A Group RRSP is a collection of individual RRSPs, into which employees and/or their employer make contributions through regular payroll deductions on a pre-tax basis.

Most retirement plans are designed to shelter taxes on any gains made until retirement, at which point employees usually enter a lower marginal tax bracket. The Canadian government also offers incentives to contribute to a registered retirement plan by lowering the employee's taxable income in the year that contributions are made. In essence, Canadians are encouraged to save for their RRSPs.

Group RRSPs: Employer Benefits

Administrative simplicity. The cost of Group RRSPs are low because they are usually the easiest group plan to administer.

Employee empowerment. With the appropriate advice of an independent financial advisor, employees control their investments. The result is an employee who is both empowered and more satisfied.

Attract and retain key employees. A group retirement plan is among the most important aspects of your overall employee benefit program. A good retirement program may determine which employees you attract and retain, reducing training and development costs.

Design flexibility. You control virtually all aspects of the plan, from plan member eligibility to employer contributions.

Note to employers: CPP, EI, workers compensation and employee health tax may increase with a Group RRSP. Employer contributions are considered a taxable benefit to the employee.

A licensed financial advisor will help establish the right retirement plan for your company and its employees and may reduce your fiduciary liability. All Mackenzie and MRS accounts require an independent financial advisor.