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Posted by Jimmy Carbonneau, Group insurance and group annuity plans advisor, December 17 2015
Group Retirement Savings Plan
VRSP: Selecting the Right Financial Institution


After careful consideration, you have decided to offer your employees a Voluntary Retirement Savings Plan (VRSP) before the deadline. You made the right decision! However, VRSPs are provided by several financial institutions. Which one should you choose?

Businesses are naturally inclined to turn to the financial institution they use for financing or routine transactions. However, how can you be sure that it would be the best choice among all the authorized financial institutions? Find out how in this article!

4 criteria to consider

To offer the best product to your employees, you must analyze several components of the plan. We recommend that you pay special attention to the following aspects:

Investment funds offered

The legislation requires that financial institutions propose “life cycle” funds1 along with 3 to 5 additional investment options with different risk and return levels. It is up to each financial institution to select the funds in keeping with these criteria.
      • Some financial institutions offer funds that perform better than others. This will have an impact on your employees’ retirement. Therefore, you must compare the available funds.
      • Some financial institutions use externally managed funds (third-party manager independent from the financial institution offering the VRSP), whereas others use their own “in-house” funds.
      • Should “in-house” funds perform poorly, will the institution accept to remove from its proposal the funds that did not perform as expected? Possibly, but this would certainly prove more difficult than with a third-party fund. 

Management and administration fees

The legislation sets out the maximum management fees applicable to the investment funds in a VRSP. This allows financial institutions to compete, to a certain extent, to offer the lowest fees.
      • Therefore, it is important to ensure the fees charged are competitive.
      • The same goes for the administration fees charged to the employees (transfers out of the plan, withdrawals, etc.).

Ease of implementation

Several financial institutions have a well-developed online implementation tool (including an implementation guide) that makes the process much easier.

Some financial institutions are proposing a simpler enrollment process; be sure to validate it. Some of them also provide employee letter templates.

Ease of administration

The administration of a VRSP is frightening to many employers. Yet, it can be quite simple. It all depends on the available tools, which vary significantly from one financial institution to another:
      • Website
      • Tracking reports
      • Integration with the payroll system
      • Etc.

In order to select the VRSP best suited to the needs of your employees, we invite you to contact us today.

Are you dissatisfied with the financial institution selected for your VRSP?

No problem! As an employer, you can change VRSPs at any time. However, it is important to comply with the rules set out in the signed contract and to pay all transfer-related fees. Before making this change, it is advisable to consult an expert. Contact us!

To learn more about the VRSP or the other available retirement vehicles, contact us without delay!

 1.“Life cycle” Funds:  Investment portfolios where the asset allocation is automatically adjusted to the employee’s investment horizon. The portfolio mix evolves over time (as the employee approaches retirement, the portfolio becomes increasingly conservative).
Jimmy brings overs 20 years of experience in pension plans. After starting his pension career at the Ontario Teachers’ Pension Plan, he worked as DC Consultant for a large actuarial firm and two insurance companies before joining AGA. With his extensive pension experience, he has developed an acute expertise in the selection, the design and the implementation of pension plans. Jimmy provides his clients with both expertise and insight on their employee benefits.
Jimmy Carbonneau, Group insurance and group annuity plans advisor