35 Questions
What is a key characteristic of a Registered Retirement Savings Plan (RRSP) in terms of contributions?
Contributions are tax-deductible within Income Tax Act limits
What happens to investment earnings in a Registered Retirement Savings Plan (RRSP)?
Investment earnings are tax-sheltered
In a Group RRSP, what is the main advantage of having centralized administration?
Employer contributions are considered additional employee earnings
What is the purpose of a 'spousal' account in a Group RRSP?
To allow the spouse to contribute to the employee's retirement savings
What distinguishes Spousal RRSP withdrawals from regular RRSP withdrawals?
Spousal RRSP withdrawals have different tax rules than regular RRSP withdrawals
At what age must an individual purchase an annuity or transfer their RRSP to a RRIF?
71 years old
What is the main purpose of a spousal RRSP?
To allow the employee to contribute to their spouse's retirement savings
In the context of RRSP contribution limits, how are historical contributions taken into account?
They are not relevant in determining the contribution limit
What are some examples of 'earned income' as defined by the Income Tax Act for RRSP purposes?
Business income
What additional costs might a plan sponsor experience in relation to contributions to a Group RRSP under the ITA?
Additional payroll taxes
What is the maximum amount a plan sponsor can contribute to a DPSP in respect of a plan member?
$18,000 per year
What is the tax implication of withdrawing funds from a Group RRSP or DPSP before retirement?
Tax deducted on withdrawals ranges from 10% to 30%
Which retirement income option allows a member to defer income from an RRSP portion to age 85?
Advanced Life Deferred Annuity
What feature of a Group RRSP makes it advantageous for employees compared to an individual RRSP?
Convenient payroll deductions
In the context of retirement income options, what is a key difference between a Life Income Fund (LIF) and a Registered Retirement Income Fund (RRIF)?
Maximum withdrawal amount
What is a significant advantage of a Group RRSP and DPSP combination for employers compared to a DC registered pension plan?
Flexible employer contribution provisions
Why might an employer choose to contribute to a DPSP instead of a Group RRSP?
Employee retention incentives
What is the main factor determining how plan sponsors set contribution amounts to Group RRSPs and DPSPs?
Company profits
What is a potential advantage of a DPSP compared to a Group RRSP for employees?
More accessible funds at termination
What happens to forfeited amounts in a DPSP if an employee leaves before the vesting period is complete?
They are retained by the employer
How does a DPSP incentivize employees to contribute to increasing company profits?
Higher contribution matching
What is one way in which a DPSP differs from a DC registered pension plan in terms of accessibility of funds?
Lump sums allowed before termination
What is a key aspect of the fiduciary responsibility of a plan sponsor of a Group RRSP or a DPSP?
Setting parameters for administrators and fund managers
In what way are Group RRSP/DPSP with multiple investment choices affected by the Capital Accumulation Plan Guidelines?
'Non-discrimination' requirements enforced
What is one reason an employer might choose to contribute to a DPSP instead of a Group RRSP?
Contributions are tax deductible
Contributions to DPSP are not tax deductible.
False
Vesting in a DPSP can only take up to 1 year.
False
In a DPSP, in-service withdrawals are always allowed.
False
Employees have no incentive to increase company profits with DPSP.
False
Contributions to DPSP are always required, even in non-profitable years.
False
Funds in a DPSP are less accessible at termination compared to a DC registered pension plan.
False
Non-locked-in payments are allowed in a DPSP.
True
Plan sponsors of non-registered retirement plans have no fiduciary responsibilities.
False
In a Group RRSP/DPSP, participant benefits are not tied to fund manager performance.
False
Group RRSP/DPSP with multiple investment choice options are not subject to Capital Accumulation Plan Guidelines.
False
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