Business services
A Group RRSP is a collection of individual RRSP s established for the employees of a company or organization. Each participant contributes to their own personal, customized RRSP through payroll deduction, on a pre-tax basis, into individual accounts through a Group RRSP plan administrator.
A Group RRSP is best suited to your company if your business is growing and you have a group of employees that are skilled or semi-skilled and you have a desire to retain these employees to avoid the high cost of training new ones. You recognise the importance of attracting better quality candidates and a Group RRSP is one facet of an overall compensation package that will attract and retain the right type of employee for your company.
An Individual Pension Plan (IPP) has been described as an RRSP on steroids because for many business owners you can contribute more to an IPP than you can to a conventional RRSP.
An IPP is most advantageous for an owner/manager or executive of an incorporated business or a profession permitted to incorporate (e.g. a doctor, lawyer, dentist etc.) These individuals should have a steady income, should have attained a minimum age between 40 and 45 and have minimum T4 earnings of approximately $100,000. Typically, an IPP is best suited to an individual who maximizes their RRSP each year or who intends to.
These are only guidelines to reap the greatest benefit from establishing an IPP however, a business owner etc. can establish one if they fall below some of the minimums and still gain a greater advantage over a RRSP only strategy.
