Yes! The benefit of the Common Good Plan is that members have the option of contributing to a TFSA. There is no age restriction for contributing to a TFSA, which allows members over the age of 71 to contribute to the Common Good Plan. Even if employees are drawing down their RRIF contributions, they can still contribute to their TFSA. In addition, unlike RRIF requirements, there is no obligation to draw down TFSA funds.
What kind of arrangement is the Common Good Plan?
The Common Good Plan is a group retirement plan composed of a group Registered Retirement Savings Plan (RRSP), a group Tax-Free Savings Account (TFSA), and a group Registered Retirement Income Fund (RRIF).
What paperwork is required for joining the plan?
As the plan sponsor, you will be required to sign two agreements. The first agreement is a Sponsor Agreement with the Common Good Plan custodian, Canadian Western Trust Company (CWT). The agreement outlines the roles and responsibilities of each party. For example, it outlines that CWT is responsible for holding and safeguarding the assets of plan members and for maintaining the registration of the plan with the CRA.
The second agreement is a Service and Fee Agreement with Common Wealth, the plan administrator (and provider). This agreement details your responsibilities as the plan sponsor, as well as Common Wealth’s. For example, obligations related to communications, administration, fund access, fees, and privacy of information are outlined in the agreement.
What does it mean for the plan to have a fiduciary duty to plan members?
It means that Common Wealth, the plan provider, has to act in the best interests of plan members.
Who will oversee and manage the Common Good Plan?
There are a few different roles when it comes to managing the Common Good Plan:
Common Wealth is the plan provider. This means they provide and maintain a self-service platform, provide administration and recordkeeping services in respect of the Common Good Plan, support member communication and education sessions, and respond to member and employer inquiries.
Canadian Western Trust (CWT) is the custodian and trustee for the plan. They are responsible for holding and safeguarding the assets of plan members, as well as maintaining the registration of the plan with the Canadian Revenue Agency (CRA).
BlackRock is the investment provider and fund manager for the plan. Plan members can invest their contributions by selecting one of BlackRock’s nine target date funds.
What if we want to join the Common Good Plan, but are currently offering a group retirement program through someone else? Can you help us switch?
Our team can definitely help you with that. We can work with your team to understand your current plan and come up with a strategy for switching.
Do we need a minimum number of employees participating in the plan in order to be able to join as an employer?
No.
Is the plan beneficial for employees at all ages and earnings levels?
Yes! The Common Good Plan is designed for all Canadians. The plan makes it as easy as possible for every member, regardless of their age or income level, to get on a path to retirement success and stay on track. The plan supports this goal through saving and investment strategies and options, low fees, plan portability, and tax and government benefit optimization.
Is the plan only available to employees? What about non-standard workers (e.g., contractors, gig workers) or spouses/common-law partners of members?
The plan is available to all full- and part-time employees of an employer. Non-standard workers are eligible to join the plan through an association, not an employer, and would cover their own monthly membership fee. The plan is also open to spouses/common-law partners of an employee, and they would cover their own membership fee.
Can employees over age 71 still enroll in the Common Good Plan?
Yes! The benefit of the Common Good Plan is that members have the option of contributing to a TFSA. There is no age restriction for contributing to a TFSA, which allows members over the age of 71 to contribute to the Common Good Plan. Even if employees are drawing down their RRIF contributions, they can still contribute to their TFSA. In addition, unlike RRIF requirements, there is no obligation to draw down TFSA funds.