benefits of Group RRSP

[Gorilla]

Is there is difference with going with a group RRSP? anyone part of anything like this through work?

[redline]

Group RRSP?? Do mean a company savings plan that goes into a self directed RRSP?

If so most oil companies now have some form of have this with a matching compenant. It is great way to save and max out your RRSP.

[sputnik]

It depends on the rules of the group RRSP and what they let you invest in.

- Does the company group RRSP match your contributions? This is a GOOD thing 99.9% of the time (its FREE money).

- Does your company have a vesting period? Some companies will require you to stay with the company for a year or two before their contributions are yours. If you leave early you only get what you contributed and their portion goes back to the company.

- Does your company have a good suite of mutual funds or other investment options? Some companies have a small range of mutuals that arent the best performing. This isnt a HUGE issue for many because (in most cases) if the company contributes in addition to your contributions you are still going to get a better return even if the mutual funds are flat.

[Xtrema]

Benefits:

1) Payroll deduction, taxman will tax you less. So instead waiting for a refund after filing, you are refunded at every paycheck. Taxman keep less of your money and you get to apply cost average to you investment.

2) Company contribution, if there're any. Most oil companies will contribute some $ toward a pension plan.

3) Possible lower fees due to higher volume of transaction (although not likely)

Disadvantages:

1) Rules on withdrawal imposed by company

2) Pension may end up going into LIRA instead of RRSP. The difference is that LIRA cannot be withdrawn until you're 65 while RRSP can be withdrawn anytime, you just have to pay taxes on them.