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. Employees that plan to retire in the future should look at the benefits of ira vs 401k. 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.