Yes. Former employees can continue to participate in the plan.
If your contributions are made through payroll deductions, you will need to set up your banking information to continue to contribute to the plan after you leave your employer. You will also be charged a monthly administrative fee.
Can members choose to withdraw their funds out of the plan, even while they are still active employees?
Yes. Members can initiate a withdrawal of their plan assets, either in part or in full, while they are still an active employee. The same $75 transaction fee would be applied.
It’s important to remember that withdrawing from RRSPs before retirement can result in negative tax implications, while withdrawing from a TFSA before retirement does not.
What happens when an employee leaves our organization?
You can let us know when an employee has left the plan through an updated employee info file. One of the unique features of the Common Good Plan is portability. This means that members actually have options if/when they leave their employer:
- Members can keep their accounts with Common Good and even continue to contribute to them directly from their bank accounts. There would be a change in the fees and who pays them: members who leave their employer but continue with the plan would be responsible for a $3/month membership fee + 0.7% of assets under management. If there are any employer matching contributions, those would stop at this time.
- Members can also decide to cash out of the plan and move their money to another TFSA or RRSP account. Once a member initiates a withdrawal of all of their plan assets, they are no longer eligible to participate in the plan, and there is a transaction fee of $75 to complete each transfer.