Group RRSPs
I only go to work on days that don't end in a 'y'. - Robert Paul
What are Group RRSPs?
Group RRSPs are simply a collection of individual RRSPs where the employer arranges for the employees to make contributions through regular payroll deductions on a
pre-tax basis. Group RRSPs offer compound growth potential, portability (can be carried to other employer Group RRSPs or to an individual RRSP), flexibility (can be tailor made to each employee’s investment strategy, offering a wide variety of options), diversification (maximizing potential and minimizing risk), and immediate tax benefits (paying tax
after your deduction
not before).
Employer benefits to Group RRSPs
- Administrative Simplicity
- Employee Empowerment – With the appropriate advice of an independent financial professional, employees control their investments. The result is an employee who is both empowered and more satisfied.
- Attract and retain key employees – A Group RRSP is among the most important aspects of your overall group benefit program. A good retirement program may determine which employees you attract and retain, reducing training and development costs.
- Design Flexibility – You control virtually all aspects of the plan, from plan member eligibility to employer contributions. Note that if the employer elects to contribute, these contributions are considered a taxable benefit to the employee.
Employee benefits to Group RRSPs
No matter how satisfying it may be to get a tax refund from the CRA, getting one really means you gave the government an interest free loan. With a Group RRSP, contributions are made on a
pre-tax basis so the amount of tax your employer is required to deduct at source is calculated
after your Group RRSP contribution, giving you instant tax savings. Other benefits include…
- Individually tailored investment strategies
- Regular statements
- Ability to roll into a RRIF or annuity upon retirement
- Offers advantages of payroll contributions and spousal plans
- Opportunity to take advantage of dollar cost averaging and tax sheltered compounding
For more information on Group RRSP plans and how to implement them, please
Contact Us.
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