Registered Pension Plans
Group RRSPs
DPSPs
As group RRSPs are, in the eyes of the regulators, simply a collection of individual RRSPs, there are no specified guidelines for funding vehicles. Any issuer of an RRSP can operate a group plan if they can provide the investment disclosure information required by regulators and levels of administrative reporting that are normally requested by the employer who sponsors the Group plan.
Insurance Company Products
Insurance company Group RRSPs are funded through group contracts that have been pre-registered with Revenue Canada as specimen plans. The same insurer may have pre-registered more than one specimen plan in the event that they offer different administered arrangements to meet customer demands. These contracts are viewed as annuity contracts, with the option for funds to be directed prior to maturity to the guaranteed investments and segregated funds that the insurer offers. The disclosure requirements regarding investment options are minimal when this type of contract is used.
Qualified Investments
RRSP monies must be held by the issuer in "qualified" investments. These include:
- money that is legal tender in Canada, and deposits within the meaning of the CDIC Act.
- Bonds, debentures, notes, mortgages, hypothecs, or similar obligations, issued by or guaranteed by Canada, a province pr municipality in Canada, or of their agents, or of an educational institution or hospital if guaranteed by the province.
- Shares and debt obligations of corporations whose shares are listed on a prescribed stock exchange in Canada.
- GIC's of a Canadian trust company an annuity insurance policies where the trust is sole beneficiary, and certain other requirements are met.
- certain investment contracts issued by corporations approved by the Canadian government
- shares listed on prescribed stock exchanges outside Canada
- shares of the capital stock of certain public corporations
- units of a mutual fund trust
- an annuity insurance policies where the trust is sole beneficiary, and certain other requirements are met.
In addition a special tax will be imposed on foreign property held in excess of 20% of the cost amount of the plan's assets.
Suggested Reference Materials
Revenue Canada Interpretation Bulletin IT-32OR "RRSP Qualified Investments".
