A Payroll Deduction Registered Retirement Savings Plan (GRRSP) can be an important component of your total employee benefits package. It’s an ideal, low-cost way to encourage your employees to prepare for eventual retirement.
A Payroll Deduction RRSP is simply a collection of individual RRSPs, where routine administration is centralized and members benefit from convenience and other advantages of regular monthly or bi-weekly payroll deductions.
Group RRSP Advantages:
- All contributions are tax deductible – reduce taxable income to employee
- Savings are tax sheltered
- Maximum amounts that can be contributed set each year by tax law
- Employer contributions are optional (but recommended)
- Employer contributions are tax deductible
- No pension plan compliance
- Can tie employer contributions/matching to employee’s years of service, profits etc.
- Can restrict ability for employees to access the employer and/or employee matched contributions while employed
- Simple to administer: electronic web-based contributions, employer’s role limited to handing out enrolment packages, making/sending payroll deductions and notifying when a member terminates
- Direct mailing of RRSP receipts and member statements to members’ homes
- Direct service to members by the provider – eliminates employer administration
Group RRSP – Employee Benefits:
- Employer match may provide immediate 100% return on investment
- Systematic payroll deductions provide painless savings
- Immediate tax relief
- Lower management fees
- Variety of options at termination of employment
- Wide range of investment options call centres (150 languages) and internet 24/7 access to account information and make changes