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.
Group Registered Retirement Savings Plans (Group RRSPs)
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- Contributions and earnings are sheltered from income tax until withdrawn.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 restricted.
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
Group Tax-Free Savings Accounts (Group TFSAs)
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 In a Group TFSA, savings can grow tax-free and can be withdrawn easily.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- Investment returns (capital gains, interest and dividends) are not taxed, even when withdrawn.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- Amount withdrawn can be re-contributed in a future year without reducing contribution room.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 your client
For more information on Mackenzie Investments Group Plans, contact the dedicated Group Plans Sales Team.
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.
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This should not be construed as legal, tax or accounting advice. This material has been prepared for information purposes only. The tax information provided in this document is general in nature and each client should consult with their own tax advisor, accountant and lawyer before pursuing any strategy described herein as each client’s individual circumstances are unique. We have endeavored to ensure the accuracy of the information provided at the time that it was written, however, should the information in this document be incorrect or incomplete or should the law or its interpretation change after the date of this document, the advice provided may be incorrect or inappropriate. There should be no expectation that the information will be updated, supplemented or revised whether as a result of new information, changing circumstances, future events or otherwise. We are not responsible for errors contained in this document or to anyone who relies on the information contained in this document. Please consult your own legal and tax advisor.