Mackenzie Investments offers a comprehensive selection of Group Plans designed to meet a variety of objectives, including saving for retirement, sharing company profits or saving for a child's post-secondary education.
A Group RRSP is a collection of individual RRSPs where plan members (employees) make contributions through payroll deductions. Members realize instant tax savings because contributions are deducted from earnings before taxes are calculated. Key features:
- Plan sponsor contributions are voluntary.
- Plan sponsor contributions vest immediately and are not locked-in.
- A Group RRSP is easy to set up, operate, and if necessary, modify or terminate.
A Deferred Profit Sharing Plan (DPSP) offers plan sponsors a tax-efficient way to share profits with plan members. A DPSP may also be used to supplement a company's Group RRSP. Key features:
- Only a plan sponsor may contribute an amount out of profits or retained earnings, up to legislated maximums.
- Contributions and earnings are sheltered from income tax until withdrawn.
- A vesting period of up to two years of plan membership can be applied.
- Redemptions may be restriced.
A Defined Contribution plan is a formal arrangement made by a plan sponsor to provide members with a monthly income at retirement. A plan sponsor contributes a fixed percentage or dollar value of the member's pay. The member may also contribute a fixed amount as outlined in the plan document. Key features:
- The contribution formula is clearly defined with mandatory employer contributions.
- Plan sponsor contributions are not subject to payroll taxes.
- After contributions vest, all monies are locked-in.
- No redemptions are permitted.
View this chart for a comparison of the Group Plans above
A Group Tax-Free Savings Account is suitable for all Canadians (over 18 years of age) and can be used for any purpose. In a Group TFSA, savings can grow tax-free and can be withdrawn easily.
Having a Group TFSA may allow a member to reduce their taxes in retirement by ensuring that not all of their income is coming from a RRIF. Key features:
- Investment returns (capital gains, interest and dividends) are not taxed, even when withdrawn.
- Unused contribution room can be carried forward for future years.
- Amount withdrawn can be re-contributed in a future year without reducing contribution room.
In addition to the Group Plans listed above, Mackenzie Investments offers supplementary plans.
A Group Registered Education Savings Plan (RESP) is a popular way for members to save for their childrens education.Contributions are not tax-deductible, but RESP investments grow tax-free until the beneficiary withdraws the funds for post-secondary eligible school expenses. Several grants are available to those who are eligible.
A Group Non-Registered Payroll Savings Plan deducts contributions straight from a company's payroll. Members' savings are always accessible and have the potential to grow considerably faster than they would in a savings account.
Finding what works for you
Which Group Plan is right for you or your business? Call your advisor to discuss.