Group Retirement Savings Plans

Is it time for a raise?

You should consider a Group retirement savings plan if you’re contemplating a raise. With at source deductions, both employer and employee will realize immediate tax benefits.

Additionally, choosing the right plan doesn’t have to be confusing. At Crossgrove & Company we understand each customer’s unique needs.  Get the answers you need by sitting down with one of our group retirement specialists.

A tax-effective way to compensate and protect the well-being of your employees

“The Crossgrove Team is action and results oriented. I value their knowledge and professionalism. They have listened and identified our needs for 10 years”

Victor Rocine

President, Change Integration Systems

Independent Consultants

Who are we?

Whether you are sponsoring a group RRSP, a Defined Benefit (DB) or Defined Contribution (DC) Registered Pension Plan (RPP), an DPSP or the new Pooled Registered Pension Plan (PRPP), Crossgrove & Company brings a wealth of experience and industry knowledge to the table to recommend the right option for your organization. We provide plan sponsors with expertise in risk management to ensure proper compliance with regulatory and fiduciary obligations.

Negotiators

Our value-added service

With Preferred relationships with multiple carriers, Crossgrove & Company will tender service offerings and negotiate with service providers to help secure the most cost-effective plan for your members.

Educators

Financial Advice to Members

The key difference between financial success and failure for members of a group retirement plan is often the behaviour of the individual members. Through education sessions and one on one meetings with an accredited financial advisor, Crossgrove & Company will be there to make sure that your members will have everything they need to make the right financial choices.

What are group retirement plans?

As a business owner, you’re constantly thinking of ways to attract and retain valuable employees – thereby reducing the expense of recruiting, onboarding and training. It may be worthwhile to consider adding a group retirement savings plan.

For example, a GRSP is a collection of individual RRSP accounts administered by a company or organization (the plan “Sponsor”) on behalf of its employees (members). It allows employees to contribute directly from their payroll using pre-tax dollars.

Benefits to your employees

Low fees – When fees are low, savings grow! The investment management fees (IMFs) in a group plan are typically lower than the management expense ratio fees charged by individual mutual funds and banks

Immediate tax savings – employees see immediate tax savings with the group RRSP if contributions are deducted from their gross pay, which means they pay income tax only on the reduced amount

Group RRSP

A group Registered Retirement Savings Plan (RRSP) is a savings vehicle offered by an employer to his/her employees as a way to save for their retirement. Employees can contribute to the plan and attain certain advantages.

Eligibility: Employees must have contribution room. Employers may limit eligibility according to any criteria.

Contribution Limits: Set at 18% of previous year’s earnings to an annual maximum ($24,930 in 2015), plus any carry forward RRSP contribution room, less any pension adjustments. These limits are updated annually. 

Employer contributions – Tax Implications: Deductible as a salary expense and are considered a taxable benefit to the employee. Employer contributions are subject to payroll tax. 

Vesting: Employee is immediately entitled to all contributions. 

Pooled Registered

A Pooled Registered Pension Plan (RRSP) is a plan designed fro small to medium-sized businesses, as well as self-emploued business owners. Easy to set up and manage.

Eligibility: Full time employees are eligible immediately; part time employees are eligible after 24 months of conitnuous service. All eligilble employees are auto-enrolled in the plan and have 60 days to opt of the plan participation.

Contribution Limits: Set at 18% of previous year’s earnings to a maximum of $24,930 in 2015, plus any carry forward RRSP contribution room, less any pension adjustments. These limits are updated annually. 

Employer contributions – Tax Implications: Deductible as a salary expense. Not subject to payroll tax. 

Vesting: Employee is immediately entitled to all contributions. 

Defined Contribution

A tax deferred retirement plan to attract and retain employees by encouraging long-term saving and loyalty through a variable vesting schedule and locking-in feature.

Eligibility: In most provinces, employees must be eligible for membership after 2 years of service with the employer. Part-time employers may need to meet specified earnings or hours criteria.

Contribution Limits: Maximum contribution limits set at 18% of current year’s earned income to a maximum of $25,730 in 2015 (These limits are updated anually). The employer may elect a formula that is a percentage of the employee’s salary or a flat dollar amount. Minimum employer contributions is 1% of employee earnings.

Employer contributions – Tax Implications: Contributions made by employer are tax deductible. They are NOT considered additional salary or a taxable benefit to the employee and are not subject to payroll taxes.

Vesting: Province specifies minimum requirements, usually after 2 years of plan membership or sooner. Plan provisions may specify sooner than 2 years. Federal, Quebec, Ontario, Manitoba and Alberta vest immediately. 

Group TFSA

A group Tax-Free Savings Plan (TFSA) is an additional savings account that enables money to grow tax free.

Eligibility: Members must be at least 18 years of age. Eligibility is not governed by legislation. Employers may limit eligibility according to any criteria.

Contribution Limits: $10,000 per year. This annual dollar amount has been indexed to the inflation rate. Unused TFSA contribution room from previous years can be carried forward. Withdrawals in a year will be added back to the member’s contribution room the following year.

Employer contributions – Tax Implications: Deductible as a salary expense and are considered a taxable benefit to the employee. Employer contributions are subject to payroll tax. 

Vesting: Employee is immediately entitled to all contributions. 

Defined Profit Sharing

A tax deferred savings plan designed for employers to contribute to employees’ retirement by sharing company’s profits.

Eligibility: Any employees who are not related to the employer, a specified shareholder of the employer’s firm, or a related company, are eligible.

Contribution Limits: Employer contributions only. Employer contributions are limited to the lesser of 18% of the employee’s compensation from the employer and the maximum DPSP dollar limit for the year (currenlty $12,685 in 2015), which is one half of the Defined Contribution Pension Plan Limit. 

Employer contributions – Tax Implications: Contributions made by employer are tax deductible. They are NOT considered additional salary or a taxable benefit to the employee and are not subject to payroll taxes.

Vesting: Contributions may be vested after 2 years of plan membership. Plan provisions may specify sooner than 2 years. 

Have a question?

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