Self-employed Individual - VRSP FAQ

Voluntary Retirement Savings Plans (VRSP)



Learn more about how VRSPs can work for you, by using the helpful resources on this page and reading the frequently asked questions (FAQs). For detailed information, visit the Régie des rentes du Quebec website.


FAQ


Why should I invest in a VRSP?
Who is eligible to participate in a VRSP?
How do I make contributions?
How much can I contribute?
Are my VRSP contributions locked in?
What's the tax treatment for contributions?
When can I start to receive retirement benefits?
What if I die?
What can I do with my VRSP contributions if I choose to leave the plan?
What happens if I make a withdrawal from my VRSP?
Who is responsible for administering the VRSP?
Who selects the investment options?

Why should I invest in a VRSP?
For many Quebecers, the major sources of retirement income are the Quebec Pension Plan (RRQ), personal savings and/or other sources of income and income from a workplace retirement savings plan. To date, self-employed and individual savers have had no way to participate in a low cost workplace retirement savings plan. The VRSP is a simple, affordable, tax-sheltered way for you to add to your retirement security.

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Who is eligible to participate in a VRSP?
Any individual, who resides in Quebec, may participate including those who are self-employed or employees whose employer has not subscribed to a VRSP.

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How do I make contributions?
Contributions are remitted to Sun Life on a monthly basis via Automatic Cheque Plan (ACP) and via lump sum contributions. Contributions will be invested according to your instructions. You can also transfer money from other registered plans into the VRSP.

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How much can I contribute?
Your contribution room is the lesser of:

  • 18% of your previous year's earned annual income, and 
  • the RRSP dollar limit for the year in which you are making your contribution. 

If you are already contributing to an RRSP or spousal RRSP, your contribution room will be reduced by the contributions you are making to those plans. Your contribution room is also reduced by the value of any benefits earned in the previous year under non-VRSP pension plans and deferred profit sharing plans.

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Are my VRSP contributions locked in?
Contributions will not be locked in.

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What's the tax treatment for contributions?
Contributions are deductible up to the same limit as an RRSP.

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When can I start to receive retirement benefits?
If you have stopped working, you can begin taking retirement income or postpone it until no later than the end of the year in which you turn 71.If you do not choose a retirement income option by that date, Sun Life will begin making annuity payments to you for life for a guaranteed minimum of 10 years. The amount of retirement income you receive will depend on your contributions, the investment income you earned and interest rates in effect at retirement.

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What if I die?
The money in the plan goes to your spouse. If you do not have a spouse, it goes to your beneficiary, and if there's no beneficiary, it goes to your estate.

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What can I do with my VRSP contributions if I choose to leave the plan?
You may leave the plan at any time. Your contributions, plus any investment income earned can be transferred to:

  • a RRSP
  • a retirement income fund (RIF)
  • another VRSP
  • a pension plan, if the plan permits
  • another life annuity, or
  • withdrawn as cash.

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What happens if I make a withdrawal from my VRSP?
Money you withdraw is included in your taxable income for that year and taxed at your marginal tax rate.

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Who is responsible for administering the VRSP?
Sun Life is the administrator of the VRSP, and will maintain the plan in accordance with applicable legislation.

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Who selects the investment options?
Sun Life determines the line-up of funds that you can choose from and invests your contributions according to your Instructions.

If you do not choose a fund on your application, your contributions will be invested in the default fund. The default fund is a series of target date funds which are segregated funds that automatically reduce risk as the investor approaches the target date – typically retirement. If you do not select a fund(s), your contributions will be invested in the target date fund with a maturity date just prior to your 65th birthday.

You may change your fund selection at any time by signing in to mysunlife.ca or by calling our customer care centre at 1-866-733-8612, Monday to Friday, 8 a.m. to 8 p.m. ET.

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Learn More

Quebec VRSP
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Contact Us at 1-866733-8612

Have a question?
Call us any business day between 8 a.m. and 6 p.m. ET, or send us an email at RVER@sunlife.com.

We're here to help.