- As an employer, you have got to play a role in achieving the financial security of your employees at retirement.
- A group retirement plan is more than just another expense for your business. It is an asset that allows you to attract workforce and improve your competitiveness.
- Depending on your needs and your goals, we will guide you in choosing the plan best adapted to your reality and we will support you in the management of your plan
We offer all the consulting services needed to put in place and manage group retirement plans.
How can dElta help you?
By appointing dElta as your group retirement consultant:
- We will help you choose your retirement plan's type and specifications to ensure it meets your needs and objectives
- We will help you select a plan administrator (insurer) and negotiate the fees they will charge
- We will propose a set of investment options of good quality, on which we perform a due diligence every year
- We will help you present the plan to your employees
- Once your plan in place, we will support you in the monitoring of the plan on a regular basis through our complete performance review
VRSP’s legal requirements
The Act on Voluntary Retirement Savings Plan applies to all Quebec employers with 5 or more employees. These are required to offer a retirement savings vehicle through payroll deductions by the following dates:
- December 31, 2016 (20 or more eligible employees)
- December 31, 2017 (10 to 19 eligible employees)
- Not before January 1st, 2018, exact date to be determined by the Government for others
Eligible employees are those who are at least 18 years of age and have a minimum of 1 year of uninterrupted service, as defined in the Act Respecting Labour Standards. The number of employees will be initially calculated on June 30, 2016 and then on June 30, 2017
Employers may comply with the new requirements by choosing a vehicle from among the following group retirement savings plans:
- VRSP, Group RRSP (with or without a Deferred Profit Sharing Plan - DPSP), Simplified Pension Plan (SPP), Registered Pension Plan (RPP) (of defined contribution or defined benefit type) and Group TFSA
- Each of these vehicles enjoys favourable tax treatment
Your goals and needs, and those of your employees, will dictate which type of plan is best for you
Employers are not required to contribute to the chosen plan but may do so if they wish
VRSP’s related obligations and deadlines
While the VRSP is a very simple vehicle, employers who subscribe to it must follow an administrative framework that is more rigid than for other types of plans
- Employers must inform their employees in writing of their intention to offer a VRSP at least 30 days prior to the effective date of the VRSP.
- Employers must automatically sign up all eligible employees (see Note 1 above).
- Employers must re-offer the plan (every two years) to employees who declined to participate in the plan or who set their contribution rate at 0%.
- Employees have 60 days to unsubscribe or to modify their contribution rate from the time they receive the financial institution’s confirmation that they are registered in the plan
- Employees who fail to take this step will be automatically enrolled in the plan and will have to contribute the default rate, i.e. 2% of their salary initially, then 3% in 2018 and 4% as of 2019
Capital Accumulation Plan for retirement
We offer complete services for capital accumulation plan for retirement (DC, SPP, RRSP, DPSP)
Design and modification
- Analysis of the employer’s needs and design of a plan that will meet its objectives
- Analysis of the financial impact of different contribution formulas for the employer
- Development of a set of investment options of good quality, on which we perform a due diligence every year
- Innovative solution for SME developed in association with Desjardins Insurance (dElta Retirement SolutionTM)
Service provider evaluation
- Analysis of the potential providers for the administration of the plan and negotiation of the management fees
- Annual monitoring of the plan comprising a review of the investment options, their returns and their use by employees, a review of the management fees and more, to support the employer and the pension committee dealing with their fiduciary obligations
- Analyse of the employees’ need for communication
- Organise sessions to explain the plan to employees, educate them to the need to save for retirement and help them understand options available at retirement
- Upon request by the employer, projection of the individual balances at retirement, and illustration of the income replacement ratios at retirement for each employee
Deﬁned Beneﬁt Pension Plan
We offer all actuarial, administration and consulting services required for the administration and management of defined benefit pension plans or hybrid plans with a defined benefit component
- Actuarial valuations for funding and accounting purposes
- Preparation of information needed to satisfy the disclosure requirements for the purposes of the financial statements of the employer
- Periodic monitoring of the plan’s funded status and projection to future dates
- Record keeping and annual update of membership data
- Preparation of the annual statement of accrued benefit for each plan member
- Calculations and statements of options following routine events such as termination of employment, death or retirement
- Benefit calculations and statements of options pursuant to a court order or separation agreement following marriage breakdown
- Calculation and reporting of pension adjustments, past service pension adjustments, pension adjustment reversals
- Completion of the annual information return and other forms required by regulatory authorities
Investment and risk management
- Review of investment policies and monitoring of investment performance
- Analysis of risks related to the mismatch of assets and liabilities
- Consulting on strategies to reduce risks related to the pension plan
- Support to Pension Committee and Plan Sponsor
- Organization and preparation of pension committee meetings
- Organization and preparation of the annual members’ meeting
- Support for the preparation of the plan’s financial statements
- Drafting of plan amendments and filing with regulatory authorities
- Support in negotiations with unions
- Consulting with respect to legal and other developments affecting the plan
Individual Pension Plan (IPP)
What is an IPP ?
An Individual Pension Plan (IPP) is a defined benefit pension plan for business owners and incorporated professionals, which allows for the most generous provisions under the income tax act. The IPP allows the participant to accumulate a pension equivalent to 2% of the compensation received in salary and bonuses for each year of service (from 1991). Annual pension credits are indexed until retirement in line with the increase in average wage in Canada, subject to the defined benefit limit set by the Canada Revenue Agency. Once in payment, the pension is indexed to inflation and the IPP provides for a survivor pension to the spouse of the member or the member’s beneficiary.
How can dElta help you ?
We offer all actuarial, administration, and consulting services required for the administration and management of individual pension plans (IPP) for connected persons
- Prepare an illustration to determine the feasibility to set up an IPP
- Advice on the selection of a the funding structure for the plan
- Filing with the Canada Revenue Agency (CRA)
- Initial actuarial valuation and request to CRA for approval of plan contributions
- Calculation of the pension adjustments to report on T4 slips for each active participant
- Complete annual review, including an actuarial valuation and projection of accrued pension at retirement
- Monitoring of the operations of the plan
- Preparation of the plan’s unaudited financial statements and the forms to file governmental authorities (T244 and T3P)
- Consulting with respect to legal and other developments affecting the plan
- Review of options available at retirement
- Elaboration of a strategy to start withdrawing money from the IPP
- Preparation of the actuarial report in case of plan termination
Retirement Compensation Arrangement
What is a Retirement Compensation Arrangement (RCA) ?
A retirement compensation arrangement (RCA) allows to save for retirement in a trust fund to provide a pension to participants in excess of the maximum pension allowed under the income tax act. The RCA’s fiscal regime differs from that of a registered plan as contributions are subject to a 50% tax. Such tax has to be deposited in a refundable tax account held by the Canada Revenue Agency. However, the tax is returned to the trust fund when the RCA starts paying a pension to the participant. Pension benefits are taxable to the participant only upon payment.
dElta offers the full service of implementation and registration of Retirement Compensation Arrangements, as well as the actuarial and administration services for the arrangement thereafter. On an annual basis, dElta provides advice on the allowable contributions and complete the forms to file with governmental authorities.