Implementing a group RRSP in an SME pays off for the employees, whose savings are made easier, but also for the SME itself, which equips itself with an effective tool to attract and keep its employees. In the context of a labor shortage, this is a significant asset.
In operation since 2003, Spiria is a custom software development company that offers application modernization, digital acceleration and co-development services to increase business velocity. Since 2021, the SME, which has three offices in Canada, has offered its 175 employees a group registered retirement savings plan (RRSP) to which it contributes 1%. “This year, we really saw the difference in terms of the retention rate,” says Isabelle Thériault, director, culture and talent, of the company.
PHOTO DENIS GERMAIN, SPECIAL COLLABORATION
Isabelle Thériault, director, culture and talents, of Spiria
Before establishing this collective plan, Spiria offered a profit sharing program. “It really depended on the investments we made to ensure our growth, so we were not able to guarantee something stable for employees. We said to ourselves that with a collective savings plan – of course we have to budget for it, so it’s part of the investments… if we want to see it as an investment! —, it helps ensure better stability for employees and certainly to have better financial health too,” says Mme Thériault.
A competitive advantage
According to Michèle Frenette, advisor specializing in group retirement plans and founder of GRMF, there is no doubt that the group RRSP is a competitive advantage for SMEs.
It’s a marketing tool for the employer because it’s an advantage – I can say “I’m offering you something” – and when the employee has his statements and sees the amounts that accumulate, from a From a marketing point of view, it’s stronger than $1 of salary that I put in my pocket, but my pocket is pierced and I spent it.
Michèle Frenette, advisor specializing in group retirement plans and founder of GRMF
Noah Loomis, a developer at Spiria for two years, does not go so far as to say that he works in this SME because of the collective RRSP, but nevertheless affirms that it played a role in his decision-making. “This is one of the advantages that Spiria provided and that other employers did not mention. »
PHOTO DENIS GERMAIN, SPECIAL COLLABORATION
Isabelle Thériault, director, culture and talents, of Spiria, Stéphanie Lê, director, business development, and Noah Loomis, developer
Same thing for Stéphanie Lê, who has held the position of director, business development, for three months. “I have had access to the group RRSP since this week,” she says. The Spiria group RRSP is offered to all employees, regardless of their hierarchical level, after three months of employment. Deductions are made from payroll, on a voluntary basis. “I’m not very good at managing my finances, opening a TFSA [compte d’épargne libre d’impôt], etc. For me, it helps me to have supervision, that it is deducted automatically and that in addition, the employer contributes for me,” says Stéphanie Lê.
According to Isabelle Thériault, offering a group RRSP in a very competitive job market undoubtedly helps with recruitment. “It’s not the only reason people come to us, but it’s a consideration. » She is also studying the idea of modifying the employer’s contribution based on the seniority of the employees. “It would be a strategy for employee retention. »
Considerable gains
For employees, in addition to making savings easier, the group RRSP provides an immediate tax credit and, most of the time, lower management fees.
For the employer, the group RRSP combined with a deferred profit sharing plan (DPSP) – a plan in which it makes its contributions on behalf of eligible employees – allows it to benefit from a number of advantages, including that of not paying payroll taxes. “If I contribute $1, it costs me $1,” explains M.me Frenette.
Another interesting advantage of the RPDB for the employer: deciding on certain agreements, such as a deadline for acquiring the sums.
PHOTO CHARLES WILLIAM PELLETIER, SPECIAL COLLABORATION
Michèle Frenette, advisor specializing in group retirement plans and founder of GRMF
There is just the DPSP which allows you to defer the acquisition of employer contributions. All other plans are: as soon as they are set, it belongs to the employee.
Michèle Frenette, advisor specializing in group retirement plans and founder of GRMF
This is what has been implemented at Spiria. “The person must have contributed for two years to be able to withdraw the sums that they themselves paid and all the sums plus interest that the employer also paid. It belongs to her and then she can transfer the sums to the account she wants,” explains M.me Thériault. Thus, if an employee resigns before two years, the amounts accumulated in his name will be returned to the employer.
Choosing a group plan
RRSP, voluntary retirement savings plan (RVER), simplified retirement plan, defined contribution plan… “There is no one plan that is better than another. The diet that is best is the one that best responds to what we want to do. It’s like personal finances,” says M.me Frenette.