Registered Retirement Savings Plan (RRSP) – A Group Savings Benefit to Grow Your Business and Help the Future of Your Employees
You rely on your employees daily to take your business to the next level. Their well-being is something you value, both for today and tomorrow. Having a comprehensive Registered Retirement Savings Plan (RRSP) is an excellent way to provide your staff with some financial security for the future.
A RRSP is a personal savings plan registered with the Canadian Government which allows your employee the ability to easily save for their future in a tax-sheltered environment.
RRSP’s are designed to be a cost-effective and secure way to save for the future. By working together employees and employers are able to create an excellent investment tool. Not only will you be helping your employees save for the future, an RRSP is a great tool for attracting and retaining valuable staff. As a business owner, you know the importance of having the right people in the right positions. Offering an RRSP can be a difference maker between a potential new hire signing on with your company or with a competitor.
You already have a lot on your plate and an RRSP should be simple for your business to manage. It’s important to work with a qualified local benefit advisor and find the right RRSP for you and your team. Remember, RRSPs are designed to scale and work for any organization; from a small two-employee operation to a business with hundreds of staff.
Contributions are automatically deducted from your employee’s pay. This makes the administration very easy and the financial impact of the employee’s contribution less noticeable.
Planning for retirement can be stressful and can come with some financial risk. RRSPs provide a safe and proven foundation for any personal financial plan. Group RRSPs are creditor-proof, this provides extra protection in the effect of a major financial issue.
Many Toronto employers opt to add a Deferred Profit Sharing Plan (DPSP) to their group sponsored plan. A DPSP adds more flexibility to your plan by linking your contributions directly to the profitability of your business. This provides more incentive for your staff to hit specific targets and goals; the greater success the business experiences, the greater the personal financial rewards for the employee.
Key Benefits for Both You and Employees
- Quick and easy employee application process
- Great selection of literature explaining the RRSP
- No RRSP administration fees
- Excellent online platform allowing staff to self-manage their plans
- No cost to you, the employer
A group Registered Retirement Savings Plan (RRSP) is a savings benefit that not only allows for planning ahead but also provides some great tax advantages. The income earned in an RRSP is not taxed until it is actually withdrawn from the account. While the money sits in the RRSP the investment’s growth is tax sheltered. Typically, when it’s time to access the funds the employee will be in a lower tax bracket and will, therefore, pay less tax. This provides some great short-term savings and allows the investments an opportunity to grow at a faster rate. The employee will also benefit from contributions being taken directly from their gross pay, they will only pay income tax on the reduced amount.
A Registered Retirement Savings Plan (RRSP) is designed for everyone. It doesn’t matter if you’re a seasoned investor or know very little about investing. Employees can take a hands-on approach to the administration of their RRSP, or they can simply let the investment grow on its own. Your employees will have the peace of mind knowing that their investment is both safe and is growing.
Thinking about bringing a Registered Retirement Savings Plan (RRSP) to your company? Speak with one of our local GTA financial advisors today and help us design an RRSP benefit that works for your business and employees.