CAP stands for Capital Accumulation Plan. CAPs are savings plans that are typically sponsored by an employer and allow members to select investments from two or more options. Some example of CAPs include Defined Contribution Pension Plan (“DCPP”), Group Registered Retirement Savings Plans (“GRRSP”), and Deferred Profit Sharing Plans (“DPSP”) […]
What is the difference between a DCPP and GRRSP?
DCPPs DCPPs are retirement plans that allow employees to save for retirement. DCPPs are regulated by Canada Revenue Agency (“CRA”) under the Income Tax Act and provincially under the government of each province. For example, in Ontario, DCPPs are regulated by Financial Services Regulatory Authority (“FSRA”) under the Pension Benefits Act. One of the key […]
What is the cost to offering a retirement plan to our employees?
The bulk of the cost of offering a retirement plan to your employees will come from the employer contribution, if the employer decides to contribute to their employee plans. GRRSPs can be set up with no employer contribution, just voluntary employee contributions. Other fees include Investment Management Fees (“IMF”) which can be paid by the […]
My business has been negatively impacted by COVID-19, can we suspend contributions to our registered pension plan?
On May 5, 2020, the Minister of National Revenue confirmed CRA will remove the 1% employer contribution requirement for the remainder of 2020. Plan sponsors are required to amend their plan text to reflect the change and apply to the Registered Plan Directorate and the applicable provincial regulator for approval. […]
What are Investment Management Fees?
IMFs cover the majority of the fees required to manage a retirement plan. The fees typically cover services such as record keeping, custodian, investment management and consulting. IMFs are equivalent to Management Expense Rations (“MER”) on the retail side. […]
How do consultants get paid?
We offer flexible fee options, including commission, fee for service and fixed fees. For commission based fees, we imbed the commission in the IMFs so the fees are paid for by the employees. […]
If we decide to reduce or suspend contributions to our registered pension plan, what is required?
Any changes to the contribution formula requires an amendment to the plan text and notice to plan members. […]
Has there been an extension to regular contribution remittance?
No, all contributions have to be remitted within 30 days of deduction from an employee’s pay, or in accordance with the terms of the plan and applicable legislation. […]
Is an employer required to continue pension contributions to employee who has been temporary laid-off due to COVID-19?
Yes, in May 2020, the government of Ontario introduced the Infectious Disease Emergency Leave regulation, providing job protection for employees impacted by COVID-19. Similar to other emergency leaves, employers are required to continue providing benefits, including pension contributions, unless the employee elects in writing not to do so. The leave entitlements are retroactive to January […]
An employee is on unpaid leave to care for children due to school closures. Do we have to continue contributing to the employee’s pension plan?
Yes. The government of Ontario recently amended the Employment Standards Act (2000) to include an unpaid, job-protected infectious disease emergency leave. Employers are required to continue pension contributions during these emergency leaves. The leave entitlements for COVID-19 are retroactive to January 25, 2020. Employees can take infectious disease emergency leave if they will not be performing the duties […]