The group TFSA for businesses allows participants to benefit from a tax-sheltered investment vehicle. Withdrawals are tax-free and can be made at any time. The employer can also contribute up to a maximum established by the employer.

It is a contract whereby the employer shares part of the profits of the company with the workers. Only the employer can contribute to a RPDB and this determines the conditions of membership in the plan and those for the withdrawal of accumulated sums by workers. This type of plan is often offered in conjunction with a group RRSP, and contributions are deductible as a business expense.

The RRS is a defined contribution plan in which the amount of contributions is fixed in advance, but not the amount of retirement income. The employer’s contribution is locked in, while the employee’s contribution may or may not be locked in, at the employer’s discretion. It is important to note that the locked-in amounts must be used to provide retirement income and can only be withdrawn under certain very strict conditions.

The RRS is administered by a financial institution. Each participant selects his investments from choices provided by the financial institution. The RRS was designed for SMEs, but is suited to businesses of all sizes.

The amount of contributions to a defined contribution plan is fixed in advance, but not the amount of retirement income.

Members’ DCP retirement income depends on the amounts credited to their individual accounts. The sums paid to them are therefore accounted separately from those of other participants.

The financial risk associated with the plan depends on the performance of the investments and is assumed by the participant.

Usually, the plan is administered by a pension committee and, in some cases, by the employer.