A successful Group Retirement Savings Plan (GRSP) is an employer-sponsored benefit that will attract employees to your company and help retain them for the long term. However, finding the right group savings solution to meet the needs of your company can be a challenge. As the plan sponsor, you want a program that is leading-edge in design, i.e. investment choices, flexibility, online systems and member education. And more importantly, you want a plan that fulfills the basic objective of any group savings plan – income for your employees at retirement. Industry surveys report that employees place a great deal of importance on their group benefit programs, and a retirement savings plan of any kind is high on their list of priorities. However, to fully appreciate their retirement program, employees must understand the need for saving, the effect of compound interest, dollar cost averaging and the different investment choices. Without a true understanding of the group savings program and its impact on their retirement years, there is a tendency to regard the GRSP as an employer-funded “piggy bank” to be used for vacations, day-to-day expenses, vacations, or even small luxury items. Plan Choices Finding the right savings program to suit your company can be a challenge. Sometimes, one plan alone may not be the solution and a combination of plans may be needed. But how do you choose between a:
- Defined contribution registered pension plan (RPP)
- A Group registered retirement savings plan (GRSP)
- A non-registered savings plan (NRSP), or
- A deferred profit sharing plan (DPSP)
A popular solution today is the Deferred Profit Sharing Plan which may be implemented as a stand-alone program, or used in conjunction with a GRSP for employee contributions.
