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Group Savings Plans

Group Savings Plans

Help employees save for the future with a Group Savings Plan. A valuable complement to a group life and health insurance program is a Group Savings Plan. A Group Savings Plan helps you to attract, keep and reward the great people that make up your organization.

At the Immix Group, our goal is to ensure that employers and employees receive proper education when it comes to their Group Savings Plan, and that the implementation and management of your program is simple and easy.

Simple to set up

At the Immix Group, we can help you set up and manage a program that:

Our goal is to ensure that employers and employees receive proper education when it comes to their Group Savings Plan, and that the implementation and management of your program is simple and easy.

Assists employees in systematic, tax-advantaged saving
Provides lower than retail fund fees
Provides access to professional advice
Potentially supplements savings with employer contributions
Helps retain and attract employees
Offers a competitive option for smaller businesses
Assists and rewards employees
Group Savings Plans don't have to be complicated.

Request your free guide to Group Savings Plans today.

Free Guide

Plan types

Group Savings Plans

Different group savings structures support different goals. The right mix depends on how you want to support employees, structure contributions, and approach long-term savings.

01

Group Registered Retirement Savings Plan

A Registered Retirement Savings Plan (RRSP) is a personal savings plan that is registered with the Canadian federal government allowing individuals to save for the future on a tax-sheltered basis.

The purpose of an RRSP is twofold: to reduce income taxes each year, and to defer tax on investment income until retirement, when one’s tax rate is expected to be reduced.

Key considerations

  • Employee contributions reduce taxable income
  • Employer contributions create a taxable benefit
  • The contribution limit is based on 18% of the previous year’s income, to an annual limit
  • Income earned within the RRSP is tax-deferred until withdrawal

A Group RRSP is simply a RRSP set up through an employer, offering contributions by payroll deduction.

02

Deferred Profit-Sharing Plans

A DPSP is an employer-sponsored registered plan and is often established in conjunction with a Group RRSP, to hold the employer contribution portion.

A DPSP offers

  • Contributions are tax-deductible and do not generate payroll tax
  • Contributions create a pension adjustment for the employee
  • Contribution limit is half the Money Purchase limit
  • Income earned within a DPSP is tax-deferred until withdrawal
  • Ability to include vesting provision, up to 2 years

The purpose of a DPSP is to share profits with employees; contributions can be calculated based on profits, a percentage of employee salaries, or another formula.

03

Registered Pension Plans

A Registered Pension Plan is subject to stricter regulations than other group savings programs.

Key considerations

  • Contributions are locked-in
  • Employers must contribute, regardless of business profitability
  • Federal and provincial legislation applies
  • Additional government reporting, compared with other group savings programs

Two main categories

  • Defined Contribution Plan: contribution levels are pre-determined and the future pension depends on account performance. Employees typically contribute a percentage of salary, which is matched by the employer.
  • Defined Benefit Plan: the future pension amount is determined based on a formula such as years of service. The plan is managed by the employer to ensure guaranteed pension payouts can be made, and employers and employees typically both contribute.
04

Tax-Free Savings Accounts

A Tax-Free Savings Account (TFSA) is an account that accrues tax-free savings.

Key considerations

  • Contributions are not tax deductible to employee
  • Employer contributions create a taxable benefit
  • No tax payable on the income earned within the account
  • No tax payable at withdrawal of the funds
  • Contribution limit adjusts each year, and accrues

While a TFSA does not provide the same tax advantages as a RRSP, employees can benefit through a consistent and systematic savings plan, and access to lower investment fees.

Why it matters

Reasons to consider implementing a Group Savings Plan

Financial Literacy
Financial Well-being

Set yourself apart as an employer: Offer your people the opportunity to save for their futures.

01

It gives your company a competitive edge.

Despite the process being simple and easy, most employers are not providing their teams with the opportunity to join an employer-sponsored group savings program such as a group RRSP, TFSA or DPSP. These employers are not taking advantage of this very simple, very meaningful way to help reward employees and cement their loyalty. Implementing a plan makes your company stand out in a good way.

02

It’s part of a comprehensive benefits offering.

If you have already implemented a comprehensive health benefits program, and you are paying competitive salaries within your industry and for your location, the next step is implementing a group savings program.

03

It’s cost-effective.

Generally speaking, other than a very small amount of administration time, the only cost to you as the employer is whatever you decide to contribute to your employees. If it is just not in the budget, you can still set up a plan that is for voluntary employee contributions only.

04

Help your team to succeed.

Saving money is hard, and it is stressful. Show your employees that you care about them and their future. Help them to save for their goals, whether it is for a down payment or for retirement. Just as with employee health insurance plans, your team will truly appreciate a group savings program. These plans are highly valued, far beyond the dollar equivalent in a salary raise.

Next step

Let’s build the right group savings plan for your team.

Whether you are introducing a new program or reviewing one already in place, Immix can help you clarify the right structure, support, and next step.

Need a plan? I’m setting up a group savings plan Have a plan? I want to review my current savings plan
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