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Group Retirement Savings

Defined Contribution (DC), plans are offered by most Employers nowadays. DC plans expect employees to shoulder some of the investment risk: While your employer oversees and contributes to the program, your level of retirement income isn’t guaranteed. Instead, it’s up to you to decide how to invest the money, usually by choosing from among a menu of mutual / segregated fund–like options.

There are other versions like, as follows –

1) Deferred Profit Sharing Plan (DPSP) – A DPSP is an employer-sponsored profit sharing plan registered as a trust with the Canada Revenue Agency (CRA). On a periodic basis, the Employer shares business profits with the Employees by contributing to the DPSP on each Employee’s behalf. Member contributions are not permitted. A DPSP gives the Employer the option to link contributions to profitability of the business. There is no minimum required contribution – if there is negligible profit in a year, the sponsor is not required to contribute. A DPSP is usually offered in conjunction with a group RRSP. The employee contributes to the group RRSP and the employer’s matching contributions are deposited to the DPSP.

2) Pooled Registered Pension Plan (PRPP) – Available in all provinces outside of Quebec, the Pooled Registered Pension Plan (PRPP) is simple, affordable and quick-to-set-up for federally regulated employers and self-employed individuals. Its a simplified Defined Contribution Plan, designed for small & medium businesses.

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