Group RSPs and Pension Plans
In today’s competitive world, employers are often looking for ways to attract and retain employees for the long term.
Benefit plans such as health and dental programs are one of the first choices that employers offer, but we’ve now seen more and more employers choosing to offer retirement plans as well.
The three most popular plans being offered are Group RSPs, Group Pension Plans, and for small business owners Individual Pension Plans.
Our Financial Plans offer all three types of plans, and can assist you in making the right choice for your firm.
Registered Pension Plans
A Registered Pension Plan (RPP) consists of both employer and employees contributing funds on a tax deferred basis.
There are two types of RPPs-
Group RSPs
Group RRSPs also offer a tax-sheltered plan for contributions and interest or investment income to accumulate. Unlike RPPs though, employer contributions are considered optional. Any employer contributions are deductible as a salaried expense and are recorded as additional earnings on T4s. At retirement, the plan member has the option to convert to cash (taxable) or transfer to a Registered Retirement Income Fund (RRIF), with only the amount withdrawn being taxable.
While RRSPs are available to individuals, there are several distinct advantages to a group RRSP, such as;
Individual Pension Plans
For self employed and small business owners, an Individual Pension Plan (IPP) is very attractive.
An (IPP) is a defined benefit plan, usually with only one member. A spouse may be added to the plan if he/she is employed by the same or related company.
Some of the advantages of an IPP are;
Our Financial Plans will be happy to discuss the best options for your firm.
We’ll explain the plan types, as well as the tax impact of each. Additionally we can explain the investments available as well as how best to set up the plan, along with how best to manage the plan and the employee education process.