GROUP SAVINGS PLANS
Custom Tailored Registered Group Savings & Deferred Profit-Sharing Plans
Help Your Employees to Save for the Future
Whether you're planning for retirement or working toward general financial goals, it's never too early to start saving. The process becomes even more rewarding when your employer plays an active role in helping you achieve these goals.
At Your Friend With Benefits Inc., we offer tailored group savings plans that cater to your employees' needs. The two most common types of accounts are Group Registered Retirement Savings Plans (RRSPs) and Deferred Profit-Sharing Plans (DPSPs).
Group Registered Retirement Savings Plan (RRSP)
A Group RRSP is a powerful tool for retirement savings, allowing employees to defer income tax on their contributions. These contributions are deducted from taxable income, effectively reducing the amount of income tax owed. Additionally, any income earned within the RRSP, including interest, dividends, and capital gains, is not taxed until the funds are withdrawn.
While a Group RRSP is not governed by pension standards legislation, it must be registered with the CRA. One of the key advantages of a Group RRSP is the potential for lower investment management fees (IMFs) compared to individual savings products. Employees also gain access to top fund managers that might not be available to individual investors.
Group Savings Flexibility
Fully Employee-Funded
Employees can contribute voluntarily without requiring a financial commitment from the employer.
Employer-Matching
Employers can match a percentage of the employee’s contributions, enhancing the savings potential.
Deferred Profit-Sharing Plan (DPSP)
A Deferred Profit-Sharing Plan (DPSP) is a unique savings option where employer contributions are tied to the company’s profitability. Unlike an RRSP, employees do not contribute to a DPSP. Instead, the business periodically shares its profits with employees by making contributions to the DPSP on their behalf.
DPSPs are available only as group arrangements and are often offered alongside a Group RRSP. Like the RRSP, a DPSP offers lower investment management fees (IMFs) compared to individual savings products and provides access to top fund managers typically unavailable to individual investors.
