Group Retirement Customized investment plans for your employees’ future
Group retirement plans provide one of the best tax-sheltering opportunities available and can be a significant benefit to employees. With the long term viability of government sponsored pension plans in question, group retirement plans together with individual RRSP plans play a major role for most Canadians in saving for their retirement. From the viewpoint of the plan sponsor, group retirement plans can play a very significant role in attracting new employees and increasing employee retention.
There are many options available when putting together a group retirement plan. Factors that should be taken into consideration when determining which options are appropriate include:
- Contribution levels – Should the plan be contributory or only funded by the employer? What percentage should the employer contribute? Should there be a matching formula?
- Contribution Flexibility – Should contributions be uniform? Linked to profitability? Discretionary? Linked to years of service?
- Vesting and Eligibility – Should the plan vest immediately (maximum vesting period is 2 years)? Who should be eligible for the retirement plan and after how long?
- Administration – Is plan administration practical given the size of the workforce and the objectives of the plan?
- Costs – What are the costs associated with each option? Are the costs reasonable given the objectives of the plan?
Only after a very thorough review of all the retirement options and the implications of each, can an appropriate group retirement plan be developed.