HR Home Forums Community Withdrawing from group RRSP

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  • Mark Peters
    Participant
    Post count: 4

    One of our employees wants to withdraw funds from our group RRSP. It’s a matching program where we match up to 5% of the contributions. According to the “rules” employees are not allowed to withdraw their contributions or the matching contributions, only their own voluntary contributions, but we can make an exception as the employer.

    Under what circumstances would an exception be made

    Rick Tobin
    Keymaster
    Post count: 40

    You set the policy for when exceptions can be made, but you should consider things like penalties, admin costs, etc while setting those exceptions.

    Some best practices are when it is being used towards a home purchase, when they want to exit the plan to move to another managed portfolio, divorce/separation, after X number of years of contribution. Group RRSPs should not be treated like a shared checking account, and too many exceptions will create an administrative nightmare for you you to manage.

    Your plan advisor should be able to help you to develop a policy that minimizes your costs and need for intervention.

    HR Insider Staff

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