Group Retirement Plan
February 24, 2022
If you run a business in Mississauga, offering a group retirement plan to your employees can be a great way to help you attract and retain talent. It can even give you an edge over your competition in many sectors.
What is a Group Retirement Plan?
Simply put, a Group Retirement Plan is a retirement savings plan that you and your employees can contribute to so that you’ll have a nice pension in the future. Generally speaking, a Group Retirement Plan invests into an RRSP, however there are some plans that also offer TFSA savings.
Group Retirement Plans offer you and your employees are range of Mutual Funds and GICs to choose from based on your risk tolerance. If your company is publicly listed, you can also offer your employees the option to purchase stocks in your company (although individual stocks in other companies are not permitted in your group plan).
As an incentive, to get their employees to participate in the Group Retirement Plan, many employers offer matching contributions. For example, if an employee contributes 5% of each paycheque into their group plan, then their employer may match 50% or even 100% of their contribution.
Although it is not required for the employer to contribute any matching funds, it is recommended that they do match at least a portion to ensure that employees see the value of their contributions. The main advantage that Group Retirement Plans have over Individual Plans is that the fees tend to be much less. The disadvantage however is that you don’t have as many funds to choose from.
The contributions that you make to a Group Retirement Plan will be deducted from your RRSP contribution room.
Is a Group Retirement Plan a Good Choice for You?
If your company is very small or just newly launched, you may not be ready to start offering a Group Retirement Plan, however it is never too early to contact your insurance broker in Mississauga and start exploring your options.
If you are looking for ways to attract the best employees and retain them, offering incentives such as a Group Retirement Plan can be extremely effective. Not only does it show that you value them and what to help ensure their financial security, it will also help to give you a reputation as a great employer.
If you would like to get started on setting up a Group Retirement Plan for your company, call us today to speak to an Insurance Broker in Mississauga.