What are my options?

Since 2014, many small and medium-sized enterprises (SME) in Quebec are required to offer a workplace retirement savings plan to their employees. Are you affected by this law?

A VRSP is only one of the many options available to small business owners in Quebec. There are other plans that might be better suited to your company than a VRSP.

The options below will help you maximize the advantages of having employees who are in better physical and financial health.

Type of plan Voluntary Retirement Savings Plan (VRSP) Registered Retirement Savings Plan (RRSP) Tax-Free Savings Account (TFSA) Deferred Profit Sharing Plan (DPSP)
Advantages
  • No impact on total payroll
  • Low managerment fees
  • Quick and easy to set up
  • Flexibility
  • Savings can be used for something other than retirement
  • A range of investment options
  • Allows employees to share the profits of the company
  • Contribution level may vary according to company profitability
Some things to consider
  • Limited investment options
  • Less flexibility
  • Available only in Quebec under VRSP legislation
  • Higher management fees
  • May not be offered on its own
  • Employee contributions are not permitted
Eligible employees
  • 18 years of age or over
  • + 1 year uniterrupted service
  • + work solely in Quebec or work both in Quebec and outside Quebec for a Quebec employer or who are residents of Quebec and work outside Quebec for a Quebec employer
  • Employers choice
  • Employer's choice + 18 years of age or over
  • Employer's choice.
  • Partners and specified shareholders (persons owning 10% or more of the issued shares of the coporation) and their immediate relations are not eligible.
Employer contributions
  • Employer contriubtions not required. Any employer contributions are not subject to payroll taxes.
  • Employer contributions not required. Payroll taxes apply to any employer contributions
  • Employer contributions not required. Any employer contributions are considered contributions made by the employee with after-tax dollars. Payroll taxes and income tax apply to any employer contributions.
  • Employer contributions only and not subject to payroll taxes
Employee contributions
  • Before tax income up to the applicable contribution limits + Default rates as applicable according to legislation
  • Before tax income up to the applicable contribution limits
  • After tax income up to the applicable contribution limits
  • Not permitted
Compliance with VRSP Act
  • Yes, if offered to all eligible employees through payroll deductions
  • Not when offered on its own
To know more Fact sheet Support tools for small business owners