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One of the most common group financial plans are group registered retirement savings plans (RRSPs). These are employer-sponsored retirement savings plans that allow employees to group their investments tax-free—a perk that can help employers provide a competitive benefits package.
A group RRSP is an employer-sponsored retirement savings plan. These plans are similar to individual RRSPs, but are instead managed on a group basis by an employer. Specifically, group RRSPs are looked after by insurance companies, mutual funds, or banks—employers and employees simply cover any plan management fees.
Under group RRSPs, contributions are made through an administrator on a pre-tax basis via direct payroll deductions. Employees can choose whether or not to enrol in a group RRSP and how much they would like to contribute. Often, employee contributions are matched.
Employees will receive an eligible tax deduction for the amount contributed. It should also be noted that employer contributions are tax-deductible and seen as a taxable benefit.
Other benefits of group RRSPs include: