Group Registered Retirement Savings Plan (GRRSP)

The Group RRSP is easy to set up and as the employer, your contributions to the plan are voluntary. The tax savings associated with RRSP investing make the Group RRSP a top choice with employees.

Tax Deductibility

All contributions (within the RRSP contribution room) are tax deductible. As with any RRSP plan, earnings on investments are not taxed as long as the investments remain in within the RRSP.

Ease of Contribution

Any Group RRSP member decides for themselves how much they are willing to contribute per pay period to their own RRSP plan within the company’s Group RRSP. On top of the RRSP contribution per pay (which can be either a percentage of the gross salary or a specified amount), the Group RRSP members have the option to deposit lump sum into their RRSP plan, within the company’s Group RRSP.

Contribute Directly Without Paying Taxes

In the absence of a Group RRSP, most people’s contributions to an RRSP, come out of their bank account – money has already been taxed. With the help of a Group RRSP however, you allocate a portion of your employee’s pre-tax pay directly into their RRSPs. In effect, employees receive their tax “refund” on every pay cheque.

Spousal Plans Available

Spousal plans let employees contribute to their spouse’s  RRSP and still get the same tax advantages as if contributing to their own RRSP.

Flexibility and Popularity

The decision whether or not to contribute to your employees’  RRSP is completely up to you. If you do contribute, you may opt to match a percentage of their contributions, either on a regular basis or as part of a bonus program. However, any contribution made to an employee’s Group RRSP plan, will be a Taxable Benefit to your employee, thus increasing the payroll taxes. There are other options around this issue, for instance using a DPSP. Please check our other Group Pension Options for more details.