Even if you’re past the age of 25 don’t worry, it’s not too late. RRSP’s are still a great way to create that proverbial nest egg, and Group RRSP’s are an even easier way to get started.
We all know that saving is a good thing, and there are all kinds of benefits for the individual doing the saving but why would an employer bother to start a Group RRSP?
Offering a Group RRSP Plan definitely helps attract potential employees. The benefits of an RRSP are substantial. Lower taxable income, Investment Control, Portability, Flexible Contributions..ect. However with the employer’s ability to set timelines for accessibility to these investments it also encourages the employees to stay. For ex) You can set a minimum of 2 yrs before the Employee can have access to their funds. This is a GREAT RETENTION STRATEGY.
Employer Contributions are a DEDUCTIBLE EXPENSE. Not only that but you can choose what those contributions will be. You have control over your level of involvement and this can be adjusted at any time.
There is NO INITIAL COST for setting up a Group RRSP. There is however a small redemption fee that is charged for early redemption; and that fee is the responsibility of the Employee. For an employer this equals all the benefits without any cost other than the contributions.
Why not just set up individual RRSP’s for everyone instead of in a group? If a person brings $500 to the table they will certainly get more attention than 5 individuals bringing $100 to the table. Bringing a larger sum to the table via a Group RRSP is what results in a lower redemption fee relative to other deferred sales charges. However the money (while it may be pooled together initially) is always invested according to each individual’s requirements. Older employees would obviously have different investment strategies than say younger ones.
Are your eyes glazing over? Does the thought of handling financial decisions like that cause you to break out in a cold sweat? Are you thinking deep down that yeah it sounds great and all, but I would never be able to explain that to someone else much less try to set it up? ...Drum roll please!
Keith Wilkinson with Investors Group not only understands and remembers all this stuff but he can answer ANY questions you might have about it. He is your one stop shop for information, set up and management of a Group RRSP. Check out his website or contact him at firstname.lastname@example.org and he would be more than happy to hear from you.
"It is far better to be informed than opinionated."