Group RRSPs and Pensions

A Group Registered Retirement Savings Plan (RRSP) is a collection of individual RRSPs where routine administration is centralized. Plan Sponsors are not required to contribute to the Group RRSP. It offers members special benefits, such as favourable interest rates and lower investment minimums, which they would not normally receive individually.

Sponsor advantages:

  • Plan design flexibility.
  • Can be used in conjunction with a pension plan or Deferred Profit Sharing Plan (DPSP).
  • Flexible eligibility rules.
  • Administration expenses paid by sponsors are tax deductible.
  • Reduced government reporting.
  • No requirement for employer contributions.

Member advantages:

  • A convenient, disciplined savings program through payroll deduction.
  • Immediate tax reductions.
  • Early investment yields more income.
  • Dollar cost averaging reduces investment risk.
  • Group buying power – higher interest rates and favourable investment management fees.
  • Income-splitting possibilities.
  • By naming a beneficiary, any death benefit is paid directly to the beneficiary with no need for probate.
  • Flexibility at termination and retirement – immediate vesting with no locking-in rules.