Group RRSPs have become popular in recent years as more and more employers make them available to their employees. They can have all the same options as other types of plans. An individual account is maintained within the group RRSP for each participating employee or can provide for an employee to contribute to an account in their spouse’s name. Contributions to a group RRSP by an employer form part of the employee’s deduction limit. They are also taxable income to the employee, offset by receiving an RRSP contribution receipt. Normally, contributions to group RRSPs are not mandatory. If employees do contribute however through payroll deduction, the income tax deducted from their pay can be reduced at the same time, recognizing the deduction in their taxable income. When an employee leaves their place of employment, their contributions to the group RRSP can usually be transferred to their own individual RRSP.
