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Posted by Simon Pagé, Group Insurance and Group Annuity Plans Advisor, October 20 2016
Pension Plan
An 8-step process to set up your retirement plan

regime-de-retraite

You are now ready to set up a retirement plan for your employees? To ensure a smooth and most efficient process, there are some key steps – eight in total! – you would be well advised to follow. To assist and guide you through this process, each of these steps are outlined below. They are yours to discover!

1 - Selecting the type of retirement plan

There are several types of retirement plans to choose from. It is important to select the right plan, i.e. the one that best suits the needs of your business and your employees. To help you with this selection, you may read our post on the 7 questions you should ask yourself before choosing a group retirement plan.

2 - Confirming plan features

Before starting to implement your plan, several aspects must be specified, such as the qualifying period, the contribution level, the funds offered, etc. You may read our post on the 9 points to consider before setting up a group RRSP, where you will find a description of all the essential features that must be worked out. Also, especially with the law that will soon require all business owners to offer a retirement plan to their employees by the end of 2016, it is important to make sure your company is complying with what will be legally required.

3 - Selecting your service provider

Insurance companies are the main service providers for retirement plans. They each have their strengths and weaknesses. It is important to consider the management fees that will be levied on your employees’ investment return, but the fund offering and performance, the web platform, the services included, etc. are equally important.There are 4 main criteria frequently used for selecting a financial institution. They are described in the following post.

4 - Setting a time frame for implementing your plan

Implementing your retirement plan can take a few weeks. The insurance company must create the account and program everything in their system. Therefore, you must set a realistic time frame. As many businesses are required to offer a retirement plan to their employees by the end of 2016, it is important to act sooner than later to avoid the predictable year-end crush.

5 - Signing documents

Once the implementation date has been set, the employer will have to sign the forms and documents prepared by the insurance company. This is the step where the plan details and effective date are confirmed. It is important to properly validate the documents and ensure the accuracy of the information. This will prevent problems down the road!

6 - Communicating with employees

It is important to develop a good employee communication plan based on employer and employee needs. Group meetings are often preferred, as they create a clear understanding and prevent false starts! Several aspects must be addressed, such as investment choices and returns, the enrollment process, beneficiary selection, etc. A Q&A period is usually planned to ensure everything is clear for your employees.

7 - Enrollment period

After the meeting, the employees will have to enroll in the plan. This can be done using a paper form or directly online, thus minimizing employer involvement. Employees will specify such things as the amount they want to contribute, their investment instructions and the name of their beneficiary.

8 - Remitting contributions

Once employee enrollment is completed, all you have to do is to program contribution deductions in your payroll system and periodically remit the amounts to the insurance company.

To guide you through the setting up of your retirement plan, you can download our retirement plan implementation guide. Do not hesitate to contact one of our advisors to benefit from their expertise when setting up your plan.

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Group Insurance and Group Annuity Plans Advisor | Holding a Bachelor of Actuarial Science degree, and Associate of the Canadian Institute of Actuaries, Simon Pagé worked as group annuity plans advisor for large consultants and actuarial firms. With his 15 years’ experience, he has developed a renowned expertise, notably in the selection, development and implementation of annuity plans. In addition, Simon holds a permit in group insurance adding to his expertise and bringing a global vision in benefits related issues for his clients.
Simon Pagé, Group Insurance and Group Annuity Plans Advisor