It’s time to talk about employee benefits – specifically, the group RRSP (registered retirement savings plan). You’re probably familiar with regular RRSPs – a tax-deductible retirement plan to which you and your spouse contribute.
As an employer, you can offer group RRSPs to your employees. So how does it work? With a group RRSP, the employer sponsors a retirement investment plan to which employees contribute. Typically, your payroll software automatically deducts this contribution from your employee’s pay.
As the employer, you then pledge to match your employee’s contributions up to a percentage of their salary. How much you match is entirely your choice. Your employees then benefit from tax-deductible investments, more competitive fees and greater convenience.
Why should businesses offer a group RRSP in Canada?
Whatever your business, your employees are crucial – they’re your team, your driving force. But keeping your best employees isn’t always easy, and finding a replacement can be costly. In fact, replacing an entry-level employee can cost between 30 and 50 per cent of their annual salary. This cost rises to 150 and 400 per cent for mid and high-level employees, respectively.
Let’s face it: financial security is on most Canadians’ minds. Offering a group RRSP is a fantastic way to show your team you care – you’re taking a proactive approach to helping them save for retirement and providing a platform for them to grow. Plus, many of your employees may not have the means or knowledge to set up and contribute to an individual RRSP.
Invest in your employees, and they’ll invest in you.
How much will a group RRSP cost you?
Let’s talk cost. With PayEvo, there’s no cost to setting up a group RRSP and no cost to maintain one. Your only expense is matching employee contributions – and you determine that amount. In other words, you control the cost. And yes, that cost could be nothing – you can get started without matching employee contributions to gauge interest. It’s entirely up to you – we have the group RRSP option to fit your business.
Group RRSP FAQs
How do I set up a group RRSP?
Chat with one of our benefits architects. We’ll answer your questions and find the plan that suits your business.
How much do I have to contribute?
As much as you want. Typically, employers match employee contributions up to a percentage of their salary.
What happens if an employee leaves?
If an employee has contributed to a group RRSP and leaves the company, they typically have two options: they can transfer the funds to an RRSP in their name, or if there are no lock-in requirements, they can withdraw the funds.
How do my employees benefit?
Since this is a group RRSP, your employees have power in numbers, and they’ll receive better investment options and more competitive management fees.
They’ll also receive an income tax break. RRSP contributions lower the income tax your employees pay, and it’s easy to automate with the right payroll software.
As we mentioned above, automated RRSP deductions through payroll are fantastic. It allows your employees to contribute the same amount each month without fail. Take out the guesswork for easy budgeting.
Why should you offer benefits in 2023?
Attract, retain, reward – that’s the name of the game when it comes to benefits packages. And some pretty striking statistics show why businesses should put more effort into employee retention.
A 2021 study found that 83 per cent of Canadian workers want more health benefits than they’re provided. And they’re not afraid to take action – an ADP survey from July 2022 found that 24 per cent of Canadian workers recently changed jobs.
And when you consider how much it can cost to replace an employee (take a look at the numbers we referenced earlier), benefits become even more attractive.
Not sure how to get started? No problem – with us, we tailor benefits plans to your business – whatever your budget, we have a plan for you.