Selecting a retirement program is among the most crucial decisions an employer could make on behalf of their workers and their company. The most suitable one encourages employees to save for retirement and assures them that you are making the essential preparations for their future. Building trust between your staff and you could be the difference in the world and make employees want to remain in your company for a long time.
Here are some of the most important aspects that companies must consider before deciding what type of retirement plans for groups is the best fit for their employees.
Be Aware of the Different Retirement Plans Available
Before you pick which plan is best for your business, you must know what group retirement plan options are available. The two programs, RRSPs and VRSPs, offer advantages and drawbacks based on your business.
The collective RRSP (registered pension savings program) is a grouping of individual RRSPs. However, it is an employer-sponsored retirement plan managed through the company. These plans are great for growing companies as there’s no age limit for making contributions, and employees can contribute until age 70. Employees can also set up periodic contributions taken from their paychecks. Suppose they fall below the contribution maximum at 18% of the amount they earned in the previous year’s salary. In that case, any remaining balance gets carried into the following year. A group RRSP is also simple to manage by an employer. Employers also have the option of choosing to create matching contributions or not.
The group VRSP is an optional retirement savings plan for small to medium-sized companies. It’s an excellent option for employers because contributions aren’t required. However, they aren’t subjected to payroll taxation and are considered a salary expense. The amount an employee puts in is tax-free until it gets withdrawn when they retire.
Consider Options Vs. Mandatory Plans
Most employees do not mind automatically enrolling in the plan their employer selects for them. However, it’s essential to be aware some prefer to set up the retirement plan themselves. Anyone over 18 and subject to income tax can create an RRSP. If an employer-sponsored VRSP is in place, the employees automatically enroll however they can choose to opt out of the plan in 60 days.
What Kinds of Customizations Are Available for Your Employees?
As important as deciding on group retirement plans for your workers is working out what gets included in your RRSP and VRSP. So it’s crucial to consider your employee’s needs, their feedback, and your company’s goals. Your personalized retirement plan will include when working out what travel, dental, health, and other components.
Are You Ready to Learn More About Plans for Group Retirement?
Are you interested in enhancing your current project or designing an innovative group retirement plan for your employees? Contact Ottawa Life Insurance today to learn more about our group retirement services. Our Contact details are call (613) 454-1424 and email info@ottawa-lifeinsurance.ca.
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