Voluntary retirement savings plan (VRSP)
All about the VRSP
VRSP
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Since July 1st 2014, the Law now requires all employers to offer a pension plan to their employees, which was born the VRSP. This plan is for workers who have no pension plan offered by their employer and the self-employed. Employers have a time limit to implement the VRSP (or other retirement plan) to their employees .
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Employers covered
All enterprises with 5 or more employees in Quebec that offer no registered retirement savings plan (RRSP) or Tax-Free Account Savings Account (TFSA ) for which a payroll deduction could be made, or no pension plan offered. These have compulsory to set up a VRSP (or other type of retirement plan) on time. Some companies are not required by law to offer a VRSP but could have interest to do so, such as :
Are you a business described ?
Employees covered
The affected employees are employees aged 18 and over who were in continuous service of the employer for more than a year as defined by the Loi sur les normes du travail. Temporary and seasonal workers may be counted in calculating the number of employees.
Are you a covered worker ?
Time allowed to comply with regulations
Companies with 20 employees or more : until 31 December 2016
Companies with 10 to 19 employees : until 31 December 2017
Companies with 5 to 9 employees : until 1 January 2018
As for the other companies, they can offer the VRSP voluntarily.
An inexpensive plan
A VRSP management fees are inexpensive. Total deductible costs of the asset's performance VRSP must be less than or equal to :
The investment options
With competitive rates, however, are limited as to VRSP investment options. A default investment option is available as well as 3-5 other investment options with varying levels of risk and return .
Plan administration
The administration of a VRSP is relatively easy for an employer. It is responsible for collecting contributions, but is managed by an authorized administrator. The employer must automatically enroll all employees affected.
Contributions
Contributions to VRSP are voluntary, so any employee can give up to join the plan, cease or suspend his participation by asking the employer. Contributions are deducted from the wages of employees and are tax deductible. Contribution rates are applied by default, but the worker may, however, fix a different rate. The default contribution rate is :
Authorized administrators
SAFJ, being an independent firm of all financial institutions, can offer VRSP among the authorized administrators, such as :
Reality
The Law requires businesses to comply with the implementation of a VRSP, however, another type of pension plan may prove to be a better option for some businesses. Thus, it is essential to choose the best solution to the needs of the employer and employees. Therefore SAFJ offers expertise in group annuity plan to give you sound advice and opt for the solution that 's best for your needs !
For more information on the VRSP or other retirement plan, please contact us or visit the website of the Régie des Rentes du Québec.
http://www.rrq.gouv.qc.ca/fr/retraite/rver/Pages/rver.aspx
All enterprises with 5 or more employees in Quebec that offer no registered retirement savings plan (RRSP) or Tax-Free Account Savings Account (TFSA ) for which a payroll deduction could be made, or no pension plan offered. These have compulsory to set up a VRSP (or other type of retirement plan) on time. Some companies are not required by law to offer a VRSP but could have interest to do so, such as :
- Companies of 1 to 4 employees
- Companies that federally regulated activities (banking, interprovincial transportation and telecommunications business, government department or government agency, etc.)
- Self-employed
Are you a business described ?
Employees covered
The affected employees are employees aged 18 and over who were in continuous service of the employer for more than a year as defined by the Loi sur les normes du travail. Temporary and seasonal workers may be counted in calculating the number of employees.
Are you a covered worker ?
Time allowed to comply with regulations
Companies with 20 employees or more : until 31 December 2016
Companies with 10 to 19 employees : until 31 December 2017
Companies with 5 to 9 employees : until 1 January 2018
As for the other companies, they can offer the VRSP voluntarily.
An inexpensive plan
A VRSP management fees are inexpensive. Total deductible costs of the asset's performance VRSP must be less than or equal to :
- 1,25 % of average assets for the default investment option
- 1,5 % of average assets for any other investment option
The investment options
With competitive rates, however, are limited as to VRSP investment options. A default investment option is available as well as 3-5 other investment options with varying levels of risk and return .
Plan administration
The administration of a VRSP is relatively easy for an employer. It is responsible for collecting contributions, but is managed by an authorized administrator. The employer must automatically enroll all employees affected.
Contributions
Contributions to VRSP are voluntary, so any employee can give up to join the plan, cease or suspend his participation by asking the employer. Contributions are deducted from the wages of employees and are tax deductible. Contribution rates are applied by default, but the worker may, however, fix a different rate. The default contribution rate is :
- 2 % of gross salary until the end of 2017
- 3 % in 2018
- 4 % from 2019
Authorized administrators
SAFJ, being an independent firm of all financial institutions, can offer VRSP among the authorized administrators, such as :
- National Bank
- Desjardins
- Sun Life Financial
- Industrielle Alliance
- London Life
- Manulife
- RBC
- Standard Life
Reality
The Law requires businesses to comply with the implementation of a VRSP, however, another type of pension plan may prove to be a better option for some businesses. Thus, it is essential to choose the best solution to the needs of the employer and employees. Therefore SAFJ offers expertise in group annuity plan to give you sound advice and opt for the solution that 's best for your needs !
For more information on the VRSP or other retirement plan, please contact us or visit the website of the Régie des Rentes du Québec.
http://www.rrq.gouv.qc.ca/fr/retraite/rver/Pages/rver.aspx