Group RRSPs

The Group RRSP is generally considered the simplest and most popular group retirement plan. For employers, a Group RRSP is easy to set up and employer contributions are voluntary. For employees, the tax savings associated with RRSP investing make it a top choice. Consider carefully the benefits of a Group RRSP:

Tax Deductibility: For your employees, all contributions are tax-deductible; as with any RRSP, earnings on investments are not taxed as long as the investments remain in an RRSP.

Ease of Contribution: Employees decide how much they will contribute per pay period and they can make lump-sum payments at any time.

Direct Contributions with Pre-Tax Dollars: Without a Group RRSP, most people’s contributions to an RRSP come out of their paycheques – money that has already been taxed. With a Group RRSP, you allocate a portion of your employees’ pre-tax earnings directly into their RRSPs. In effect, employees receive their tax “refund” instantly by saving throughout the year.

Spousal Plans Available: If one partner has significantly larger RRSP savings than the other, he or she may be taxed more heavily in retirement. It is therefore more beneficial for both partners to have equal RRSP savings. Spousal plans let employees contribute to their partner’s RRSP while maintaining the tax advantages of contributing to their own RRSP.

Flexibility and Popularity: Group RRSPs are one of the least expensive and most popular benefits that an employer can provide. Should you contribute to your employees’ RRSPs? That decision is completely up to you! If you do contribute, you may opt to match a percentage of their contributions, either on a regular basis or as part of a bonus program.​​​​​​​