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Group RRSPs - the Good, Bad, and the Ugly

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Group RRSPs are awesome right?

Let’s take a closer look at group RRSPs and see how awesome they are. I am by no means familiar with all group RRSPs in Canada, so I can only speak about the ones I have seen.


The Good

If you work at a company with a group RRSP, you know the best part is free money. What can be better than that? Another thing great about these is the automatic contributions; money gets invested for you without you having to do anything – once you have signed up.


The Bad

Signing up can be confusing for some group RRSPs. I have seen cases where the employee is handed a package to fill out, which includes the investments they can choose from. There is no one to work with to find out what funds they should choose or even what these funds are. So no suitability analysis is done.


The Ugly

With some group RRSPs there is no ongoing service or reviews to ensure employees are invested appropriately. So, if an employee chooses an inappropriate fund or funds and does not have reviews, she/he could end up not being able to achieve their goals. I have seen many times where the investment(s) chosen were inappropriate for the employee. After all the average employee has no way of knowing what to choose without proper advice.


What to do

If you have a group RRSP that includes advice and regular reviews to ensure you are achieving your goals be grateful, you may be experiencing only the good. Even with these you should have an advisor look at what you have, to make sure it meets your overall needs and is included in your annual reviews


However, if are not getting that level of service, it would be a really good idea to share your group information with your financial advisor. Your financial advisor would be happy to help you make appropriate choices. Then include your group account in your annual review to make sure you are on track to meet your goals.