Group RRSP

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Through this convenient payroll savings plan, your employees can choose a savings plan that helps them build towards their savings goals each year.

The plan earns more with a rate guaranteed to be ¼ of 1 percent higher than comparable market rates and saves money with NO fees or service charges. Plus, there is withdrawal flexibility.

As an employer, you will be surprised by the reduced amount of administration when compared to other payroll savings plans.

Offering your employees an opportunity to contribute to an RRSP is a great way to help them plan for their future beyond their employment years. Whether they contribute for themselves or a spouse, OMISTA Credit Union offers a range of products to suit their needs, from fixed rates of six months to seven years to a variable market-driven rate. The key to a successful financial retirement is early planning and preparation.

Why are more employers selecting Group RRSP?
How is a Group RRSP set up?
Who can make contributions to a Group RRSP?
Who can I contact to set up a Group RRSP?

 

Why are more employers selecting Group RRSP?

 

Many employers want to provide a retirement savings program for their employees without the legislative burden and reporting requirements imposed under a Registered Pension Plan. This has resulted in substantial growth in the establishment of Group RRSPs.

 

A group of employees or members of an association can join together to participate in a Group RRSP.

 

Group RRSPs do not have the “locking-in” requirements of RPPs, however, the group plan can be structured to restrict withdrawals during the term of employment.  This restriction can apply to employer contributions only or to both the employer/employee contributions.  If this restriction is in place, withdrawals during the term of employment must be permitted for refund of excess contributions or other legislated requirements.

 

How is a Group RRSP set up?

 

It is a simple process for a company to set up a credit union Group RRSP.

 

There must be an agreement between the employer and the employee setting out the terms of the Group RRSP.  This includes:

·         When will contributions begin?

·         Who will contribute – the employer?  the employee?  both?

·         How much will be contributed?  How are these amounts determined?  Will overtime pay, bonuses, etc., be used in the calculation of contributions?

·         If the employee has insufficient RRSP contribution room, will there be provision for direct cash payment?

·         Will there be a restriction on withdrawals during term of employment?  if so, what contributions would this effect -- employer?  employee?  both?

·         Will there be any restriction on investment options?

  

The employer should communicate information to employees regarding the terms of the Group RRSP, the various investment options available and the options available to employees on retirement.

 

Who can make contributions to a Group RRSP?

 

A group RRSP can provide for employer or employee contributions or a combination of employer/employee contributions.

 

Employer contributions:

·         can be flexible in both timing and amount

·         may vary by employee class or even by individual employee; pay equity
laws and human rights legislation must be considered

·        are vested immediately; employers may wish to introduce a waiting period for participation

·         must be included as income for purposes of calculating CPP contributions, EI premiums and provincial health care levies funded through payroll taxes; may be included in the payroll assessable for purposes of calculating Workers' Compensation premiums

·        may be considered as earnings for purposes of determining benefits under the employer's group benefits plan and/or RPP

 

Employee contributions:

·         generally optional

·         can be made to an RRSP owned by the employee or his/her spouse

 

Who can I contact to set up a Group RRSP?

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