DC RPP SPP PRPP About HALIFAX On Trackessentiasolution.com/docs/offer/50-399A_On_track_with_the_right...3 4 5 Overview of Group Retirement Savings Solutions for Plan Sponsors Founded

345

Overview

of Group Retirement

Savings Solutions

for Plan Sponsors

Founded in 1892, Industrial Alliance Insurance and Financial Services Inc. has offered Cana-dians insurance and investment products specifi cally tailored to meet their needs.

Industrial Alliance employs more than 4,300 people,has over three million clients and is the fourth largestlife and health insurancecompany in Canada.

Our fi nancial management philosophy focuses on the long-term success of our clients and partners.

GROUP SAVINGS AND RETIREMENT

Current social and economic changes make these plans a benefi cial tool. Flexible and effective solutions are favoured to meet plan sponsors’ needs. Capital accumulation plans (CAPs)* continue to be the preferred choice among private employers. These plans are more fl exible in order to better adapt to the new realities of the labour market, especially with regard to workforce mobility.

Take a look at the main characteristics of our group retirement savings plans so you can quickly get on track with the plan that best suits your specifi c needs.

* According to the Joint Forum of Financial Market Regulators, a capital accumulation plan (CAP) is a savings plan that permits the members of the CAP to make investmentdecisions among two or more options offered within the plan. A CAP may be established by an employer, trade union, association or any combination of these entities for the benefi t of its employees or members.

DC RPPSPPPRPPGROUP RRSP

DPSPGROUP TFSA

1. Will the employer be contributing?Yes

No

2. Does the employer want the money contributed available only upon retirement?

Yes

No

3. Is the employer willing to manage a pension committee? (in Manitoba and Quebec)

Yes

No

4. Will the plan increase payroll taxes when the employer contributes?

Yes

No

5. Can the employer contribute only when the company is profi table?

Yes

No

6. Is the employer’s portion immediately vested? Yes*

No

7. Does the employer want to choose the investment options available in the plan?

Yes

No

8. Is the employer willing to make contributionsat least once a month?

Yes

No

* Except for employees working in Alberta, British Columbia, New Brunswick, Newfoundland and Labrador, Nova Scotia and Saskatchewan

Questions To Ask Yourself

› Our experienced team of group retirement savings advisors can help you evaluate your needs and recommend optimal solutions.

› Our full range of professional services and products includes retirement savings plans, pension products, actuarial services and a complete investment fund line-up with many well-known investment managers.

› Our rigorous and continual investment funds review process assures you that we constantly keep track of our fund managers in order to offer you top quality investment options.

› Our commitment to maintaining a high level of customized service ensures that your needs are our top priority.

› We are constantly developing new products and solutions to ensure that the services we offer continue to satisfy your needs.

› Signifi cant investments made to maintain leading-edge administra-tion systems guarantee that we remain competitive at all levels.

GoodReasonsTo ChooseIndustrialAlliance

Group retirement savings plans

represent an important part of an

employer’s overall compensation

program and show a commitment

to helping employees reach their

retirement goals.

The elephant, a symbol of our 120 years of strength and solidity.

HALIFAX

Telephone: 902 422-6479Toll-free: 1 800 255-2116Email: [email protected]

QUEBEC CITY


MONTREAL

Telephone: 514 499-6600 Toll-free: 1 800 697-9767Email: [email protected]

TORONTO


CALGARY

Telephone: 403 218-3248 Toll-free: 1 888 532-1505, ext. 248Email: [email protected]

VANCOUVER

Telephone: 604 689-0388, ext. 223 Toll-free: 1 800 557-2515Email: [email protected]

www.inalco.com

F50-

399A

A partner you can trust.

On Trackwith the Right Plan!Industrial Alliance

About

CAP Source Retirement Income Options

DC RPP LIF or RLIF − LRIF − Life annuity – RRIF (for voluntary contributions)

SPP LIF − Life annuity – RRIF (for certain types of contributions only)

PRPP LIF − Life annuity

Group RRSP RRIF − Partial or total cash withdrawal (less applicable income tax) – Life annuity − Annuity certain (payable to age 90)

Locked-in RRSP LIF − LRIF − Life annuity

DPSP RRIF − Partial or total cash withdrawal (less applicable income tax) −Life annuity − Annuity certain

LIRA LIF − LRIF − Life annuity

RLSP RLIF − Life annuity

TFSA Partial or total cash withdrawal − Life annuity − Annuity certain

Accumulation Disbursement

CAP Capital Accumulation Plan

CRA Canada Revenue Agency

DC RPP Defi ned Contribution Registered Pension Plan

DPSP Deferred Profi t Sharing Plan

HBP Home Buyers’ Plan *

LIF Life Income Fund

LIRA Locked-In Retirement Account

LLP Lifelong Learning Plan *

LRIF Locked-in Retirement Income Fund

PRPP Pooled Registered Pension Plan

RLIF Restricted Life Income Fund

RRIF Registered Retirement Income Fund

RLSP Restricted Locked-in Savings Plan

RRSP Registered Retirement Savings Plan

SPP Simplifi ed Pension Plan

TFSA Tax-Free Savings Account *

YMPE Year’s Maximum Pensionable Earnings

Terminology

Retirement Income Options Per CAP Source

Refer to Your Retirement Options Guide for an explanation of each retire-ment income option, as well as questions to consider before choosing one.

DC RPPs, DPSPs, Group RRSPs and TFSAs, generally called CAPs or savings plans, become disbursement plans at retirement. In other words, accumulated amounts are used to provide income.

* With lump sum withdrawals

Deferral of tax on contributions and non-taxation of investment income are most often the main advan-tages of registered plans, which is why they must all comply with the tax law set out in the Income Tax Act and regulated by CRA.

On track with the right plan!Overview of Common CAP Plans

Regulated by CRA Regulated by CRA Regulated by CRA Regulated by CRA Regulated by CRA Regulated by CRA Regulated by CRA Regulated by CRA Regulated by CRA Regulated by CRA Regulated by CRA Regulated by CRA


Regu

late

d by

CRA

Regu

late

d by

CRA

Regu

late

d by

CRA

Regu

late

d by

CRA

Regu

late

d by

CRA

Regu

late

d by

CRA

Regu

late

d by

CRA

Regulated by CRA

Regulated by CRA

Regulated by CRA

Regulated by CRA

Regulated by CRA

Regulated by CRA

Regulated by CRA

* PRPP is subject to the Pooled Registered Pension Plans Act.

According to CRA, a pension plan must be a defi nite arrangement established as a continuing contract by an employer or group of employers or by a union with employers to provide a lifetime income to retired employees for the service they have provided in order to qualify for registration under the Income Tax Act. For example, a group RRSP does not qualify as a pension plan.

A pension plan falls either under federal or provincial jurisdiction, depending on the employer’s activities. Most employment in Canada is provincially regulated. Federally regulated businesses usually fall under the banking, telecommunications and interprovincial transportation industries.

Other CAP Plan Descriptions

Group RRSP

A group RRSP is a retirement savings instrument for a group of employees, members of a union or members ofan association and is issued by a fi nancial institution authorized by CRA. Employer contributions are considered salary increases. Contri butions by membersare income tax deductible and are deducted directly from their pay, allowing for at-source exemption and making saving less onerous. Contributions andthe returns they generate therefore grow tax-free. The group plan may also allow members to contribute to their spouses’ RRSPs to split their income.

DPSP

A Deferred Profi t Sharing Plan is an employer-sponsored plan registered with CRA. Through this plan, an employer shares the profi t generated by the business with all its employees or a group of employees. Such a plan is quite fl exible, because it is not subject to any pension plan acts and employers are not required to make any minimum contributions. Generally, if the business does not turn a profi t, no contributions are made to the plan. Employers may calculate their contributions based on profi ts or a percentage of employee salaries. Employers may also require employees to contribute to a group RRSP and commit to make an equivalent contribution to a DPSP. Only an employer can contribute to a DPSP.

Group TFSA

An employer may offer all its Canadian resident employees or a group of them, age 18 and over, the possibility to par tici-pate in a TFSA. Employer contributionsare considered salary increases. Employee contributions are not income tax deductible but grow tax free. Withdrawals are not taxable and result in contribution room that is added to the accumulated contribution room in the following year. An employer may not contribute directly to the TFSA of an employee, but mayact as an agent and deduct an amount from the employee’s pay to depositin his/her TFSA.

Group RRSP, DPSP and Group TFSA plans are subject to the same rules across Canada. These rules are set by the Income Tax Act and regulated by the CRA.

DC RPP Plans (Traditional Pension Plans)

Other CAP Plans

JurisdictionFederalBritish ColumbiaAlbertaSaskatchewanManitobaOntarioQuebecNew BrunswickNova ScotiaPrince Edward Island

Newfoundland and Labrador

LegislationPension Benefi ts Standards Act, 1985

Pension Benefi ts Standards Act

Employment Pension Plans Act

The Pension Benefi ts Act, 1992

The Pension Benefi ts Act

Pension Benefi ts ActSupplemental Pension Plans Act

Pension Benefi ts ActPension Benefi ts ActPension Benefi ts Act (not yet proclaimedinto force)

PensionBenefi ts Act,1997

Regulatory Authority

Offi ce of the Superintendent of Financial Institutions Canada

Financial Institutions Commission

Offi ce of the Alberta Superintendent of Pensions

Saskatchewan Financial Services Commission

Offi ce of the Superintendent – Pension Commission

Financial Services Commission of Ontario

Régie des rentes du Québec

Offi ce of the Superintendent of Pensions


Department of Environment, Labour and Justice

Superintendent of Pensions

Website addresswww.osfi -bsif.gc.cawww.fi c.gov.bc.cawww.fi nance.gov.ab.cawww.sfsc.gov.sk.cawww.gov.mb.cawww.fsco.gov.on.cawww.rrq.gouv.qc.cawww.gnb.cawww.gov.ns.cawww.gov.pe.cawww.gov.nl.ca

Other related plans

PRPP*, locked-in RSP, RLSP, LIF, RLIF

locked-in RRSP, LIFLIRA, LIFLIRA, prescribed RRIFSPP, LIRA, LIFLIRA, LIF, LRIFSPP, LIRA, LIFLIRA, LIFLIRA, LIFLIRA, LIF, LRIF

DC RPP Plan Descriptions

DC RPP

The purpose of this plan is to provide income for retirement. Employers and, most of the time, employees make defi ned contributions based on a percen tage of the members’ salaries. The amount that members have at retirement will consist of all the contributions made on their behalf and the returns generated by their investments. As a general rule, the money accumulated in a DC RPP (with the exception of voluntary contribu-tions) may not be withdrawn before partici pation in the plan has terminated.

SPP

The Simplifi ed Pension Plan is designedto reduce the administration burden on employers. An SPP is a pension plan where the employer, and usually the employee, makes contributions to an account on the member’s behalf.The SPP is administered by a fi nancial institution, thereby releasing the employer from numerous administrative tasks.This type of plan allows the employeesof different employers to take part. SPPsare available under Manitoba (Simplifi ed Money Purchase Pension Plan) and Quebec jurisdictions. They were originally created to meet the needsof small and medium-sized businesses.

PRPP

The federal government introduced the Pooled Registered Pension Plan following discussions with provincial counterpartsto ensure the ongoing strength of the country’s retirement income system. According to the government, the PRPP’s goal is to provide a new, accessible, large-scale and less expensive pension option to small and medium-sized businesses, their employees and the self-employed. The PRPP is also administered by a fi nancial insti tution, thereby releasing the employer from numerous administrative tasks. PRPPs are only available to federally regulated businesses.

Furthermore, pension plans are subject to different types of legislation, such as federal and provincial pension acts and their regulations. In general, tax law sets contribution limits, while pension acts and their regulations set minimum requirements.

3 4 5

Overview

of Group Retirement

Savings Solutions

for Plan Sponsors








DC RPP SPP PRPPGROUP RRSP

DPSPGROUP TFSA


No


Yes

No


Yes

No


Yes

No


Yes

No

6. Is the employer’s portion immediately vested? Yes *

No


Yes

No


Yes

No















retirement goals.


HALIFAX


QUEBEC CITY


MONTREAL


TORONTO


CALGARY


VANCOUVER


www.inalco.com

F50-399A


On Trackwith the Right Plan! Industrial Alliance

About

CAP SourceRetirement Income Options

DC RPPLIF or RLIF − LRIF − Life annuity – RRIF (for voluntary contributions)

SPPLIF − Life annuity – RRIF (for certain types of contributions only)

PRPPLIF − Life annuity

Group RRSPRRIF − Partial or total cash withdrawal (less applicable income tax) – Life annuity − Annuity certain (payable to age 90)

Locked-in RRSPLIF − LRIF − Life annuity

DPSPRRIF − Partial or total cash withdrawal (less applicable income tax) −Life annuity − Annuity certain

LIRALIF − LRIF − Life annuity

RLSPRLIF − Life annuity

TFSAPartial or total cash withdrawal − Life annuity − Annuity certain

AccumulationDisbursement

CAPCapital Accumulation Plan

CRACanada Revenue Agency

DC RPPDefi ned Contribution Registered Pension Plan

DPSPDeferred Profi t Sharing Plan

HBPHome Buyers’ Plan*

LIFLife Income Fund

LIRALocked-In Retirement Account

LLPLifelong Learning Plan*

LRIFLocked-in Retirement Income Fund

PRPPPooled Registered Pension Plan

RLIFRestricted Life Income Fund

RRIFRegistered Retirement Income Fund

RLSPRestricted Locked-in Savings Plan

RRSPRegistered Retirement Savings Plan

SPPSimplifi ed Pension Plan

TFSATax-Free Savings Account*

YMPEYear’s Maximum Pensionable Earnings

Terminology









Regulated by CRA

Regulated by CRA

Regulated by CRA

Regulated by CRA

Regulated by CRA

Regulated by CRA

Regulated by CRA Re

gula

ted

by C

RA

Re

gula

ted

by C

RA

Re

gula

ted

by C

RA

Re

gula

ted

by C

RA

Re

gula

ted

by C

RA

Re

gula

ted

by C

RA

Re

gula

ted

by C

RA





Group RRSP


DPSP


Group TFSA




Other CAP Plans

Jurisdiction Federal British Columbia Alberta Saskatchewan Manitoba Ontario Quebec New Brunswick Nova ScotiaPrince Edward Island







Pension Benefi ts Act Supplemental Pension Plans Act

Pension Benefi ts Act Pension Benefi ts Act Pension Benefi ts Act (not yet proclaimedinto force)














Website address www.osfi -bsif.gc.ca www.fi c.gov.bc.ca www.fi nance.gov.ab.ca www.sfsc.gov.sk.ca www.gov.mb.ca www.fsco.gov.on.ca www.rrq.gouv.qc.ca www.gnb.ca www.gov.ns.ca www.gov.pe.ca www.gov.nl.ca

Other related plans


locked-in RRSP, LIF LIRA, LIF LIRA, prescribed RRIF SPP, LIRA, LIF LIRA, LIF, LRIF SPP, LIRA, LIF LIRA, LIF LIRA, LIF LIRA, LIF, LRIF


DC RPP


SPP


PRPP



345

Overview

of Group Retirement

Savings Solutions

for Plan Sponsors









DPSPGROUP TFSA


No


Yes

No


Yes

No


Yes

No


Yes

No


No


Yes

No


Yes

No















retirement goals.


HALIFAX


QUEBEC CITY


MONTREAL


TORONTO


CALGARY


VANCOUVER


www.inalco.com

F50-

399A



About





























Terminology









Regu

late

d by

CRA

Regu

late

d by

CRA

Regu

late

d by

CRA

Regu

late

d by

CRA

Regu

late

d by

CRA

Regu

late

d by

CRA

Regu

late

d by

CRA

Regulated by CRA

Regulated by CRA

Regulated by CRA

Regulated by CRA

Regulated by CRA

Regulated by CRA

Regulated by CRA





Group RRSP


DPSP


Group TFSA




Other CAP Plans
























Other related plans




DC RPP


SPP


PRPP



Overview

of Group Retirement

Savings Solutions

for Plan Sponsors

Founded in 1892, Industrial Alliance Insurance and Financial Services Inc. has offered Cana-dians insurance and investment products specifically tailored to meet their needs.

Industrial Alliance employs more than 4,300 people, has over three million clients and is the fourth largest life and health insurance company in Canada.

Our financial management philosophy focuses on the long-term success of our clients and partners.


Current social and economic changes make these plans a beneficial tool. Flexible and effective solutions are favoured to meet plan sponsors’ needs. Capital accumulation plans (CAPs)* continue to be the preferred choice among private employers. These plans are more flexible in order to better adapt to the new realities of the labour market, especially with regard to workforce mobility.

Take a look at the main characteristics of our group retirement savings plans so you can quickly get on track with the plan that best suits your specific needs.

* According to the Joint Forum of Financial Market Regulators, a capital accumulation plan (CAP) is a savings plan that permits the members of the CAP to make investmentdecisions among two or more options offered within the plan. A CAP may be established by an employer, trade union, association or any combination of these entities for the benefit of its employees or members.

DC RPP SPP PRPPGROUP RRSP

DPSPGROUP TFSA


No


Yes

No


Yes

No


Yes

No

5. Can the employer contribute only when the company is profitable?

Yes

No

6. Is the employer’s portion immediately vested? Yes *

No


Yes

No

8. Is the employer willing to make contributions at least once a month?

Yes

No








› Significant investments made to maintain leading-edge administra-tion systems guarantee that we remain competitive at all levels.

Good Reasons To Choose Industrial Alliance






retirement goals.


HALIFAX


QUEBEC CITY


MONTREAL


TORONTO


CALGARY


VANCOUVER


www.inalco.com

F50-399A(13-04)


On Trackwith the Right Plan! Industrial Alliance

About

CAP SourceRetirement Income Options

DC RPPLIF or RLIF − LRIF − Life annuity – RRIF (for voluntary contributions)

SPPLIF − Life annuity – RRIF (for certain types of contributions only)

PRPPLIF − Life annuity

Group RRSPRRIF − Partial or total cash withdrawal (less applicable income tax) – Life annuity − Annuity certain (payable to age 90)

Locked-in RRSPLIF − LRIF − Life annuity

DPSPRRIF − Partial or total cash withdrawal (less applicable income tax) − Life annuity − Annuity certain

LIRALIF − LRIF − Life annuity

RLSPRLIF − Life annuity

TFSAPartial or total cash withdrawal − Life annuity − Annuity certain

AccumulationDisbursement

CAPCapital Accumulation Plan

CRACanada Revenue Agency

DC RPPDefined Contribution Registered Pension Plan

DPSPDeferred Profit Sharing Plan

HBPHome Buyers’ Plan*

LIFLife Income Fund

LIRALocked-In Retirement Account

LLPLifelong Learning Plan*

LRIFLocked-in Retirement Income Fund

PRPPPooled Registered Pension Plan

RLIFRestricted Life Income Fund

RRIFRegistered Retirement Income Fund

RLSPRestricted Locked-in Savings Plan

RRSPRegistered Retirement Savings Plan

SPPSimplified Pension Plan

TFSATax-Free Savings Account*

YMPEYear’s Maximum Pensionable Earnings

Terminology









Regulated by CRA

Regulated by CRA

Regulated by CRA

Regulated by CRA

Regulated by CRA

Regulated by CRA

Regulated by CRA Re

gula

ted

by C

RA

Re

gula

ted

by C

RA

Re

gula

ted

by C

RA

Re

gula

ted

by C

RA

Re

gula

ted

by C

RA

Re

gula

ted

by C

RA

Re

gula

ted

by C

RA


According to CRA, a pension plan must be a definite arrangement established as a continuing contract by an employer or group of employers or by a union with employers to provide a lifetime income to retired employees for the service they have provided in order to qualify for registration under the Income Tax Act. For example, a group RRSP does not qualify as a pension plan.



Group RRSP

A group RRSP is a retirement savings instrument for a group of employees, members of a union or members of an association and is issued by a financial institution authorized by CRA. Employer contributions are considered salary increases. Contri butions by members are income tax deductible and are deducted directly from their pay, allowing for at-source exemption and making saving less onerous. Contributions and the returns they generate therefore grow tax-free. The group plan may also allow members to contribute to their spouses’ RRSPs to split their income.

DPSP

A Deferred Profit Sharing Plan is an employer-sponsored plan registered with CRA. Through this plan, an employer shares the profit generated by the business with all its employees or a group of employees. Such a plan is quite flexible, because it is not subject to any pension plan acts and employers are not required to make any minimum contributions. Generally, if the business does not turn a profit, no contributions are made to the plan. Employers may calculate their contributions based on profits or a percentage of employee salaries. Employers may also require employees to contribute to a group RRSP and commit to make an equivalent contribution to a DPSP. Only an employer can contribute to a DPSP.

Group TFSA

An employer may offer all its Canadian resident employees or a group of them, age 18 and over, the possibility to par tici-pate in a TFSA. Employer contributions are considered salary increases. Employee contributions are not income tax deductible but grow tax free. Withdrawals are not taxable and result in contribution room that is added to the accumulated contribution room in the following year. An employer may not contribute directly to the TFSA of an employee, but may act as an agent and deduct an amount from the employee’s pay to deposit in his/her TFSA.



Other CAP Plans

Jurisdiction Federal British Columbia Alberta Saskatchewan Manitoba Ontario Quebec New Brunswick Nova ScotiaPrince Edward Island


LegislationPension Benefits Standards Act, 1985

Pension Benefits Standards Act


The Pension Benefits Act, 1992

The Pension Benefits Act

Pension Benefits Act Supplemental Pension Plans Act

Pension Benefits Act Pension Benefits Act Pension Benefits Act (not yet proclaimed into force)

Pension Benefits Act, 1997


Office of the Superintendent of Financial Institutions Canada


Office of the Alberta Superintendent of Pensions


Office of the Superintendent – Pension Commission



Office of the Superintendent of Pensions

Office of the Superintendent of Pensions



Website address www.osfi-bsif.gc.ca www.fic.gov.bc.ca www.finance.gov.ab.ca www.sfsc.gov.sk.ca www.gov.mb.ca www.fsco.gov.on.ca www.rrq.gouv.qc.ca www.gnb.ca www.gov.ns.ca www.gov.pe.ca www.gov.nl.ca

Other related plans


locked-in RRSP, LIF LIRA, LIF LIRA, prescribed RRIF SPP, LIRA, LIF LIRA, LIF, LRIF SPP, LIRA, LIF LIRA, LIF LIRA, LIF LIRA, LIF, LRIF


DC RPP

The purpose of this plan is to provide income for retirement. Employers and, most of the time, employees make defined contributions based on a percen tage of the members’ salaries. The amount that members have at retirement will consist of all the contributions made on their behalf and the returns generated by their investments. As a general rule, the money accumulated in a DC RPP (with the exception of voluntary contribu-tions) may not be withdrawn before partici pation in the plan has terminated.

SPP

The Simplified Pension Plan is designed to reduce the administration burden on employers. An SPP is a pension plan where the employer, and usually the employee, makes contributions to an account on the member’s behalf. The SPP is administered by a financial institution, thereby releasing the employer from numerous administrative tasks. This type of plan allows the employees of different employers to take part. SPPs are available under Manitoba (Simplified Money Purchase Pension Plan) and Quebec jurisdictions. They were originally created to meet the needs of small and medium-sized businesses.

PRPP

The federal government introduced the Pooled Registered Pension Plan following discussions with provincial counterparts to ensure the ongoing strength of the country’s retirement income system. According to the government, the PRPP’s goal is to provide a new, accessible, large-scale and less expensive pension option to small and medium-sized businesses, their employees and the self-employed. The PRPP is also administered by a financial insti tution, thereby releasing the employer from numerous administrative tasks. PRPPs are only available to federally regulated businesses.


8

11

7

10

6

9

DC RPP SPP PRPP GROUPRRSP DPSP GROUP

TFSA

Minimum rules

Minimum plan eligibility required by law

Eligibility of employees at the discretion of the employer or sponsor

Employer may offer the plan to all employees or a group of employees

Minimum contributions required by the employer

Employer contributions subject to payroll tax

Employee contributions may be temporarily suspended Possible N/A Possible

Automatic enrolment with a right to opt out within 60 days of enrolment

Contribution limit

18% of income earned in the current year, up to the limit set by CRA

18% of income earned the previous year, up to the limit set by CRA

18% of income earned in the current year, up to 50% of the limit for a DC RPP

$5,500 per year as of 2013, $5,000 from 2009 to 2012, cumulative and indexed and rounded to the nearest $500 annually by CRA

Choice of investment instructions

By the employer

By the plan administrator or sponsor

By the members

Default instructions must be determinedby the administrator

Vesting of employer contributions

Immediate 1 Possible N/A

Based on the minimum rule under law, but the plan may be more generous 2

Locking-in of contributions

Employer contributions

Employee regular contributions Possible N/A

Employee voluntary contributions N/A N/A

Withdrawal of contributions permittedduring employment before age 55

Employer contributions Possible Possible

Employee regular contributions (employer may restrict withdrawals for an RRSP)

Possible N/A

Employee voluntary contributions Possible N/A N/A

Administration of plan

By a pension committee 3, the employer, or a trustee N/A N/A

By Industrial Alliance N/A N/A

In general, members who cease to be active may transfer the value of their account to the following options:

Locked-In Assets

Non Locked-In Assets

Purchase of an annuity froman insurer

Transfer to

• Another pension plan,if permitted by the receiving plan

• LIRA

• LIF

• RRSP

• RRIF

Cash refund, less applicable income tax (withdrawals from TFSAs are not taxable)

Option of keeping the assets in the plan (for a DC RPP and PRPP only, when permitted)

DC RPP SPP PRPP Group RRSP DPSP Group TFSA

Administrator 1/Plan sponsor Administrator: Usually the employer. Pension committee in Manitoba when plan reaches 50 members and 25 in QuebecPlan sponsor: Employer

Administrator: Financial institutionPlan sponsor: Employer

Administrator: Financial institutionPlan sponsor: Employer or self-employed worker

Administrator: N/APlan sponsor: Employer, trade union or association

Administrator: Three trustees, including a third party or trust company such as Industrial Alliance Trust Inc.Plan sponsor: Employer (must be a for profi t corporation)


Eligibility and participation Decided by the employer:• Mandatory or optional• All employees up to age 71or• A group of employees, subject

to minimum eligibility rules

Decided by the employer:• Mandatory or optional• All employees up to age 71or• A group of employees, subject


Decided by the employer:• Mandatory when employer offers

a plan (automatic enrolment with60 days to opt out)

• All employees up to age 71, including part-time employees with more than two years of continuous workplace service

or• A group of employees

Decided by the sponsor:• Mandatory or optional• All employees up to age 71or• A group of employees

Decided by the employer:• Mandatory or optional• All employees up to age 71or• A group of employees, excluding

connected ones (individuals and their families who own at least 10% of the shares of the employer – individuals related or linked to the employer)

Decided by the sponsor:• Optional• All employees age 18 or over

who are Canadian residentsor• A group of employees

Employer contribution • Mandatory• Minimum of 1% of active

members’ payroll

• Mandatory• Minimum of 1% of active

members’ payroll• Additional contributions

may be permitted

• Optional• No required minimum


• Determined in the plan• Based on profi ts or a percentage

of salaries• No required minimum


Employee regular contribution The employer decides whether or not to require employees to make contributions and determines the contribution amount, if any.

The employer decides whether or not to require employees to make contributions and determines the contribution amount, if any.

• Determined in the plan • Member’s option or• According to an agreement

with the employer

Not permitted • Member’s option or• According to an agreement

with the employer

Employee voluntary contribution Permitted or not permitted in the plan, at the employer’s discretion

Permitted N/A Permitted Not permitted Permitted

Contribution limit(subject to CRA limit, indexed annually)

18% of income earned the current year, subject to the limit: $24,270 in 2013

Same limit as for DC RPP Same limit as for RRSP 18% of income earned the previous year, subject to the limit: $23,820 in 2013

18% of income earned the current year, up to 50% of the DC RPP limit: $12,135 in 2013

$5,500 per year as of 2013, $5,000from 2009 to 2012, cumulative, plusany amounts withdrawn froma TFSA in a previous year

Contribution frequency Monthly, usually no later than 30 days after the end of the month

Same as DC RPP Same as DC RPP No requirement At the employer’s discretion No requirement

End of membership while employed Mandatory plan• Not permitted

Optional plan• Determined in the plan,

at the employer’s discretion

Same as DC RPP Not permitted, except for self-employed worker, but must terminate participation in the plan. Contribution rate can be set at 0%.

Member’s option or according to the contract

Employer’s option Member’s option or according to the contract

Tax treatment • Tax deductible contributions for the contributor (employer or employee)

• Contributions and investment income tax-sheltered until payout

• Employer and member contributions must be reported on T4 as pension adjustment

Same as DC RPP • Tax deductible contributions for the contributor (employer or employee)


• Tax receipts issued to members

• Tax deductible contributions for the employee


• Income tax deduction at source• Tax receipts issued to members

• Employer may deduct its contribution from its business income


• Employer contributions must be reported on T4 as pension adjustment

• Contributions are not tax deductible• Investment income grows tax-free• Non-taxable withdrawals• Contributions deducted from salary

after tax• No pension adjustment reporting

required and no tax receipt issued

Payroll tax No No No Yes, the employer contributions increase the employee’s salary (some exceptions apply for structural RRSPs).

No Yes, the employer contributions increase the employee’s salary.

Vesting of employer contributions(when contributions belong to the member)

Immediate (in federal, Manitoba, Ontario and Quebec jurisdictions) or after two years of participation at the latest in other jurisdictions

Immediate Immediate Immediate At the employer’s discretion, after two years of membership at the most

Immediate

Locking-in of contributions(to ensure pension money is used to provide a retirement income)

Contributions Yes No Contributions Yes No Contributions Yes No Not locked in Not locked in Not locked in

Employer � Employer � Employer �

Regular employee contributions �

Regular employee contributions

At the employer’s option Employee �

Voluntary employee contributions �


Unlocking(in general, starting at age 55 in certain jurisdictions)

Various options permitted depending on jurisdiction, for example:• At termination, if the total annual pension is not more than a certain per cent

of the YMPE• After termination, if members have ceased to live in Canada for two years• When a medical condition considerably shortens a member’s life expectancy

For small amounts: when the balance of the locked-in account is lower than 20% of the YMPE in the year employment terminates

N/A N/A N/A

Investment options • Determined by the administrator • Determined by the employer• The administrator must offer at least

three diversifi ed options presenting different degrees of risk and potential returns

• Must provide for various levels of risk and return allowing a cautious person to create an appropriate portfolio

• Maximum of six options

• Determined by the sponsor • Determined by the employer • Determined by the sponsor

Default investment instructions • Suggested by the CAP Guidelines 2

• Determined by the employer• Suggested by the CAP Guidelines 2

• Determined by the employer• Mandatory• Determined by the administrator• Apply to the account of a member

who hasn’t provided any instructions within the prescribed timeframe

• Suggested by the CAP Guidelines 2 • Determined by the sponsor

• Suggested by the CAP Guidelines 2


• Determined by the sponsor

Choice of investments • By the administratoror• By the member

• By the member • By the member • By the member or• According to the contract

• By the employer or• By the member

• By the member

Withdrawal of contributions during employment

Not permitted, but the plan may permit withdrawal of the employee’s voluntary contributions during employment and withdrawal during phased retirement

Locked-in contributions: Prohibited; transfer to a locked-in product permitted starting at age 55

Voluntary contributions: Permitted at all times

Non locked-in employee contributions (in Quebec only):a) Without restriction during

employment: Permittedb) With restrictions during employment:

Transfer permitted for an HBP or LLP and total or partial withdrawal permitted starting at age 55

Not permitted, except for self-employed worker, but participation in the plan must terminate

Permitted at all times, except if contractually restricted by the employer

Permitted or not permitted in the plan, at the employer’s discretion

Permitted at all times

Pros and cons SPONSORPros• Ensures the money is used to provide

an income at retirement• Contributions show commitment

to members• Contributions and administrative

expenses are tax-deductible for the employer

• Contributions are not subject to payroll taxes

• Wide investment choices Cons• Employer contributions required• Annual fees• Regulatory workload

MEMBERPros• Employer contributions required• Contributions and investment income

tax-sheltered until payout • Saving made easy via payroll

deductions• Immediate tax refund • Creditor protectionCon• Locked-in funds

SPONSORPros• Same as DC RPP• Easy administration (fi nancial

institution is the administrator)• Less expensive than DC RPPCons• Contributions required from

the employer• Immediate vesting

MEMBERPros• Same as DC RPP• Immediate vestingCon• Locked-in funds

SPONSORPros• Ensures the money is used to provide

an income at retirement• Easy administration (fi nancial

institution is the administrator)• Less expensive than DC RPP• No contributions required• Contributions are not subject

to payroll taxesCons• Immediate vesting• Less control over plan design (product

created for small and medium-sized businesses)

• Limited investment selection

MEMBERPros• Contributions and investment income


deductions• Immediate tax refund• Fees may be lower than DC RPP• Creditor protectionCons• Locked-in funds• Sponsor contributions not required

SPONSORPros• Easy administration• No contributions required• Employee salaries are tax deductible• Flexibility in plan design• Wide investment choices• Pension legislation not applicable• Payout proceeds more fl exible

than pension plansCons• Members can use accumulated money

for uses other than retirement income• Employer contributions are subject

to payroll taxes• Immediate vesting

MEMBERPros• Funds not locked-in• Contributions and investment income

tax-sheltered until payout • Immediate tax refund• Unused room is carried forward• Saving made easy via payroll deductions• Access to tax-free withdrawal

programs (HBP and LLP)Cons• Sponsor contributions not required• Lump sum withdrawals are not

restored the following year

SPONSORPros• More control than group RRSP• Contributions tied to company

profi tability• Tax-deductible contributions without

payroll taxes• Wide investment choices• Pension legislation not applicable• Payout proceeds more fl exible than

pension plansCon• Members can use accumulated

money for uses other than retirement income

MEMBERPros• Access to company profi ts• Investment income tax-sheltered until

payout• Funds not locked-inCons• No contributions allowed• Sponsor contributions not required

when no profi t is generated

SPONSORPros• Same as Group RRSP• Good complement to other plansCon• Same as Group RRSP

MEMBERPros • Tax-free investment income

accumulation and payout without affecting eligibility for federal social benefi ts

• Contribution room restored in the following calendar year when withdrawals are made

• Unused room is carried forward• Saving made easy via payroll

deductions • No age limit for withdrawalCons• Sponsor contributions not required• Contributions are not tax deductible

This brochure presents an overview of minimal rules of Canadian group retirement savings plans and other related information. The brochure is meant to be used as a general guide for plan sponsors when choosing a retirement savings plan. Plan sponsors may offer more generous provisions than minimal rules to plan members. Regulators provide legal and general information on their websites. Contracts and tax law as well as pension legislation and regulations take precedence over the present information. Industrial Alliance is not responsible for any oversight or errors following the use of this brochure. Please contact an advisor at one of our regional offi ces for additional information.

Summary Table

Transferability Options

1 Except in Alberta, British Columbia, New Brunswick, Newfoundland and Labrador, Nova Scotia and Saskatchewan2 In Alberta, British Columbia, New Brunswick, Newfoundland and Labrador, Nova Scotia and Saskatchewan3 In Manitoba and Quebec

1 The administrator is the individual, group, organization or entity determined by pension plan legislation or a similar act with the ultimate responsibility to administer the plan. According to CRA, all registered pension plans must have an administrator. 2 See the Capital Accumulation Plans (CAP) Guidelines adopted by the Canadian Association of Pension Supervisory Authorities (CAPSA) at www.capsa-acor.org. CAPSA is a national interjurisdictional association of pension supervisory authorities whose mission is to facilitate an effi cient and effective pension regulatory system in Canada.

Comparing Group Savings Plans (CAP Plans)

8

11

7

10

6

9


TFSA

Minimum rules








Contribution limit






By the employer


By the members












Possible N/A






Locked-In Assets



Transfer to


• LIRA

• LIF

• RRSP

• RRIF
























members’ payroll



may be permitted









with the employer


with the employer




































Immediate













N/A N/A N/A

















• By the member

























































Summary Table





8

11

7

10

6

9


TFSA

Minimum rules








Contribution limit






By the employer


By the members












Possible N/A






Locked-In Assets



Transfer to


• LIRA

• LIF

• RRSP

• RRIF
























members’ payroll



may be permitted









with the employer


with the employer




































Immediate













N/A N/A N/A

















• By the member

























































Summary Table





345

Overview

of Group Retirement

Savings Solutions

for Plan Sponsors









DPSPGROUP TFSA


No


Yes

No


Yes

No


Yes

No


Yes

No


No


Yes

No


Yes

No















retirement goals.


HALIFAX


QUEBEC CITY


MONTREAL


TORONTO


CALGARY


VANCOUVER


www.inalco.com

F50-

399A

(13-

04)



About





























Terminology









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CRA

Regu

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Regu

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Regu

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Regulated by CRA

Regulated by CRA

Regulated by CRA

Regulated by CRA





Group RRSP


DPSP


Group TFSA




Other CAP Plans
























Other related plans




DC RPP


SPP


PRPP



Documents

DC RPP SPP PRPP About HALIFAX On Trackessentiasolution.com/docs/offer/50-399A_On_track_with_the_right...3 4 5 Overview of Group Retirement Savings Solutions for Plan Sponsors Founded