A Group RRSP (sometimes referred to as a Group Retirement Savings Plan, GRRSP or GRSP) is similar to an individual RRSP, except that it’s set up by the employer as a workplace benefit – part of the overall compensation package for employees.
You can choose to offer a base contribution (i.e. a dollar amount regardless of whether employees contribute anything) and/or a matching contribution (e.g. if an employee contributes 3% of their salary, you’ll also kick in 3%). Or, you can offer it without either of these contributions but instead as an easier way to automate your own contributions, steadily grow your future savings and enjoy immediate tax benefits.
Every pay period, these pre-tax earnings are automatically withdrawn from the employer’s account and deposited into the employee’s GRSP account. If the employee leaves your company (but doesn’t retire), they can simply transfer the money from your GRSP account into an individual RRSP.
Ultimately, it’s a great way to support an employee future financial goals – whether that be to retire, buy a house, or go back to school.
Check out this article on What is a GRSP?