A Voluntary Retirement Savings Plan (VRSP) is a smart decision for your business
Finding a way to save for retirement is important for you and for your employees, but setting aside time and energy to implement and manage a plan can be difficult. Administrative responsibilities of a workplace savings plan takes away from what you do best: running your business. The Chambers Plan and Manulife Financial have a solution.
The Voluntary Retirement Savings Plan (VRSP) is designed specifically for small to medium-sized businesses that do not yet have a workplace savings plan in place. The VRSP is a great product that helps employees of business owners save for retirement, maintains and improves employee morale, retains their best people and attracts the best workers.
A VRSP offers business owners an alternative to setting up a traditional defined contribution pension plan, which often comes with costs small enterprises simply can’t afford. It’s designed to be as straightforward as possible, easy to set up and maintain, with minimal investment of time and money required by the company. Similar to other workplace savings plans, the VRSP offers tax advantages for both employers and employees.
Key benefits to you
- A fast and easy online application and set up process that can be completed from the comfort of your own office in as few as 20 minutes
- There’s no paperwork - your contract is issued and accepted electronically
- Manulife takes care of many of the day-to-day administration tasks you or your staff would normally have to do
- You don’t have to contribute to your employees’ VRSP, but there are tax advantages for your company if you do:
- your contributions are not subject to payroll taxes
- your contributions are deductible as a salary expense for income tax purposes
Key benefits to your employees
- Low investment management fees
- Employee contributions to a VRSP are deductible from income before income tax is applied in the same manner as Registered Pension Plan contributions
- Money contributed by the employer to the VRSP is not included in an employee’s taxable income - the employee does not pay income tax on this money until it is withdrawn
- Easy to access – employees will be automatically enrolled in the plan when they are eligible and will have the ability to opt out of participation in the plan within a designated period of time
- Employee savings are “portable.” Those leaving their current employer can either leave their savings in their personal VRSP account or transfer it to a new employer’s plan
Learn more about the VRSP
The VRSP Quick Reference Guide is a great way to better familiarize yourself with the features and benefits to your business and your employees. For more information, contact your local Chambers Plan advisor or find an advisor on our website.