A Group RRSP is a collection of individual RRSPs, where an employer assists employees by handling their contribution through regular payroll deductions on a pre-tax basis. By setting up a Group RRSP for a companies employees, an employer is expressing their investment in the people who work for them and assisting them with their financial security.
A Group RRSP can cut an employees taxes instantly – these plans are designed to minimize taxes on the income they receive until they retire, at which point they will most likely be in a lower marginal tax bracket. They have a maximum amount an employee can invest based on their previous year’s income and can typically be used by spouses as well. (Spousal RRSP)
Group RRSPs are easy and inexpensive to set up and administer and can instantly make your group benefits plan more competitive.