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.
What account types does the plan include?
The Common Good Plan is a group retirement income 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).
Do I get a tax deduction for the contributions I make to the Common Good Plan?
Contributions to a RRSP are tax deductible.
Tax receipts will be issued for all ongoing and one-time contributions to your RRSP. You will receive two tax receipts, one for all contributions made during the first 60 days of a taxation year and one for all contributions made during the last 10 months of the taxation year. These receipts will be made available in the “My Documents” section of your online account, accessible through the drop down menu at the top right corner.
Why do you require my Social Insurance Number when I join?
The Canada Revenue Agency (CRA) requires this information to set up the TFSA and RRSP and to report on TFSA and RRSP contributions and withdrawals, as well as RRIF payments. This information is kept strictly confidential and not shared with any person not associated with the plan setup and administration.
What will I receive from the Common Good Plan when I retire?
The plan will provide you with planning tools to assist you with developing a retirement income plan – converting savings to income in retirement and integrating various income sources, such as government benefits.
You’ll be able to access your Common Good Plan retirement income in a number of different ways. They include setting up a regular withdrawal based on a percentage of your assets and/or a fixed pension-like payment. You will also have the option to withdraw funds in a lump sum or through a transfer to another TFSA, RRSP, or RRIF.
How is the money I contribute to the Common Good Plan invested?
You can select from one of a series of BlackRock target date funds, which provide a mix of equities, fixed income, and real assets. The fund is matched to your expected retirement date, and the asset mix is automatically adjusted to become more conservative as you get closer to that date. Target date funds provide an investment solution that can reduce the complexity and stress of investing over time.
If you do not select a fund, your contributions will be invested in a default fund that is appropriate given the year you expect to retire under the plan. The default minimizes the risk of investment losses as you get closer to needing your retirement income.
Can you help me determine how much income I will need in retirement?
Common Good uses your current income to determine a target retirement income that will allow you to maintain your current standard of living as you enter retirement. We will help you understand how multiple sources of retirement income, including other savings, and eligibility for government benefits will help you reach that target. We then suggest a personalized savings plan to get you started today and stay on track over time (auto-escalation feature) in order to meet your retirement goals.
What are the fees?
As an eligible employee of a participating employer, you pay a fee of 0.6% of assets. For comparison, the average mutual fund fee in Canada is over three times higher at more than 2% per year. This low fee for Common Good can make a dramatic difference in how much money you save for retirement.
These are all-in fees and cover:
- Investment management
- Plan administration
- Custodial fees and other costs associated with running the plan
Your employer, as the plan sponsor, pays a fee of $10/month for each employee who is enrolled in the plan. This fee covers:
- Common Wealth’s digital retirement planning technology
- Employer service (e.g., onboarding, payroll deduction)
- Member service (e.g., inquiries, one-on-one member support)
- Education for you and your employees
If you join as an individual or leave your employer but remain in the plan, you pay a fee of 0.7% of assets and a $3/month membership fee.
Transaction and processing fees of $75 per transaction are charged for fund withdrawals or transfers out, and death and marriage breakdown processing. For non-sufficient funds (NSF) transactions, the fee is $40.
We don’t charge any fees to transfer existing RRSP or TFSA assets into the Common Good Plan, although the financial institution a member is transferring out from may have fees associated with the transfer of those funds.