A Group Registered Retirement Savings Plan (“RRSP”) is an employer-contribution retirement plan, that it similar to an individual RRSP. However, it is administered by the employer. The significant advantage to a Group RRSP is that contributions from your employer are made on a pre-tax basis through payroll deductions. Meaning if you were to receive a $10,000 bonus from your employer, you would only actually receive about $5,400 after taxes. However, if the bonus is paid directly into your Group RRSP, then the full $10,000 would be deposited into the savings account. An additional feature is that employee contributions are often matched by the employer.

Group RRSPs are not locked in. So once you leave your employer you can transfer from the Group to your own individual RRSP, use it to buy an annuity, or take it as cash and count it as income in the year of receipt.