Deferred Profi t Sh aring Western Retail Plans (D PSP) Lumber Association A formal at-work program offering employees the opportunity to save for retirement is the most cost-efficient Defer re d Prof it Sha rin g method of saying Thank You. Plan s ( DPSP) There are numerous Retirement Plan options available to organizations. The “vehicle” to provide the retirement Shayne Smith Financial Security Advisor programs is legislated by different Shayne.email@example.com governments. The common Group Retirement vehicles are: Freedom 55 Financial 124 Nature Park Way . Group RRSP Winnipeg, Manitoba R3Y 1Y4 . DPSP Phone: (204) 489-1022 . Registered Pension Plan (RPP) Toll Free: (877) 489-1022 Fax: (204) 415-6262 All three are set up as defined contribution programs where the contributions going into the plan are defined and the benefit at retirement is determined by: Time & Rate of Return. Plan Design of a Retirement program can be customized to suit the corporate Glenn Kehrer, CEBS, CFP Information provided by firstname.lastname@example.org philosophy of the company and the budget. Shayne Smith Without an employer offering a Group Group Benefits Consulting of Canada Freedom 55 Financial Savings Plan, many employees will delay Suite 1103 -220 Portage Avenue Phone: (877) 489-1022 Winnipeg, Manitoba R3C 0A5 investing for the future in favour of managing short-term financial obligations. Phone: (204) 777-7789 Toll Free: (877) 777-8678 Fax: (204) 777-7329 People Love Profit A year-end bonus is nice to . Easily placed into a Monthly/Biweekly receive but: budget. . Is spent within a few months. . A huge assistance or start to an . Rarely are these bonuses placed in a employee’s future savings program. retirement vehicle. Deferred Profit Sharing Plans are usually . Is cashed right away. tied to an employee’s contribution to their . Has no two year vesting protection for own RRSP. the employer. For the most part employees: An employee contributing $100 per month . Is expensive for an Employer to provide will have $100 matched. This 100% rate of . Are proud of their jobs and of the place and sets a tone that each year a bonus return is a very positive retention tool and that they work at. Otherwise they would will be given. very attractive for new hires. seek new employment opportunities. . Each year you have to communicate The level of contribution can really make a . Love to be recognized for a good job and Why so Much or why so Little? difference for an employee. Contributions their contribution to the success of an start at 1% and can go up to the CRA organization. A Deferred Profit Sharing Plan maximum. . Are not saving enough money for their contribution is: . Not cashable until retirement, termination By setting up a plan where the employer retirement. People are living pay cheque or death of the member. matches employee contributions, everyone to pay cheque. wins, and the perception of the employer . Not vested to the employee until after A 4% contribution into a retirement plan investing in their people is intensified. two years of plan membership from corporate profits is more exciting (a refundable raise effect) To impact an employee’s retirement value, than receiving a $.57 per hour raise. Yet a minimum 4% employer contribution both equal the same cost for an employer. . Very attractive for an employee, as they matched by the employee is recommended. are now receiving some of the “Profit” (Based on a salary of $30,000). Once a that they work so hard to produce. pay raise has been given the base for all benefits has increased. . Not subject to the annual opening up of the corporate books to prove or disprove Government agencies make a lot of money People love Profit. We all work the level of profitability. on pay increases through the added CPP, hard to enrich our lives and those E.I. & WCB charges. of our families. By implementing A $1.00 pay increase reflects; a tax effective Group Retirement Saving Plan, you are providing $1.10 to the employer (E.I, CPP, WCB) employees with the tools and $0.65 received to the employee after support required to build the E.I, CPP and taxes are calculated. future they imagine. Therefore the Government earns 40% more on every dollar of pay increase.
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