What
is it
Employer
sponsored pension plans fall into one of the following categories:
-
defined benefit pension
- defined
contribution pension
- group
registered retirement savings plan
- deferred
profit sharing plan
A Defined
Benefit plan provides, as the name suggests, a specific
benefit for the employee at a target retirement date. A
number of factors determine the amount of the benefit but
key components are average income (often for the last few
years prior to retirement), age and years of service. These
plans require annual actuarial valuations and can be difficult
to administer.
A Defined
Contribution plan shifts the responsibility for the ultimate
benefit from the employer to the employee. The employee
defines the amount of contributions they will make annual,
subject to legislated guidelines, and, in most cases, also
directs where the money will be invested. These plans are
administered by insurance companies and can have a variety
of investment options depending on the size (in dollars)
of the plan and the requirements of the employees.
A Group
Registered Retirement Savings plan (RRSP) carries all the
same characteristics as plans available on an individual
basis with some additional benefits to the employee, such
as:
-
payroll deduction
- immediate
tax credit with each contribution
- reduced
administration fees
A Deferred
Profit Sharing plan (DPSP) provides a tax sheltered savings
plan to employees while linking employer deposits to financial
results of the company.
How
can we help
The
Hull Group has in-house actuarial support that can provide
the valuation on an annual basis for your defined benefit
plan. In an age when employers are looking for ways to reduce
the liability associated with this plan design, we will
provide strategic advice on proven methods for accomplishing
that goal.
Our
experts will provide you with benchmarks for plan design
and help in the selection of the best administrator for
your defined contribution pension, RRSP and DPSP plans.
We will be there to ensure that the investment results remain
competitive and that service levels, especially communication
materials for your employees, meet our mutual standard.
