Does Canadian Western Bank offer a group RRSP?
Yes. CWB offers a group RRSP program through its partner company and mutual fund dealer Canadian Western Financial (CWF). The group RRSPs are held and administered by Canadian Western Trust (CWT).
Are there any specific requirements that have to be met for the company to be able to participate?
The sponsor (employer) must provide a matching component for those employees who are participating in the group RRSP program. The amount of the matching component and the frequency of the matching deposits are up to the sponsor. There is no minimum or maximum dollar value for the sponsor`s contributions.
Can employees make contributions into the group RRSP plan in addition to what they are having automatically taken off their pay?
Yes. Employees are able to contribute additional money to their plans in three ways:
- The employee can increase the amount being taken off their paycheque to be put into to their group RRSP plan. The employee would advise their RSP administrator of the additional amount they would like to add so that the new amount is combined with what was already being taken off their pay as part of the plan.
- The employee can make a lump sum contribution which is a one-time deposit of a certain amount. The amount is up to the employee. This can be done by providing a letter of direction to their RSP administrator to be sent to CWT on their behalf. The letter would need to include the amount the employee would like to put into the group RRSP and a void cheque for the account the amount is to be taken from.
- The employee can open a CWB bank account and set up a direct debit for the amount of their choice to be put into to their group RRSP plan as often as they would like.
What are the mutual fund options available for my employees?
The Philips Hager & North LifeTime Target Funds® - Series O
Picture an investment solution that evolves as you age. The PH&N LifeTime Funds® do exactly this by providing you with a simple investing solution that keeps your portfolio appropriately allocated for each stage of life throughout your career and in retirement.
PH&N LifeTime 2015 Fund
PH&N LifeTime 2020 Fund
PH&N LifeTime 2025 Fund
PH&N LifeTime 2030 Fund
PH&N LifeTime 2035 Fund
PH&N LifeTime 2040 Fund
PH&N LifeTime 2045 Fund
The PH&N LifeTime Funds® are:
- easy to select.
- structured to adjust the asset mix automatically.
- intended to reduce the impact of inflation.
- effectively diversified at all time.
- professionally managed and rebalanced automatically to remain focused on long term goals.
What fees are associated with the group RRSP program?
The group RRSP plan has one low investment management fee for your company. The investment management fees that members pay are typically lower than the fees charged by individual mutual funds.
The fee for participating in the group RRSP program is 2.5% of the total investment value, calculated on an annualized basis, and charged quarterly. This fee includes everything for the setup and maintenance of the plan. The sponsor has the option of paying the fee for their employees or it can be passed along to the employees. The fee will show up as a separate charge on employee statements.
Can an employee transfer their RSP plan from another financial institution or mutual fund dealer into this group RRSP plan?
Yes. All transfers into the group RRSP plan must be done in cash since the fund company held within the CWF group RRSP is Phillips Hager & North. Transfer fees charged by the relinquishing institution will not be reimbursed by CWF or CWT.
In the event that a participating employee would like to transfer an RSP plan in kind to CWF, they can certainly do so; however, the plan will not be combined with their group RRSP plan. The plan transferred in kind would be maintained at a branch in their province with a CWF mutual fund representative as a separate plan at CWT.
What happens when an employee wants to withdraw money from their RSP plan that is part of the group RRSP?
All internal rules for the group RRSP plan are made by the plan sponsor. The sponsor can decide how often employees can withdraw or if there is to be a minimum withdrawal amount. When the employee would like to make a withdrawal they would fill out the RSP withdrawal form provided to them in their employee package and submit it to the sponsor’s RSP administrator, who would then provide the form to CWT for processing. There is no fee for withdrawals but all applicable RSP withholding taxes would still be applied and taken off of the amount being withdrawn.
How do the employees sign up for the group RRSP program?
There are two available options:
- The CWF representative will schedule a signup day with the plan sponsor at the business location to provide employee packages to each employee, and sit down with each employee to assist them with filling out the paperwork correctly and completely.
- The CWF representative will provide the employee packages to the sponsor’s RSP administrator and review the forms with them so they understand how they should be filled out. The RSP administrator can then assist the employees with completing the required paperwork.
What is CWT’s involvement with the group RRSP plan?
CWT is the administrator of the group RRSP plan. Once the plan has been set up and employees have been signed up, a CWT customer service representative will contact the sponsor’s RSP administrator. CWT will go over the sponsor’s employee account listing and the options for how to get the employee and sponsor`s contribution amounts to CWT for deposit into each employee plan. Any additional questions can be directed to your CWT customer service representative.
How do we get the money for the employee accounts to CWT?
The RSP administrator will be able to specify the amounts to go to each employee as a contribution to their plan by using a spreadsheet that will be provided to them by CWT. The spreadsheet will be needed for each deposit time frame. There are two options for getting the money to CWT:
- Direct deposit – The sponsor provides a letter of direction to CWT, with a void cheque attached, giving authorization for CWT to directly debit the sponsor’s bank account for the amount of the contributions to be made.
- Cheque deposit – The sponsor’s RSP administrator goes into the CWB branch location of their choice and drops off a cheque for the total amount of the contributions to be made.
What happens if an employee is no longer employed with the sponsor?
When an employee leaves the sponsor company, it is the responsibility of the RSP administrator to advise CWT by phone or email. The employee has two options:
- The employee may transfer their group RRSP plan in cash to another financial institution.
- The employee may keep their RSP plan but it will no longer be part of the group RRSP for the company. The PH&N funds held within the plan would be sold due to the special pricing received on the funds due to being part of the group RRSP plan. The plan would then be attached to the CWB bank branch of the employee's choice in their province. The employee would have a CWF mutual fund sales representative attached to their plan to provide recommendations and advice to assist them with making investment decisions going forward.