It is an initiative by the employer who arranges for the company’s employees to make contributions in a group RRSP via payroll deductions.
In group RRSP, employee contribute some part of their income in order to achieve various benefits like instant tax savings, investment options and reduced fees, etc. Employees can save taxes on their income by contributing to group RRSP which reduces the taxable income.
A part of setting up a Group RRSP is to have a wide variety of investment options for employees which are not usually available for single investors. The fees on these accounts can also be lessened because of the buying power of group of investors. It enables employees to put more in their pocket rather than giving it away in fees. With easy to administer Group RRSP plans, employer benefits by retaining good employees for longer term.
If employees decide to leave the company, the funds can be transferred to their individual pension plan. For more information on how to set up a Group RRSP, please give us a call so that we can better assist you.