A group RRSP plan is a highly attractive benefit for your employees. It provides the power to have RRSP contributions deducted at the source from every paycheque. The funds are invested and managed in individual RRSPs that match the employee’s investor profile.
A group RRSP is especially attractive to younger and mid-career professionals since it offers optional employer matching for each contribution. Employers also take on all costs of opening and managing the plan, though investment expenses fall to the individual.
A group RRSP can raise morale and make a Canadian employer more competitive in attracting top talent. It is also fairly simple for even small enterprises to manage. Due to the financial requirements, however, it’s important to implement your group RRSP in a methodical way.
Let’s look at four steps you should take during implementation:
Look at Your Current Cash Flow
Group RRSPs are fresh on people’s minds today: Many employers are using them to avoid relying on Ontario’s ORPP, for example. Although a group RRSP is flexible and contributions can vary over time, take stock of the financial outlook first. Robust finances will help you keep the implicit promise you make to employees by adopting a group RRSP.
Consider Your Hiring Needs Over the Next Two Years
Much can change in 12 or 24 months, so be sure the group RRSP will be right for your enterprise once innovation and market pressures are considered. If aggressive expansion is in the cards, your contribution scheme should take this into account. A sustainable, conservative approach at the beginning is better than making radical changes abruptly.
Do Some Preliminary Research to Learn Your Options
Although each employee has his or her own RRSP, all of a company’s RRSP accounts are typically managed by a single financial institution. Doing a little preliminary research about the financial brands in your area, the investment options they offer, and what expectations fall on you will serve you in good stead as you seek the right path forward.
Contact a Financial Advisor
To narrow down your options into the ideal one for you, it’s important to speak to an impartial financial advisor. A true expert in group RRSPs will be able to evaluate your company’s needs and provide guidance on an approach that will reduce your overhead and improve returns. Before you know it, you could have a reliable and competitive retirement savings plan in place.