It is no secret there is a huge talent shortage in Canada. Across the industry spectrum there are businesses desperate to hire top producers to replace an aging workforce. In this competitive environment, savvy employers see group RRSPs for Canadian businesses as a big incentive to attract and retain top talent. Here is what you need to know before offering group RRSP’s to your employees.
When should a company consider a group plan?
Group RRSP’s are a part of your overall compensation package. The first things you need to consider are a competitive salary, medical benefits and professional development. Once the basics are taken care of, group RRSP’s are an excellent choice for small businesses looking to hire the best of the talent pool.
What is the employer’s responsibility in a group RRSP?
As then employer you have a fiduciary responsibility to your employers. Anyone who is responsible for managing the assets of another person is considered a fiduciary, and the plan administrator falls into this category. This does not mean you are responsible for the performance of the investment within the RRSP, this simply means it is your fiduciary duty to act in the best interests of the plan members. If you are simply facilitating a payroll deduction and the employee makes all other decisions, the scope of your fiduciary duty is very limited.
What should companies not do when setting up a RRSP?
It might sound obvious but be sure to use a qualified group RRPS advisor when setting up a plan, not just someone you know who sets up investments. A qualified advisor knows how to create a mix of funds to create a good return for your staff. The point of a group RRSP is to lock in funds until retirement, not to be used as a savings account to withdraw funds from when necessary. When setting up group RRSPs for Canadian businesses, be sure to have some restrictions in place to ensure the fund remains viable for its intended purpose.
Group RRSPs for Canadian businesses can be an enigma to some business owners simply due to a lack of information available. If you are looking to improve your overall compensation package to attract and retain top talent, contact the employee retention experts at DENT Benefits today.
The information in this material is derived from various sources. Material is provided for general information and is subject to change without notice. Every effort has been made to compile this material from reliable sources; however, no warranty can be made as to its accuracy or completeness. Before acting on any of the above, please contact us for benefit, pension and insurance advice based on your corporate or personal circumstances.