These plans can be tailored

to fit your unique needs

GROUP RETIREMENT PLANS

In a group registered retirement savings plan (RRSP) an employer offers the option to employees to contribute and be a part of the plan – there is no mandatory enrollment. The employee gets to decide the size of the contribution (whether it be a regular fixed amount of a percentage of monthly income) and the employer (through payroll) deducts the amount accordingly. The contribution is then deposited into the employees’ individual investment account.

The main difference of a Group RRSP v. an individual RRSP is that the contributor realizes the tax savings immediately, instead of having to wait till the end of the tax year. A Group RRSP reduces taxes at source and therefore provides the difference as extra take-home pay to be spent or saved as the employee pleases.

Tax Advantage – Employee Contribution
Example – employee earning $40,000 annually:

NO GROUP RRSP GROUP RRSP
Monthly Salary

Group RRSP Contribution

Taxable Amount

Tax Deducted at Source

Take Home Pay

 $5000

$0

$5000

-$1275

$3750

 $5000

$500

$4500

-$1125

$3375

The above table compares an employee who contributes to a Group RRSP to one who does not. For every $500 monthly contribution to a Group RRSP, take home pay is reduced by only $375 because the tax deducted at source is $150 less.

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