RRSP matching program

Thinking about these five considerations can make planning a RRSP Matching Program a little bit simpler.

Canadians have a lot on their minds. The lingering pandemic, continued economic instability, climate change, financial planning for the future—there’s a lot to keep the average person up at night. “When will I be able to retire?”, “Will I have enough money to live comfortably?”, “Am I saving enough for retirement right now?”, “Can I afford to save more?”.

This collective unease is showing up in national surveys. The Healthcare of Ontario Pension Plan (HOOPP) and Abacus Data report that 63% of Canadians say they did not set aside anything for retirement in the past year. And many (48%) report that they worry more about not having enough money to retire than they do about their physical and mental health, debt load, and job security. 

The Canadian Institute of Actuaries have similar findings, including insight that more than half of Canadians do not have a financial plan for retirement. 

 As an employer, you can help untangle the real retirement concerns of your employees and boost their financial future by setting up a group retirement savings plan (GRSP). These programs make it easier and more cost-effective for individuals to sock away funds for later while realizing present-day tax benefits.

 And you can take that benefit one step further by offering an RRSP matching program. These types of initiatives, typically administered by an insurance company, bank or modern online provider like Wealthsimple, are increasingly becoming a valuable part of competitive compensation packages that attract and retain high-quality talent. 

 Not sure if you’re prepared to roll out a GRSP matching program for your employees? This article is for you. We’ll break down how a GRSP with RRSP matching works, what makes it worthwhile for employers, and what to consider when creating a program tailored for your company’s needs. 

What is employer RRSP matching?

First, it’s important to understand how a basic GRSP works: it enables employees to direct a portion of every pay cheque into a registered account, usually with pre-selected investments. These group RRSP accounts offer the same features and parameters as individual RRSP accounts, which means employees can:

Once the money is in the GRSP, it’s tax-sheltered in the same way RRSP contributions are. 

How does RRSP matching work? 

Some employers also choose to layer on a matching program that parallels contributions made by employees.These employer RRSP matching contributions are usually between 3% and 5% of an employee’s pre-tax salary. This percentage will vary depending on the employer size, industry, and other compensation factors, but over time, even small matching programs can really add up for employees.