what is a deferred profit sharing plan dpsp 
a deferred profit sharing plan dpsp is a canadian employer sponsored profit sharing plan intended to help employees save for retirement the money in an employee s dpsp account grows on a tax deferred basis until it is withdrawn understanding deferred profit sharing plans dpsps dpsps are a type of pension plan registered with the canada revenue agency which is basically the canadian version of the internal revenue service irs in the united states on a periodic basis the employer shares profits from the business with all employees or a designated group of them through the dpsp employees who receive a share of the profits paid out by the employer do not have to pay federal taxes on the money until they later withdraw it from the dpsp an employer that offers a dpsp is referred to as the sponsor of the plan the funds are managed by a trustee the money in an employee s dpsp account grows tax deferred which can lead to bigger investment gains over time due to the compounding effect employees can withdraw part or all of their vested funds prior to retirement even if they are still working for that employer they can also transfer the money to another registered plan and maintain its tax deferred status taxes are due only upon withdrawal most plans allow individuals to decide how their dpsp money is invested though some companies may require employees to purchase company stock with their contributions 