., a company owned by Technicolor. The trademark is used by Sony Music Entertainment and Technicolor, which licenses the name to other companies like Audiovox and TCL Corporation for products descended from that common ancestor.
the United Kingdom and France declared war on the German Empire and Austria-Hungary, following the German and Austrian invasions of their neighbors, including Serbia and the Russian Empire, which started World War I. Radio traffic across the Atlantic Ocean increased dramatically after the western Allies cut the German transatlantic submarine communication cables (telegraph-only at that time, well-before the first transatlantic telephone cable connected the United States with France in 1956.) Germany, Austria-Hungary, and their allies in Europe (the Central Powers) maintained contact with neutral countries in the Americas, such as the United States, Mexico, Brazil, Argentina, Chile, and Peru via long-distance radio communications, as well as via telegraph cables owned by neutral countries such as the Netherlands and Denmark.
In 1917, the U.S. Federal Government took charge of the patents owned by the major companies involved in radio manufacture in the United States in order to devote radio technology to the war effort. All production of radio equipment was allocated to the U.S. Army, U.S. Navy, U.S. Marine Corps, and the U.S. Coast Guard. The U.S. Department of War and the U.S. Department of the Navy sought to maintain a Federal monopoly of all uses of radio technology. However, the wartime takeover of all radio systems ended with the tabling of a bill to continue this by the U.S. Congress sometime in the latter part of 1918.
A Retirement Compensation Arrangement (RCA) allows a Company to make tax deductible contributions on behalf of owners and key employees for the purposes of supplemental retirement income. A RCA is ideally suited for high income earners who wish to sustain their standard of living into retirement. It is ideal for business owners, executives and professionals with professional corporations.
The RCA provides an avenue for retaining key employees ... in this case executives. The Company can build in vesting provisions. If the executive leaves the Company before vesting occurs, his or her benefits would either be allocated to the remaining members of the plan or paid back to the Company.
In the case of a family owned business, the RCA provides another means for wealth transfer to the children. In this case, the parent owners set up an RCA and add the children in as members once they begin to work for the business. When the parents retire they access the RCA to provide for themselves. Upon the death of both parents the remaining assets will pass to the children completely tax free.
An RCA can also facilitate an extended buyout of the family business by the children by arranging for the RCA to be funded post-retirement from the pre-tax operating income of the Company. This is a far better arrangement than children borrowing funds from a bank on an after-tax basis to fund the buyout.
Transitions Wealth Strategies provides guidance as to when a RCA is appropriate and coordinates the set-up. We are aligned with an established actuarial and financial consultancy firm that specializes in the provision of tailored RCA programs that meet all of the Canada Revenue Agency guidelines.
Traditional employee, executive and entrepreneurial wealth supplements, such as the ubiquitous stock option, have lost their lustre under current market and economic conditions. Even the value of the trusted company pension has deflated in this environment of company-hopping. However, high-income earners have an alternative solution -- a retirement compensation arrangement (RCA) -- which can offset looming shortfalls and much more.
The growing appeal
Established in 1986 by the Canadian federal government, an RCA has typically been used by Canadian corporations as a tax-deductible vehicle for providing employees with additional retirement benefits. However, the shifting business conditions of the last five years have made RCAs more appealing for owners, entrepreneurs and corporations in search of alternative retirement, tax and capital funding programs. As a tax-deductible retirement savings plan funded by a company, an RCA generates supplemental cash for the employee or owner without compromising the integrity of his or her RRSP.
The money contributed by the company is held in a trust, half in a non-interest-bearing refundable tax account with the Canada Customs and Revenue Agency and half in an RCA trust account administered by a trustee. The funds from the trust are available upon retirement (or some other substantial change in employment) and the non-interest-bearing refundable tax account is paid out to the trustee, and ultimately to the employer, as the employee withdraws funds from the RCA.
Traditional employee, executive and entrepreneurial wealth supplements, such as the ubiquitous stock option, have lost their lustre under current market and economic conditions. Even the value of the trusted company pension has deflated in this environment of company-hopping. However, high-income earners have an alternative solution -- a retirement compensation arrangement (RCA) -- which can offset looming shortfalls and much more.
The growing appeal
Established in 1986 by the Canadian federal government, an RCA has typically been used by Canadian corporations as a tax-deductible vehicle for providing employees with additional retirement benefits. However, the shifting business conditions of the last five years have made RCAs more appealing for owners, entrepreneurs and corporations in search of alternative retirement, tax and capital funding programs. As a tax-deductible retirement savings plan funded by a company, an RCA generates supplemental cash for the employee or owner without compromising the integrity of his or her RRSP.
The money contributed by the company is held in a trust, half in a non-interest-bearing refundable tax account with the Canada Customs and Revenue Agency and half in an RCA trust account administered by a trustee. The funds from the trust are available upon retirement (or some other substantial change in employment) and the non-interest-bearing refundable tax account is paid out to the trustee, and ultimately to the employer, as the employee withdraws funds from the RCA.
Given the problems at companies such as Nortel, GM, Chrysler, (to name a few), gone are the days that employees/
executives will be satisfied with a promise that the company will top up any shortfalls from the company
Registered Pension Plan. Ask any executive from a now bankrupt company how they feel about any promised
supplemental retirement benefit or even stock option plans that are worth nothing. Paying large cash bonuses
upfront does not create the kind of real long-term incentive for an employee to stay with the company.
RCAs are based on final average earnings and years of service and become increasingly valuable over
time. As such, they offer the ultimate incentive for the employee/executive to stay with the company. The employee/
executive is rewarded from the cash profits of the company and is not dependent on the company’s
stock price at retirement for their retirement benefits.
the United Kingdom and France declared war on the German Empire and Austria-Hungary, following the German and Austrian invasions of their neighbors, including Serbia and the Russian Empire, which started World War I. Radio traffic across the Atlantic Ocean increased dramatically after the western Allies cut the German transatlantic submarine communication cables (telegraph-only at that time, well-before the first transatlantic telephone cable connected the United States with France in 1956.) Germany, Austria-Hungary, and their allies in Europe (the Central Powers) maintained contact with neutral countries in the Americas, such as the United States, Mexico, Brazil, Argentina, Chile, and Peru via long-distance radio communications, as well as via telegraph cables owned by neutral countries such as the Netherlands and Denmark.
In 1917, the U.S. Federal Government took charge of the patents owned by the major companies involved in radio manufacture in the United States in order to devote radio technology to the war effort. All production of radio equipment was allocated to the U.S. Army, U.S. Navy, U.S. Marine Corps, and the U.S. Coast Guard. The U.S. Department of War and the U.S. Department of the Navy sought to maintain a Federal monopoly of all uses of radio technology. However, the wartime takeover of all radio systems ended with the tabling of a bill to continue this by the U.S. Congress sometime in the latter part of 1918.
A Retirement Compensation Arrangement (RCA) allows a Company to make tax deductible contributions on behalf of owners and key employees for the purposes of supplemental retirement income. A RCA is ideally suited for high income earners who wish to sustain their standard of living into retirement. It is ideal for business owners, executives and professionals with professional corporations.
The RCA provides an avenue for retaining key employees ... in this case executives. The Company can build in vesting provisions. If the executive leaves the Company before vesting occurs, his or her benefits would either be allocated to the remaining members of the plan or paid back to the Company.
In the case of a family owned business, the RCA provides another means for wealth transfer to the children. In this case, the parent owners set up an RCA and add the children in as members once they begin to work for the business. When the parents retire they access the RCA to provide for themselves. Upon the death of both parents the remaining assets will pass to the children completely tax free.
An RCA can also facilitate an extended buyout of the family business by the children by arranging for the RCA to be funded post-retirement from the pre-tax operating income of the Company. This is a far better arrangement than children borrowing funds from a bank on an after-tax basis to fund the buyout.
Transitions Wealth Strategies provides guidance as to when a RCA is appropriate and coordinates the set-up. We are aligned with an established actuarial and financial consultancy firm that specializes in the provision of tailored RCA programs that meet all of the Canada Revenue Agency guidelines.
Traditional employee, executive and entrepreneurial wealth supplements, such as the ubiquitous stock option, have lost their lustre under current market and economic conditions. Even the value of the trusted company pension has deflated in this environment of company-hopping. However, high-income earners have an alternative solution -- a retirement compensation arrangement (RCA) -- which can offset looming shortfalls and much more.
The growing appeal
Established in 1986 by the Canadian federal government, an RCA has typically been used by Canadian corporations as a tax-deductible vehicle for providing employees with additional retirement benefits. However, the shifting business conditions of the last five years have made RCAs more appealing for owners, entrepreneurs and corporations in search of alternative retirement, tax and capital funding programs. As a tax-deductible retirement savings plan funded by a company, an RCA generates supplemental cash for the employee or owner without compromising the integrity of his or her RRSP.
The money contributed by the company is held in a trust, half in a non-interest-bearing refundable tax account with the Canada Customs and Revenue Agency and half in an RCA trust account administered by a trustee. The funds from the trust are available upon retirement (or some other substantial change in employment) and the non-interest-bearing refundable tax account is paid out to the trustee, and ultimately to the employer, as the employee withdraws funds from the RCA.
Traditional employee, executive and entrepreneurial wealth supplements, such as the ubiquitous stock option, have lost their lustre under current market and economic conditions. Even the value of the trusted company pension has deflated in this environment of company-hopping. However, high-income earners have an alternative solution -- a retirement compensation arrangement (RCA) -- which can offset looming shortfalls and much more.
The growing appeal
Established in 1986 by the Canadian federal government, an RCA has typically been used by Canadian corporations as a tax-deductible vehicle for providing employees with additional retirement benefits. However, the shifting business conditions of the last five years have made RCAs more appealing for owners, entrepreneurs and corporations in search of alternative retirement, tax and capital funding programs. As a tax-deductible retirement savings plan funded by a company, an RCA generates supplemental cash for the employee or owner without compromising the integrity of his or her RRSP.
The money contributed by the company is held in a trust, half in a non-interest-bearing refundable tax account with the Canada Customs and Revenue Agency and half in an RCA trust account administered by a trustee. The funds from the trust are available upon retirement (or some other substantial change in employment) and the non-interest-bearing refundable tax account is paid out to the trustee, and ultimately to the employer, as the employee withdraws funds from the RCA.
Given the problems at companies such as Nortel, GM, Chrysler, (to name a few), gone are the days that employees/
executives will be satisfied with a promise that the company will top up any shortfalls from the company
Registered Pension Plan. Ask any executive from a now bankrupt company how they feel about any promised
supplemental retirement benefit or even stock option plans that are worth nothing. Paying large cash bonuses
upfront does not create the kind of real long-term incentive for an employee to stay with the company.
RCAs are based on final average earnings and years of service and become increasingly valuable over
time. As such, they offer the ultimate incentive for the employee/executive to stay with the company. The employee/
executive is rewarded from the cash profits of the company and is not dependent on the company’s
stock price at retirement for their retirement benefits.