Group Savings

Fairfield Watson provides consulting services relating to the establishment and operation of a group retirement savings programs. Rely on our experience & expertise to help you with all aspects including legislation & governance compliance, plan design optimization with full integration and transition, investment selection, monitoring and advice, fee bench-marking and participant education & communication strategies.

Retirement is an important transition for both your organization and the departing employee. A well-planned retirement policy will include a group retirement savings program for your employees. Not only will it save your organization time and grief in the long run, but it will assist your organization by attracting and retaining high-quality & experienced employees. Overall, it will create a stronger organizational culture while helping employees plan for their future!

Filtering through the countless choices of group retirement programs can be overwhelming. At Fairfield Watson, we offer consulting on many savings and investment programs. There are several reasons we would recommend each (or a combination) of these plans because of the benefits to each of them.  For employers and their employees, the goal is overall financial wellness. Below are the types of plan we provide comprehensive consultation; however, we would love the opportunity to understand your organization’s strategy and outlook so we can find what plan would best suit your company and your employees!

Defined Contribution Pension Plan (DCPP)

This plan Is a savings vehicle which is registered with Canada Revenue Agency (CRA) and the pension jurisdiction that is sponsored by the employer to provide a pension to employees upon retirement. Characteristics of this plan are:

  • Investment earnings are tax-deferred until the pension benefits are paid.
  • Employer contributions are not a taxable benefit to employees and therefore not subject to payroll deductions at source. Employer contribution minimum is % of employee’s salary.
  • Employee contributions are tax-deductible by employees and are not subject to payroll taxes. Employee contributions can be mandatory or voluntary (as per plan rules).
  • Eligibility: Employer determines this (Pension legislation for each jurisdiction specifies minimum eligibility requirements).
  • Vesting: Legislative minimums for vesting vary by jurisdiction.
  • Contribution Limit: 18% of current year’s earnings up to CRA limit.
  • Withdrawals: Not allowed on employer or employee contributions. Voluntary contributions are allowed to be withdrawn and are subject to withholding tax.

 Registered Retirement Savings Plan (RRSP)

This plan Is a savings vehicle which is registered with Canada Revenue Agency (CRA), allowing employees to save for their future on a tax-sheltered basis. Characteristics of this plan are:

  • Investment earnings are tax-deferred until the benefits are paid.
  • Employer contributions are a taxable benefit to employees and therefore subject to payroll deductions at source. Employer contribution don’t have a minimum requirement and are a tax-deductible for employees.
  • Employee contributions are tax-deductible by employees and are not subject to payroll taxes. Contributions are voluntary and might attract employer match (as per plan rules).
  • Eligibility: Employer determines this.
  • Vesting: Immediate.
  • Contribution Limit: 18% of last year’s earnings up to CRA limit.
  • Withdrawals: Restrictions may be added. Withdrawals are subject to withholding tax.

Deferred Profit Sharing Plan (DPSP)

This plan is a trusteed arrangement under which an employer shares profits from their business with all or a designed group of employees to provide income at retirement. Usually offered in conjunction with an RRSP. Characteristics of this plan are:

  • Investment earnings are tax-deferred until the benefits are paid.
  • Employer contributions are not a taxable benefit to employees and therefore not subject to payroll deductions at source. Employer contribution don’t have a minimum requirement and are not tax-deductible for employees.
  • Employee contributions are not allowed.
  • Eligibility: Employer determines this.
  • Vesting: As per plan rules (no later then 2 years of employment),
  • Contribution Limit: 18% of current year’s earnings up to CRA limit.
  • Withdrawals: Not allowed.

Tax Free Savings Account (TFSA)

This plan is a registered savings account that allows taxpayers to earn investment income tax-free inside the account. Characteristics of this plan are:

  • Investment earnings are tax-deferred until the benefits are paid.
  • Employer contributions are a taxable benefit to employees and therefore subject to payroll deductions at source. Employer contribution don’t have a minimum requirement and are not a tax-deductible for employees.
  • Employee contributions not tax-deductible by employees and are subject to payroll taxes. Contributions are voluntary and might attract employer match (as per plan rules).
  • Eligibility: Employer determines this.
  • Vesting: Immediate.
  • Contribution Limit: $5500 per year
  • Withdrawals: Allowed and are not subject to withholding tax.

Non-Registered Savings Plan (NRSP)

This plan is for employees that have reached their RRSP & TFSA contribution limits and would like to continue to save for a project or for your retirement. Characteristics of this plan are:

  • Investment earnings are taxable Employee’s grow their investments to fund your projects.
  • Contribution Limit: None
  • Withdrawals: Allowed and are not subject to withholding tax.

Plan Implementation 

  • Plan Design
    • Analysis of needs and expectations.
    • Analysis of current program vs. alternatives with recommendations.
  • Request for proposals forwarded to appropriate service providers.
  • Analysis of proposals and recommendations.
  • Recommendation of fund line-up.
  • Coordination of the set up with the selected service provider (all aspects).
  • Governance documentation set-up (adherence to CAP Guidelines).

The CAP Guidelines issued by the Joint Forum of Financial Services Regulators have highlighted the fact that CAPs are complex and potentially risky arrangements. Our consulting services are designed to maximize efficiencies of managing the complexities and risks in CAP’s to ensure full compliance with the CAP Guidelines. *Although fiduciary risk cannot be totally eliminated, Fairfield Watson aid in the process of mitigating that risk.

  • Coordination of enrollment education and communications for employees.

Annual Services 

  • Committee meeting participation
  • Governance Documentation (adherence to CAP/CAPSA Guidelines)
    • Governance Mandate/Code of Conduct/Conflict of Interest (Pension Plans)
    • Governance Policy (Pension Plans)
    • Statement of Investment Policies & Procedures (SIPP)
    • CAP/CAPSA Governance Plan Annual Checklist
  • Plan Review & Investment Analysis
    • Industry update, plan review, economic update, fund review & recommendations
  • Market Search Analysis (every 3 to 5-year basis)
  • Pro-active communication on service provider & legislative changes.

Education & Communication 

  • Education “Target” recommendations (Measurable target(s) to increase employee engagement)
    • Hosting/coordinating employee education
    • Written employee communications
  • One on One employee support (on-boarding/during employment/off-boarding)