Group Registered Retirement Savings Plans (Group RRSPs) are employee-sponsored retirement savings plan. That means, your employees have Registered Retirement Savings Plans that are administered by you on a group basis, and are looked after by insurance companies, mutual funds or banks. You as an employer cover the plan management fees.
Your employees build their savings by putting money into their RRSP account. The payroll department of your company withholds pre-tax money from the employees’ cheques, and sends it to an insurance company that provides Group RRSP.
This means that if employees contribute $100 into their Group RRSP, only $70 comes out of their cheque. It is up to them to decide how they want to invest their money. We fully educate your people in the available options, and help them make smart investment decisions.
To increase the potential of this plan, the employer can add a contribution to it. The contribution made by the employer is taxed, because it is rendered as employee income.
Compared to Pension Plans, Group RRSPs are much easier for the employers. There is less red tape and you have the flexibility to plan according to your budget and goals. If your company has a challenging financial year, you have the option of cutting your contribution for that year. It is very difficult to do that with a Pension Plan.
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