Are there any restrictions on the way I can set up the matching formula?
These illustrations can be altered in countless ways. The one thing to remember is that Registered Pension Plans have yearly minimums that must be contributed. In Alberta, 2% of the employee's base pay must go to the plan. (Generally, employers will make a 1% employee contribution mandatory, which they in turn match.)
Do I have to treat all employees the same?
The employer contribution can vary depending on the class of employee (i.e. managers receive up to a 6% match, while field employees receive up to a 4% match). Once employees are told what the parameters of the plan are, the employer should provide those benefits as a minimum. If an employee is exceptional, an employer can always make the plan rules better for that particular employee (i.e. plan rules say a 100% match, up to 6% of base pay, but for you we will do up to 9%). Exceptions like this should be done in private.
How do I protect myself from turnover?
You may want to have a waiting period for new employees. Typically, a 3-month probationary period is used before allowing enrolment in any plan.
What information is needed to prepare a plan quotation?
- Number of employees
- Estimated yearly cash flow into the plan
- Any transfers from previous group retirement plans