Group Retirement Plans in Ontario
Help your team save for the future and reward them for staying. We connect Ontario employers with licensed advisors who set up group RRSPs, DPSPs and group TFSAs.
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Quick answer
What is a group retirement plan for Ontario employers?
A group retirement plan lets employees save for retirement through payroll deductions, often with an employer matching contribution. Common options are a group RRSP, a deferred profit sharing plan (DPSP) and a group TFSA, and many employers combine them. The plan design depends on budget and goals, and a licensed advisor can help set one up.
Group Retirement Plans for Ontario Employers
A group retirement plan helps employees save through payroll, often with an employer contribution. It is one of the most valued benefits for mid-career employees and a strong retention tool, since matching contributions reward people for staying.
Plans are flexible. You can start with a simple group RRSP and add employer matching through a DPSP as the business grows.
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What are the most common group retirement plans?
Most small and mid-sized employers use one or a combination of these.
Group RRSP
Employees contribute through payroll deduction, which can reduce the tax withheld from each pay. Employer contributions to a group RRSP are taxable income to the employee.
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Deferred profit sharing plan (DPSP)
Only the employer contributes. Contributions are not taxable to the employee until withdrawn, and you can require employees to stay a period of time, up to two years, before contributions vest.
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Group TFSA
Employees save after tax dollars through payroll, and growth and withdrawals are tax free. It suits shorter term goals and lower income employees.
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How should an employer design a matching program?
A simple matching formula encourages participation.
Set the match
For example, match a percentage of what employees contribute, up to a cap.
Choose the vehicle
Matching through a DPSP keeps employer contributions tax deferred and can include vesting.
Keep it simple
A small menu of diversified funds and good education lifts participation.
How do a group RRSP, DPSP and group TFSA compare?
Each plan type handles contributions and tax differently, so many employers combine two of them.
| Feature | Group RRSP | DPSP | Group TFSA |
|---|---|---|---|
| Who contributes | Employee and employer | Employer only | Employee and employer |
| Tax on contributions | Can reduce tax withheld from pay | Not taxable to employee until withdrawn | Made with after tax dollars |
| Tax on withdrawals | Taxable | Taxable | Tax free |
| Vesting | Generally immediate | Up to two years of service | Generally immediate |
| Best suited to | Core retirement savings | Employer matching and retention | Shorter term goals |
Group Retirement Plan FAQs
What is the difference between a group RRSP and a DPSP?
In a group RRSP, employees and employers can contribute, and employer contributions are taxable income. In a DPSP, only the employer contributes and contributions are tax deferred until withdrawal.
Do group retirement plans cost the employer anything?
The main cost is any matching contribution you choose to make. Administration is usually paid through fund management fees, which your advisor can explain.
Can small businesses offer a group RRSP?
Yes. Group RRSPs are available to small businesses, sometimes with just a few participants.
Are employers required to offer a group retirement plan in Ontario?
No. Ontario employers are not required to offer a group RRSP, DPSP or group TFSA. Employers must still make their required Canada Pension Plan contributions for eligible employees. A voluntary group plan is offered as a benefit to help attract and keep staff.
Can employees contribute to a DPSP?
No. Under Canada Revenue Agency rules, only the employer can contribute to a DPSP, apart from transfers from another DPSP. That is why many employers pair a DPSP with a group RRSP, where employees contribute and the employer matches through the DPSP.
Can business owners join their own company's DPSP?
Usually not. CRA registration conditions exclude people related to the employer and specified shareholders, and people related to them, from being DPSP beneficiaries. Owners often use a group RRSP instead, so a licensed advisor can suggest a structure that works for both owners and staff.
What is vesting in a group retirement plan?
Vesting is the point at which employer contributions belong to the employee. In a DPSP, the employer can require a period of service before contributions vest, but CRA rules say allocations must vest after no more than two years. Employer contributions to a group RRSP are generally the employee's once they are deposited.
How is a group TFSA different from a group RRSP?
Contributions to a group RRSP can reduce the tax withheld from each pay, and withdrawals are taxable. Group TFSA contributions come from after tax dollars, but growth and withdrawals are tax free. A group TFSA often suits shorter term goals or employees in lower tax brackets.
How long does it take to set up a group retirement plan?
Timing depends on the plan design, the provider and how quickly employee information and payroll details are gathered. The steps usually include choosing plan types and a matching formula, selecting a provider, and enrolling employees. A licensed advisor can manage the process and coordinate the launch with your payroll.
What happens when you work with a benefits advisor?
A licensed advisor handles the details so you can make a clear decision.
1Discovery call
Share who needs coverage, what matters most and your budget. For businesses, bring your current plan and renewal if you have one.
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2Plan design
Your advisor recommends coverage levels and cost sharing that fit your needs, and explains the trade offs in plain language.
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3Compare insurers
Your advisor gathers quotes from multiple insurers and compares price, coverage and service side by side.
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4Enrol and support
Once you choose, your advisor handles the application and enrolment, and stays available for claims questions and renewals.
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