How to switch group RRSP providers: A step-by-step guide

Not feeling 100% aligned with your current Group Registered Retirement Savings Plan (or GRRSP) provider?

Maybe you’re unhappy with the service levels, or the plan didn’t gain traction with your team. Perhaps you’ve noticed poor communication or have been troubled by high costs. There’s a lot of value for employers in offering a GRRSP program, but if your provider isn’t delivering the kind of product or service you expect, it can significantly detract from those advantages. And it might even be more harmful than helpful.

All of this misalignment means it’s time to consider switching GRRSP providers.

How to switch your GRRSP provider

Switching GRRSP providers might seem like a big undertaking, but it’s relatively straightforward once you decide on a new provider. In fact, many of the employers who transfer their GRRSP programs to Wealthsimple for Business tell us the process was much easier than they anticipated.

One of the reasons for this is because your new provider (e.g. us) should handle most of the workload in each step. That being said, it’s good to know what’s involved in the process so you can set expectations, follow the progress, and keep your team informed.

1. Decide on a new provider and a plan 

Take some time to determine who will offer your new financial wellness benefit and what kind of plan it will be. Look for resources that can help you identify important criteria and know what questions to ask to get the answers you need from providers. If you’re stuck between a few different options, consider polling employees to see which provider they would prefer – it could go a long way to ensuring high enrollment when you launch the new program. We wrote a helpful article on this.

2. Send a termination letter to your current provider

Once you’ve chosen a new provider and agreed upon the details of your new plan, you’ll need to inform your current provider in writing. This step has to happen to set up your new plan and make the switch official. A simple email will do the trick. Your new provider should offer you a template, ask for one if it is not provided.

3. Connect your former plan rep to the new plan rep

Your old provider will need to hand off all plan information, including participant information, account balances, and any documentation on file. Introduce your new provider’s representative to the rep at your previous provider (a simple email works well) and enclose the letter of termination from step two. This will start this process. Your new provider should take over all communication and management of the Group RRSP transfer from this point onward. 

4. Send out communications to inform employees

Internal communication is an essential step in the process. It can build excitement within your organization to share what’s happening and how employees will benefit from the new plan. It can also help pique the interest of staff who forgot or chose not to participate in the old plan, giving them the opportunity to reconsider enrolling.

Remember to reassure participants that any existing contributions and balances will be safeguarded through the transfer, and ensure they all receive proper notice of the changes to come. Notifying participants is mandatory but also considerate, since your employees aren’t the ones deciding on and overseeing the transfer of their funds. Being as transparent as possible will go a long way to making people feel confident in the move and reducing the amount of questions your team has to handle.

5. Set up your new plan(s) and add employees

While your previous and new provider handle the nuts and bolts of the GRRSP transfer (which can take anywhere from four to six weeks), you can get started with setting up your new plan and getting employees in the system. As an employer, you should be able to access everything you need to input your staff either individually or with a bulk upload of employee information. Ideally, your new plan is easy for you to manage independently through the provider’s platform (with guidance from their team) so you can create and customize the plan that’s right for your employees. However, many providers require you to sit down with a rep and choose from long lists of potential investment funds and other details before setting up your plan within a platform.

Wealthsimple’s approach is focused on making this setup as easy as possible. In our platform, you can create your plan directly from your own dashboard. You’ll be able to choose matching or non-matching contributions, staff eligibility (for instance, immediately upon hiring or after a three-month probationary period), and available funds. (P.S., Wealthsimple employers can now add Crypto options!) Once your plan or plans are built, you can upload and assign employees.

6. Share the good news to help attract new talent

You initially offered this benefit to help attract new talent and retain top-performing employees by showing them you want to invest in their futures and support their financial goals. Pensions matter to Canadians. A recent report from Statistics Canada shows membership in pension plans grew by more than 215,800 people from 2021 to 2022.

When you make changes that help make your organization more attractive to new hires, you’re allowed to shout about it! Make sure your website and recruitment assets are updated with new information and share some of the best features of the new plan. 

What you need to know about transfer fees

Many providers charge fees for transferring funds out of their management, a deterrent for taking your business elsewhere (tip: Wealthsimple doesn’t do this – financial freedom is kind of our thing).

While there’s not much you can do to avoid these fees, it might be helpful to know that some providers cover some or all transfer fees when you move to them. For example, Wealthsimple will reimburse transfer fees from your previous provider. Chat with our team for more details.

How easy is it to switch? 

Switching GRRSP providers can feel like a huge undertaking, preventing some employers from making a change even when they’re unhappy. However, if you choose a new provider ready to come in and make the transition easier on you and your team, the path to a better fit will be smoother than you think.

Your new GRRSP provider is waiting to make this a great experience for you, so lean on their expertise in making the switch. This way, your employees will have access to relevant information about ​ our platform, their Group RRSP, and personal finance and investing right from the get-go.

In conclusion

Switching GRRSP providers might feel like the last thing you want to tackle when your team already feels at capacity. This can make it tempting to put off the decision to change providers until some distant day.

We believe that doing the heavy lifting to move away from a poorly fitting benefit plan is always worth the effort in the long run. The value of a plan and provider who can support you and your employees will always be worth the extra work to make it happen. Even better, a new provider might surprise you with how much they can alleviate that lift and make it easy for you to switch!