Group Pension Plans
Setting up the proper plan for your company can be a daunting task. Foxgrove Benefits Consulting prides itself on its strength and knowledge of simplifying this process, by preparing retirement plans tailored to the business owner and their employees’ needs.
There are many plans available to your company, which include:
Money Purchase Pension Plan (MPP)
Pension plans are designed for Employer, Employee and Voluntary contributions. The Employer is responsible for registering the pension plan with both the Federal and Provincial Government departments. There is a onetime filing fee when you provincially register the plan, along with an Annual Information Return (AIR) that has to be completed yearly.
Pension plans have specific guidelines that must be followed and approved by governing authorities.
Employee contributions are paid directly to the pension plan and therefore have no affect on payroll cost.
Vesting of Employer contributions may extend up to 5 years. Employee and Employer accumulations are locked-in until retirement. Employees may transfer assets into a locked-in RRSP until termination of employment.
Employees cannot access assets until retirement; Annuity or LIF must be purchased.
Group Registered Retirement Savings Plan (RRSP)
Group RRSP’s are the most flexible retirement vehicle as there is no Federal or Provincial registration required. However, the Employer does lose control over their contributions as they are accessible to the Employee at any time.
Vesting of Employer contributions is immediate.
Employees have access to the plan assets at anytime.
Payroll costs increase as the Employer contributions have to be added to Employee income thus increasing CPP, UIC, and other benefit costs if the Employer contributes.
Structured Group Registered Retirement Savings Plan (STRP)
STRP’s allow an Employer to be exempt from the regulations and reporting of a pension plan, such as registering the plan with the Provincial or Federal authorities as well as filing an Annual Information Return (AIR).
This type of plan does increase payroll costs, as the Employer contributions have to be added to the Employee income thus, increasing CPP, UIC, and other benefit costs.
Employer and Employee accumulation are not locked-in on termination or retirement. Vesting of Employer contributions are immediate.
Employer flexibility with regards to contribution levels during both good and uncertain economic times.
Deferred Profit Sharing Plan (DPSP)
Only the Employer contributes.
The contribution formula can be based on a percentage of profits or if the Employer does not wish to disclose profits, contributions can be made out of profits.
Does not increase payroll costs.
Vesting is allowed.
Owners and Connected employees (Spouse, Parents, Brother/Sister, Children) are not allowed to participate in a DPSP.
