Overview of plans

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VRSP / PRPP are an important new way for employers to provide employees with a way to accumulate tax-sheltered savings for retirement. Here’s a quick overview of the various options.

Type of Plan	Suitable For	Employer Contributions Required?	Employee Contributions	Investment Options	Key Benefit
VRSP	All employers, but mandatory for businesses with 5 or more eligible employees who do not already have the opportunity to contribute to a registered retirement savings plan or a tax-free savings account through payroll deductions and are not members of a registered pension plan. Also suitable for self-employed individuals and individuals whose employer has not subscribed to a VRSP.	No (but permitted). Contributions are locked-in so that they will be used to provide a retirement income.	Default contribution rate and automatic increases set by regulation, but employee can choose a different contribution rate or opt out of the plan. RRSP contribution limits apply. Employee contributions can be withdrawn anytime by the employee.	A default investment that meets the criteria determined by regulation and three to five other investment options of varying degrees of risk and expected return that would allow a member to create a portfolio appropriate for retirement savings.	Lowest maintenance option, with minimal employer responsibilities, and a simple plan design makes this plan easy for employers to manage. Automatic enrolment and automatic contribution increases encourage employee participation and saving. Lower investment management fees.
PRPP	All employers, but developed with small- to medium-sized businesses and self-employed individuals in mind.	No (but permitted). Contributions are locked-in so that they will be used to provide a retirement income.	Default contribution rate and automatic increases set by the plan administrator but employee can choose a 0% contribution rate or opt out of the plan. RRSP contribution limits apply. Employee contributions are locked in except in specific circumstances.	Balanced fund or target date funds as default; up to five additional funds may be chosen by the plan administrator. Provincial legislation may vary.	Lowest maintenance option, with minimal employer responsibilities, and a simple plan design makes this plan easy for employers to manage. Automatic enrolment and automatic contribution increases encourage employee participation and saving. Lower investment management fees.
Other options for employers who want to take a more active role in their workplace savings plan
SunAdvantage my savings Group RRSP and Tax-Free Savings Account (TFSA)	Organizations with 3 or more employees, and total annual contributions between $10,000 and $75,000.	No (but permitted).	Can be required or optional for RRSP, and are optional for TFSA. Contributions can be withdrawn anytime by the employee. The employer can choose to restrict withdrawals from the RRSP portion of the plan.	Target date funds, target risk funds, 14 single asset class funds, plus guaranteed funds.	Easy to set up, with flexible plan design options. More investment choice than with a PRPP.
Defined contribution pension plan (DCPP)	Medium to large-sized businesses with total annual contributions of more than $75,000.	Yes.	Employer has the option of requiring employee contributions. All employer and required employee contributions must be used to provide retirement income once they are locked in.	Over 130 funds with a broad choice of investment styles, plus a full range of target date, target risk, and multi-risk target date funds.	Maximum flexibility in terms of investment choices. Has the locking-in benefits of a pension plan, ensuring funds are used to provide retirement income.