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WHY SHOULD AN EMPLOYER CONSIDER IMPLEMENTING A GROUP RRSP
PROGRAM?
1. HELP YOUR EMPLOYEES SAVE AS THEY EARN
A Group RRSP is an affordable and flexible alternative to assist
your employees with their retirement if it is not feasible to
implement a traditional pension plan and it does not burden
the employer with large financial or legal commitments.
2. FEES TO EMPLOYEES ARE LOW
1. MUTUAL FUND PURCHASE FEE: this is the fee that compensates
the financial advisor for his/her services, funds include this
in an acquisition fee or a deferred sales charge
2. ANNUAL INVESTMENT MANNAGEMENT FEE: to cover the cost of
the full time professional management and administration of
the funds there is a competitive annual management fee built
directly into the fund. Performance information and daily prices
quoted by the newspapers display the net figures with the management
fees and other operating expenses already deducted
3. WITHDRAWAL OR EXIT FEES: generally there is no termination
or partial withdrawal fee imposed on the Group RRSP plan by
the company. However, each employee should be aware that a deferred
sales charge could apply when they withdraw their money. Also,
remember that federal taxes are payable on all withdrawals from
an RRSP
4. ANNUAL TRUSTEE FEES: usually there is no annual trustee
fee
3. COMPANY HAS FEW RESPONSIBILITES
1. Initial set up of authorized payroll deductions for all
plan participants
2. Forwarding one total contribution cheque with a list of the
individual contributions to company for processing
3. Notifying company of any changes such as new participants,
terminations or address changes
4. Set any rules of participation and can customize plan with
advisor to control the following elements:
a. Eligibility of the employees
b. Contribution levels
c. Rules of Withdrawal
4. ADMINSITRATIVE SUPPORT PROVIDED BY FUND COMPANY
1. Provides the necessary forms for the start up of the plan
2. Processes all employee contributions, including lump sum
voluntary contributions, withdrawals, inter-fund transfers,
and transfer of assets from other RRSP plans
3. Allocates and invests the individual contributions of the
plans participants into the selected investment funds
4. Distributes the earnings of the investment funds to each
participant
5. Provides regular reporting to you and all plan participants
to keep everyone up to date and well informed. The necessary
tax receipts are also provided
This material is for information purposes only and should
not be construed as legal or tax advice. Every effort has been
made to ensure its accuracy, but errors and omissions are possible.
Individual circumstances may vary and specific legal and tax advice
is recommended. Future tax changes and market conditions may affect
this information.
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