What happens to a member’s existing TFSA and RRSPs?

The government allows people to hold multiple TFSA and RRSP accounts. This means that it’s up to each member to determine what happens to any other TFSA or RRSP accounts they hold. They can choose to transfer all of their funds into their new Common Good account (done directly within the platform) or keep them where they are.

If a member wishes to consolidate their RRSP and TFSA savings in the Common Good Plan, they can initiate a transfer from their online account, and our team will take care of the rest. A direct transfer has no impact on your contribution limits or tax implications.

Do members get a tax deduction for their contributions to the Common Good Plan?

Contributions to an RRSP are tax deductible. 

We will issue tax receipts for all ongoing and one-time contributions to the RRSP. Members 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.

Contribution receipts are available in a member’s online account in the “My Document” section.

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.

How are the Common Good Plan funds invested?

Plan members 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 each plan member’s expected retirement date, and the asset mix is automatically adjusted to become more conservative as they get closer to that date.

What help is available to employees to determine how much income they will need in retirement?

Common Good uses a member’s current income to determine a target retirement income that will allow them to maintain their current standard of living as they enter retirement. We help members understand how multiple sources of retirement income, including other savings, and government benefits will help them reach that target. We then provide members a personalized savings plan for today and over time (auto-escalation feature) in order to meet their retirement goals.

What are the fees?

You, as the plan sponsor, pay 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

Members 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 the Common Good Plan can make a dramatic difference in how much money members save for retirement. These are all-in fees, which cover: 

  • Investment management 
  • Plan administration
  • Custodial fees and other costs associated with running the plan

Members who join as individuals, or leave their employer but remain in the plan, 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.

Who can join the Common Good Plan?

This plan is meant for all! This means that anyone who works for a Canadian employer who has joined the plan is eligible to join as a member.

There is no maximum age limit to join the Common Good Plan, although members cannot contribute to a TFSA if they are under 18 years old. Members can contribute to an RRSP as long as they have available contribution deduction room or until December 31st of the year they turn age 71. 

Members must be Canadian residents for tax purposes in order to join the plan.

What is the purpose of the Common Good Plan?

The Common Good Plan was established to enhance Canadians’ financial security and designed to help make saving for retirement easier and more affordable through a high-quality, nationally portable arrangement.

What is my role in supporting the Common Good Plan?

As the sponsor of a Common Good Plan, you would be responsible for: 

  • Supporting Common Wealth, the plan provider, with the distribution of plan materials
  • Working with Common Wealth to facilitate employee education sessions
  • Providing Common Wealth with an up-to-date file of eligible employees, including information to support payroll deduction processing
  • Providing Common Wealth with a payroll file that contains member and, if applicable, employer contribution details and remitting contributions to the custodian, Canadian Western Trust

How is this plan different from other options in the market?

The Common Good Plan is a portable savings program designed to make retirement easier and more affordable for Canadians, regardless of their age. By combining group purchasing power, digital technology, and world-class retirement research, the plan has the potential to deliver up to 3x the value for money of a typical individual approach to saving for retirement. 

While most investment options on the market focus on accumulation of assets, the approach for the Common Good Plan is based on monthly retirement income. The plan does all of this with lower fees and a legal duty to administer and manage the plan in the plan members’ best interests.