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gggunit
05-25-2005, 02:10 PM
Whats the difference between getting RRSP through your work or getting them privately? at my work they provide Group RRSP's.. any idea's?

dgmartinez
05-25-2005, 02:38 PM
I have group RRSP through work, the match up to a certain amount of your contributions. Not sure what they do at your work tho.

I would expect that having them through work may get you a better return based on the amount in the pool as well as how much you contribute.

Shaolin
05-25-2005, 02:42 PM
your HR Advisor can explain it to you..

Xtrema
05-25-2005, 03:18 PM
The #1 adventage (and should apply to all) would be payroll deduction so you don't have to wait til end of year for tax refund.

Other benefit would be up the your HR coordinator as of any company matching or discounts and such.

roopi
05-25-2005, 07:13 PM
If they do matching take advantage and contribute the maximum they will match. It's free money. :thumbsup:

Xtrema
05-25-2005, 10:11 PM
Originally posted by roopi
If they do matching take advantage and contribute the maximum they will match. It's free money. :thumbsup:

But it's still RRSP or some sort of pension fund which means you have limited access to them. RRSP become income as soon as you take it out, so income tax applies and you can't touch pension til you're 65, if you live that long.

Put some away but at some point, once you get the ball rolling and it grows on its own, pull it back a bit and spend on some toys.

You don't want have too much money that you can't spend til you're so old that you can't really spend them.

Disoblige
03-20-2018, 09:07 AM
I have a question on group RRSPs and couldn't find a decent thread to ask in, but wasn't worth a new thread :rofl:

Website:
Your employer’s contributions to a registered pension plan on your behalf are not taxable. However, when your employer contributes to or matches your group RRSP contributions, this amount is viewed as taxable earnings that increase your income. If you notify your employer that you have sufficient RRSP contribution room, your employer may deposit the full amount into your RRSP account without any withholding tax being deducted. And as long as you have RRSP contribution room, you can deduct the total amount contributed to your RRSP in the year of contribution or a future year. Be aware, however, that your employer’s contribution to your pension reduces your RRSP contribution room the following year, via the “pension adjustment” that is reported on your T4 and that the CRA notifies you about every year.

So I know that when your company contributes money or matches to a group RRSP, that is an employee benefit, hence it is taxable. Now, what is this whole thing about letting your employer know you have enough contribution room and you won't have any withholding tax deducted? What is the benefit of this? Is it so you have the money in your GRSP directly, but you can't get the money back on your tax return? Not really understanding this as I always simply thought my company would contribute, and I lower my income on my tax return and get money back.

Mitsu3000gt
03-20-2018, 09:47 AM
The biggest thing to watch out for with RRSP matching is where the money goes - often it's into a managed account with one of the major banks with absurd fees and horrible return. Get it out of there immediately and into your own investments or an ETF or something, there is often an option to do that.

The other common thing is an option between company stock and a self-directed RRSP. Sometimes you don't have a choice and have to take stock, but usually you can choose.

Disoblige
03-20-2018, 10:04 AM
The biggest thing to watch out for with RRSP matching is where the money goes - often it's into a managed account with one of the major banks with absurd fees and horrible return. Get it out of there immediately and into your own investments or an ETF or something, there is often an option to do that.

The other common thing is an option between company stock and a self-directed RRSP. Sometimes you don't have a choice and have to take stock, but usually you can choose.
Thanks for not answering my question whatsoever :P

lasimmon
03-20-2018, 10:11 AM
The biggest thing to watch out for with RRSP matching is where the money goes - often it's into a managed account with one of the major banks with absurd fees and horrible return. Get it out of there immediately and into your own investments or an ETF or something, there is often an option to do that.

The other common thing is an option between company stock and a self-directed RRSP. Sometimes you don't have a choice and have to take stock, but usually you can choose.

Is there any group plan that allows you to withdraw or transfer to a different plan while still employed? I haven't seen one.

Mitsu3000gt
03-20-2018, 10:36 AM
Is there any group plan that allows you to withdraw or transfer to a different plan while still employed? I haven't seen one.

Mine has always allowed that in some capacity. I've seen it done a 3 different ways where I've worked:

1) I have no choice but to take company stock, but I can turn around and immediately sell the stock, and then transfer that cash out into my own personal RRSP account (I.e. Questrade). This is the most hassle but you can do it.

2) You can either take straight cash into your own RRSP, or you can use the super shitty provided RRSP investment package done through a major bank with ridiculous management fees and garbage return. Usually you have to actively opt out if you just want cash, and I don't remember if the private RRSP had to stay within the institution your company is using or not (RBC or whatever), I had this situation 5-6 years ago now so I don't remember that detail. It doesn't make too much of a difference other than that it's easier to not have multiple RRSP accounts with multiple institutions, and you are probably paying $20/transaction so you will want to do them in tranches.

3) You make your own contribution to your own RRSP, and the company matches up to the lesser of X% of your salary or the same amount you contributed. You just need to prove to them you contributed within that year, along with the amount. So if you contribute $1 they match $1. If you contribute $50K, they match up to X% of you salary.

Depends on the employer, those are the only scenarios I have seen so far personally.

ExtraSlow
03-20-2018, 10:41 AM
I have a question on group RRSPs and couldn't find a decent thread to ask in, but wasn't worth a new thread :rofl:

Website:
Your employer’s contributions to a registered pension plan on your behalf are not taxable. However, when your employer contributes to or matches your group RRSP contributions, this amount is viewed as taxable earnings that increase your income. If you notify your employer that you have sufficient RRSP contribution room, your employer may deposit the full amount into your RRSP account without any withholding tax being deducted. And as long as you have RRSP contribution room, you can deduct the total amount contributed to your RRSP in the year of contribution or a future year. Be aware, however, that your employer’s contribution to your pension reduces your RRSP contribution room the following year, via the “pension adjustment” that is reported on your T4 and that the CRA notifies you about every year.

So I know that when your company contributes money or matches to a group RRSP, that is an employee benefit, hence it is taxable. Now, what is this whole thing about letting your employer know you have enough contribution room and you won't have any withholding tax deducted? What is the benefit of this? Is it so you have the money in your GRSP directly, but you can't get the money back on your tax return? Not really understanding this as I always simply thought my company would contribute, and I lower my income on my tax return and get money back.

I think I understand your confusion. When you contribute money to your RRSP, you use after tax dollars and then you get a tax refund at the end of the year. When your company does the contribution, they effectively use pre-tax dollars (because they don't withold the tax on that amount) and thus you don't get a big refund at the end of the year.

I don't think all GRRSP's work like that, but that's how I'm reading yours.


EDIT: and yes, I've never had a Groups RRSP that allowed you to withdraw while you were employed there. Mine have always required them to be transferred to a LIRSP after employment ends.

- - - Updated - - -


Mine has always allowed that in some capacity. I've seen it done a 3 different ways where I've worked:

1) I have no choice but to take company stock, but I can turn around and immediately sell the stock, and then transfer that cash out into my own personal RRSP account (I.e. Questrade). This is the most hassle but you can do it.

2) You can either take straight cash into your own RRSP, or you can use the super shitty provided RRSP investment package done through a major bank with ridiculous management fees and garbage return. Usually you have to actively opt out if you just want cash, and I don't remember if the private RRSP had to stay within the institution your company is using or not (RBC or whatever), I had this situation 5-6 years ago now so I don't remember that detail. It doesn't make too much of a difference other than that it's easier to not have multiple RRSP accounts with multiple institutions, and you are probably paying $20/transaction so you will want to do them in tranches.

3) You make your own contribution to your own RRSP, and the company matches up to the lesser of X% of your salary or the same amount you contributed. You just need to prove to them you contributed within that year, along with the amount. So if you contribute $1 they match $1. If you contribute $50K, they match up to X% of you salary.

Depends on the employer, those are the only scenarios I have seen so far personally.

Wow, none of mine have allowed any of those options.

Xtrema
03-20-2018, 10:44 AM
Is there any group plan that allows you to withdraw or transfer to a different plan while still employed? I haven't seen one.

Ours does. While ours is set up under RBC, the money can be placed in any RBC products or transferred out to other RRSP portfolios at other institutes.

Mitsu3000gt
03-20-2018, 10:45 AM
Wow, none of mine have allowed any of those options.

I've mostly worked for private companies, maybe that could be why they are more flexible? I am not sure. For the public company I worked for and got stock, I had to put in orders to sell it myself and then the cash had to stay within an RRSP, I couldn't just just put it in my chequing account.

lasimmon
03-20-2018, 10:54 AM
Ours does. While ours is set up under RBC, the money can be placed in any RBC products or transferred out to other RRSP portfolios at other institutes.

The money you get from your Company? I have never seen that. I have only seen you have to leave the money you get matched in until you leave the company.

Xtrema
03-20-2018, 11:01 AM
The money you get from your Company? I have never seen that. I have only seen you have to leave the money you get matched in until you leave the company.

Due to the nature of the business and high turnover, they don't want to manage that kind of headache. Once it's paid, it's yours. That's why most people quit in March. :D

Disoblige
03-20-2018, 11:08 AM
I think I understand your confusion. When you contribute money to your RRSP, you use after tax dollars and then you get a tax refund at the end of the year. When your company does the contribution, they effectively use pre-tax dollars (because they don't withold the tax on that amount) and thus you don't get a big refund at the end of the year.
So my question now is this. My employer stated that any contributions directed to RRSP will have NO taxes withheld. It is up to me to make sure I have enough contribution room. That makes sense.
BUT. Let's say I received a performance bonus in 2017 and I was given the option to direct some or all of it into my RRSP directly. Should this NOT have withholding taxes deducted? I looked at my statement last year and it shows an amount after taxation, not the full bonus amount. Or is there something I am missing?

Edit: It looks like it also takes a chunk out of EI & CPP if you haven't maxed it out yet. However, it still charged a big chunk of income tax. So I'm still slightly confused.

Coles notes, my issue is that it looks like my bonus is being taxed even though I am putting it directly into my GRSP. I thought it was supposed to not have any income tax deducted. Looks like they deducted CPP, EI, and income tax as well on the bonus.

ExtraSlow
03-20-2018, 11:27 AM
Different companies do this different ways, and from what you are saying, it sounds like maybe your company doesn't deduct taxes on "regular" contributions, but DOES deduct them on contributions from your bonus. That's confusing. As long as you have sufficient RRSP room, it's no big deal and I'll all work out on your taxes. If you somehow ran out or RRSP contribution room and over-contributed you might have to pay tax on that amount because you may not have had enough deducted through the year.

Frustrating situation, and it sounds like your company could handle it better.

suntan
03-20-2018, 12:54 PM
I'm jealous of my wife's work investment plan. All index etfs for the equity portion, and actively managed bond fund. All for a ridiculously low MER.

timdog
03-21-2018, 11:33 AM
I'm confused here - My understanding of a group rrsp is that the money is yours as soon as its in your account, and you can do whatever you want with it. you could transfer it to a different account after every contribution, change the investments, etc. Employers do not have insight/access into your personal accounts. I think when people are talking about a company requiring you to have specific investments and needing to transfer to LIRA/etc when you leave the employer, they are talking about Pensions. there are defined contribution pension plans and defined benefit pension plans. Defined Contribution (DCP) acts alot like a GRRSP but is more restricted. tradition GRRSP however is just a regular RRSP, in your own name, that your employer generally matches contributions to and offers reduced fees and access to an advisor at reduced/no cost.
I've worked for 3 different companies that had GRRSPs, and in every case I could do whatever I wanted with the money as soon as a contribution was made. I could put the money in a self directed account and buy ETFs or stocks, i could buy their run of the mill recommended Mutual funds, etc. When I left those employers, I transferred out of their required provider (Scotia, RBC, TD) and into my personal RRSP account, no fee and no restrictions. I've also worked for a company that had a DCP. much more restricted in investment choices.. when i left that employer I transferred to my personal account as well, but it had to sit in a separate LIRA account.

I should add that it's very common for GRRSPs to appear restricted, meaning they initially show you your 5 mutual fund options or something, and try to manage it all for you. but in reality, in my experience, you can say fuck that and ask for whatever you want. all your company generally needs is an account number to transfer the funds into each pay period (your contribution + theirs). your company would not (and legally cant) have any insight or access into your account or investments.