Workplace pension plans
For most Quebeckers, workplace pension plans and personal savings round out the income provided by public plans and they are necessary to maintain their standard of living in retirement.
If you are a member of a workplace pension plan, be sure to learn all about it. You will need that information to start planning for retirement. Consult your statement of benefits regarding the plan. It is an essential tool for planning your retirement.
Workplace plans include:
- supplemental pension plans (SPPs)
- voluntary retirement savings plans (VRSPs)
- group registered retirement savings plans (group RRSPs)
- group tax-free savings accounts (group TFSAs)
- deferred profit-sharing plans (DPSPs)
- public-sector pension plans (PSPPs).
Which one applies to you?
Supplemental pension plans
Supplemental pension plans go by many names: pension plan, registered pension plan, employer plan, etc.
supplemental pension plan is a plan to which an employer contributes in order to provide member employees with a retirement income. Employees can contribute to the plan if its provisions so allow.
Types of supplemental pension plans:
Defined-contribution plan: The amount of contributions that must be paid into the pension fund are determined in advance. The amount of your retirement income will depend, in part, on the total sums accumulated in your account.
A simplified pension plan (SIPP) is part of this type of plan.
Defined-benefit plan: The amount of the pension you will be paid in retirement is set in advance. It is usually a percentage of your salary multiplied by your years of service.
Target-benefit plan: The amount of employer contributions that must be paid into the pension fund, as well as benefit target level are set in advance. The amount of your benefits depends on the plan's financial situation. The amount is established by taking into account the target benefit adjustments.
Voluntary retirement savings plans
The Voluntary retirement savings plans (VRSPs) are group savings plans offered by employers and administered by
VRSPs are mainly for employees who do not have access to an employer-sponsored group retirement savings plan. Employees must be 18 or over and have at least one year of uninterrupted service, as defined in the Act respecting labour standards. If you participate in a
VRSP, you can establish the amount you contribute yourself. Employers may contribute to the
VRSP, but they are not required to do so. The amount of your retirement income will depend, in part, on the total sums accumulated in your accounts.
Self-employed workers and any other interested parties can also take advantage of
VRSPs by contacting an
Group registered retirement savings plans
A Group registered retirement savings plans (group RRSPs) is like a collection of individual RRSPs. Contributions to the group
RRSP are generally made through payroll deductions.
For more information about group RRSPs, contact the
Canada Revenue Agency .
Group tax-free savings accounts
Contributions paid into a group tax-free savings accounts (group TFSAs) are not tax deductible. However, investment income and withdrawals are tax-free.
Anyone age 18 or over can contribute to a TFSA. There is no maximum age limit or minimum income requirement. Withdrawals can be made at any time.
For more information about group TFSAs, contact the
Canada Revenue Agency .
Deferred profit-sharing plan
deferred profit-sharing plan (DPSP) is plan by which employers can share a portion of the company's profits with employees. The employer is the only one who contributes.
Public-sector pension plans
There are many different types of
Public-sector pension plans (PSPPs), the most common of which is the Government and Public Employees Retirement Plan (RREGOP). PSPPs are defined benefit plans for employees in the Québec public and parapublic sectors (public service, education, health and social services sector). These plans are administered by Retraite Québec.
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