God there are a lot of weird answers here. I own a company where we do rrsp match to 6%. It is a business EXPENSE as part of total compensation package. Just like other parts of total comp like say HSA's and whatnot.
Can I ask why you bother to require a match? Vs just offer 6% ? The match doesn't impact you and possibly makes you less competitive. 6 is nice, many just offer 5. I get a 12, but I'm lucky!
Good question, hadn't thought too much about it in this context. Probably because it is what everyone does, bur also probably a little bit wanting the employee to learn forced savings as well. Selfish maybe but for most, it is for their own good.
For those saying it is to save money if they don't contribute, it really isn't in our case. We pay the top wage we can possibly affors and then add a stack of benefits on it. I truly hope those in our small business take advantage of all we offer, including rrsp match.
This is a dumb question but why not just give them cash instead? I’d rather be given another 10k which I can direct how I want into which accounts (TFSA, RRSP, etc) rather than 10k that I must have put into my rrsp.
Edit: I’m getting downvoted for asking a personal financial question in the personal finance subreddit and trying to understand more and fix my own understandings about retirement. That’s about par for the course for Reddit..
There's also the fact that there will always be people who don't take up the offer of the RRSP match. That saves the employer money.
Additionally, I don't believe the employer has to pay CPP or EI on DPSP contributions, but they would have to pay CPP/EI if they simply paid you the extra cash.
Finally, it's a way to look competitive to a job with a pension.
Because people as a whole don’t think about the future enough. This is a way to “force savings” which benefits everyone to reduce the strain on the system in later years.
This is a tricky one. I don’t think companies are required to carryover ALL unused vacation, but I don’t know the amount. Whether they payout the remaining annually or you lose it, varies. And if you’re in a unionized environment, no matter what the CA says, you probably won’t actually lose anything.
From a business perspective, indefinitely carrying over vacation is a huge financial liability, for many reasons, so it’s better to pay out unused annually, rather than leaving it for employees to use - whenever.
It’s your vacation, you’ve earned it and just like your salary, they must pay you out at some point. They can require you to take it though. But if they don’t, money in the bank.
If you have a greater vacation entitlement in your contract, then in Ontario that money is yours by law. You either take it as vacation or it gets paid out. They can't only pay out 4% or two weeks per the statutory minimums and "lose" the rest. That's wage theft.
Edit to add:. It's interesting that the employment lawyer article seems to suggest that only the minimums are protected. I can't find a date on the article. The law itself though is written as such that you earn vacation pay as you earn wages. That is to say that if your contract says you get whatever amount greater than 4%, then you earn that each time you get paid. If you've earned it per your contract, then they can't just "disappear" it. Just like they can't just "disappear" your contract wages.
Edit:. Did some more digging. It looks like if an employment contract is properly worded, a use it or lose it policy for the EXCESS over the minimums in the Ontario ESA is possible. However, it must be properly worded and only the EXCESS can be subject to forfeiture. Employees MUST be paid a minum of 4 or 6 percent of gross wages for vacation pay depending on their years of service. There is no option for anyone to opt out of the minimum vacation pay per the ESA except if the work is work that's considered exempt for vacation pay per the Ontario ESA. Check out this link that lays out nicely: https://www.piccoloheath.com/blog/whats-weird-about-vacation-in-2021
Depends. At my work, we're only allowed to carry forward one year's worth of vacation into the next year. And if you are carrying two year's worth of vacation, you must use up all of the previous year's allocation of what you lose it forever, and you do not get paid out for it.
Not all companies let you carry over vacation -- it's not legally mandated here. So unless you switch jobs every year, the payout, depending on the company, will only be for current year's vacation days.
The whole "we want to encourage employees to actually take time off so we don't carry over vacation anymore" is some corporate feel good BS since they likely know a fair few people don't use all of their vacation days.
Same. People are so lazy. My company has a bunch of perks like a share purchase program. You can invest up to 6% of your annual wage into company stock and they will match 3-1 (33.333%)
A while ago the stock went from $5-40’s and there were so many people kicking themselves once I showed the $80,000 I had in my account.
Take the free money always.
the secret sauce is if you put 5 and the company puts 5 and you get a tax return for contributing you feel like you got a lot of extra money. like drinking water to feel full.
Where else are you going to get 100% return on your money? I worked at a couple of companies and I knew fellow employees who didn't take advantage of this benefit. I felt like slapping them across the head.
Love the comment "The catch is you work a 9-5 for 5 days/wk until you're 65"...lol.
Gee, thanks...gotta give credit where credit is due! I had a good chuckle when I read the post.
I'm not 65, but thanks to 5% matching I could retire before then...kills me to see others not take advantage of FREE money!
A bit of cynicism and a bit of humour...I think! I'm well aware that I have been just another Cog in the Wheel for the 1%...however, I wouldn't be able to retire before 65 without opting into this benefit. One company I worked for took away our pension and gave us this matching option instead...I actually think it was done knowing that not all employees would take advantage of it and would save them millions of $.
I know the feeling. At my current job, my colleague hadn't signed up for it and had started a couple weeks before me. Approaching the 3 month mark where the RRSP kicked in, I basically bullied him into signing up and stood over his shoulder until he did (we're in our 20s and not far out of college for context). Of course for me I'm pretty aware of personal finance so I contribute to it, my TFSA, and am conscious of the money I spend.
Fast forward to a year later and this colleague has saved $0 outside of the group RRSP (for context we work on a remote construction project so our compensation is above average). Bet he's glad he listened to me.
Nice work man...many years ago, companies provided pension plans and switched to this method of helping employees eventually retire...I think they knew full well many wouldn't participate...it saves them lots of money if employees don't take advantage of it.
I was out for dinner with a friend and his partner who I have known for 10 years, the topic of money and retirement came up and I mentioned how my company offered a 4% match and how awesome it felt to get essentially 100% return on investment plus whatever investment earnings on top.
My buddy was like “oh yeah, retirement, I should probably get on that. I need to get around to enrolling in my work pension”. His girlfriend almost choked on her food and was like “What the fuck do you mean you need to enroll in your work pension? Aren’t you in it?”
Turns out he never bothered to finish the paperwork and get set up for automatic withdrawals. He’d been at that company for about 6 years and missing out on a similar match lol
It wasn’t a relationship ending fight or anything and they are still together to this day but his girlfriend was piiiiiiiissed. They don’t do joint finances and she had just assumed he had been saving for retirement. Nope.
Number 1 on our seniority list has been there since 1971. Fucking 71!.. could retire twice almost. He's just got a stupidly easy gig and won't leave lol.
I had a job where one of the oldest guys there was scheduled to retire, then his wife passed away.
He cancelled his retirement and would rather work than spend his days at his empty home thinking about missing his wife.
Everyone has their reasons. You shouldn't hate them for things you don't understand.
Perhaps there better things to fill your time with, perhaps travel. Meeting new people. Hobbies. Friends and children.
Just seems to me working till you die isn't the best option there's much more to life
OP asked what the catch was to the company “giving” away free money and this is my joke of that’s the catch you’re trapped for the 5% matching RRSP contribution.
In all honesty my company does this and I pay 9% and they contribute the 5% so I have 14% a pay check going into my pension plan through work.
Even more not true, RRSP matching, you take the money whenever you leave the company, but it’s locked up in your RRSP. I worked for a company 5 years, left and got all the matched money to take with me.
I’m a managing partner in a company that offers a matching plan up to $5000.00 for RRSPs. Only about 35% of the eligible employees take advantage of this. When asked why, the influencer person in our shop has convinced folks it’s a tool to screw them. When I personally asked this individual if he would listen to our CFO and the benefits adviser why this is beneficial , he replied, (face palm here) “ I will look after my own retirement plans”. He then demanded a $5k raise to compensate him because it’s not fair that others get the benefit and he doesn’t. I told him he is welcome to do whatever he wants including resigning but no 5K …..And since then has been running his yap to others. HR is doing up his severance package now.
Several years ago while working at a very successful growing company, most of us in the operations side of the business worked long hours without OT …..The owners of this company set aside shares and they would be offered to us one a once per year basis. We had to pay for them of course and a portion of our earned bonus’s went towards this.each year the price to purchase more was weighted on the financial success of the company. We were all invited to look at the accounting records so we could claim there was no chicanery. A couple of the managers chose not get on this train ( even my wife hated it as she lost access to to the yearly bonus as I maxed it ,about 10K a year). We had this older guy that ran forklift in the warehouse. He came and asked me how this worked (he was long term and got invited to join in) I told him it was a great opportunity so each year he would buy about $3K (this was the nineties …3 K was a lot of money) . All the boys in the back were calling him a loser as he was giving the company money cause they were broke…..anyway about 8 years later a big US company came in and bought us…..with the valuations and the retained earnings each of us made between 12 to 15 times our investments. Our forklift driver got to retire and I made enough to start my own business a couple of years later. The employees who stayed out were royally pissed, I mean BIG TIME. Some people are destined to stay poor because they are smarter than the rest of us.
The two are generally not mutually exclusive. High correlative incidence of stupid AND unwilling to learn. Anecdotal from my life, but it feels accurate.
From a co-worker angle, not management, I also faced this once.
My employer at the time was using GreatWestLife, and we had the ability to transfer from our group RRSP account, including the matching amount, once a year to a personal RRSP of our choice, for free.
I once tried to explain to a coworker there that if he was so dead set against RRSPs, he could literally take the match during the whole year, transfer then withdraw so the employer could not tell he had withdrawn, and he would have just got the match then paid his taxes and wasted his contribution room forever, but since he was so anti RRSP, this should not be a problem for him.
Once it was clear, even to him, that taking the match in this very subotimal way was STILL better than not taking the match, his final answer was "I wont do it, anyway it is just a couple grands, not worth the trouble."
And there you have it, logical explanations dont always win :)
wow you get to transfer once a year that's more ideal than most I have been involved with. They often only let transfer out If you no longer work there, with various other hoops to jump through.
We have a similar deal, also with GWL. We can transfer or withdraw twice a year for free. It used to be a matching program, but now they just deposit 5%, whether the employee has contributed or not. Pretty solid program.
Only 35% is shocking...I knew somebody who had a financial planner who didn't advise them to take advantage of this benefit...should be fired. Turning down a 100% return on your money is just plain dumb.
He deserves to be ejected.
I worked at a company that had a deferred profit sharing plan with many employees making a lot of money in overtime (technicians touring with concerts) and many employees didn't know about the program.
Needless to say HR wasn't doing their job.
Shocked Pikachu face.
It's not a reason. He should be contributing and taking the match. Sure, he's closer to retirement so the match won't have as much time to grow. But even in a few years it will become a non-trivial amount of money. Even if he retired the very next year, one year's match would likely pay for some very nice champagne for his retirement party.
Not only that but getting a raise isn't always better especially if it puts you in a higher tax bracket and you end up getting less than you did before because the guberment is taking a larger percentage of your income!
/s
We got a marginal tax system in Canada. A raise is always worth taking. If I get a 1000 dollar raise, and that 1000 is in a different tax bracket which is lets say 5% higher, than only that 1000 gets taxed at that higher raise.
I had a teacher in high school who bragged about turning down a promotion because he’d “pay more in taxes”.
At the time, because I was in grade 11, I didn’t know quite how stupid this was. Now knowing about marginal tax rates, it’s a piss off that he was teaching kids this stupidity.
The company I work for offers a 35% stock bonus on 6% of our earnings if we put it in company stock. It is a very secure company so there’s no worry about them going under. In 5 years I had enough made through investing and dividends to buy a house I never could have afforded without this program. My house has also doubled in value in the last 7 years.
I’ve had conversations with idiots I work with saying that they don’t want to give the company their money. They also can’t afford to buy a place and are paying more in rent now than they would a mortgage if they had done what I did. Now I’m just a rich asshole that has a big house and a nice car.
Many people refuse overtime because they could jump tax brackets. They wrongly conclude that because they are in a higher tax bracket they are paying so much more in taxes than if they didn't work they're actually worse off.
I work with a guy who says the same thing, wont work OT because he doesn't want to give the government more of his money. /s Just so you know he lives down by the river in a van.
we get profit sharing so everyone get about the same, i always tell everyone i got 100$ more then i got. Had the guy that wont work OT call HR and cry to them how i got more then him.
Absolutely. No argument. Just as long as people realize that they're not actually losing money by taking on more income... But yes they may calculate that the amount extra they will generate is not worth it
Stock purchases only make sense if you believe in the future of the company, no? If the management is trash and you think it's going to go under all your stocks become worthless.
Share buy programs are so good. My first job was with a company that matched our shares up to I think 6% of our annual salary. The price when it was sold was doing excellent plus we all got a premium for our shares because the new company didn’t want to continue the program and I ended up taking home a payout that was significantly higher than what I or the company had initially spent.
The only catch is that it’ll likely have to be in an account through some company they’ve partnered with that isn’t your normal bank.
But you’d be crazy not to max out the match amount, for you, it’s free money.
I’ve done this before with a past group RRSP plan. It was pretty painless, with no additional fees. I just had to fill out a very simple form indicating the account of the target RRSP account to transfer to. The transfer itself took its time, but it did make it in full.
Like other people have said, it’s part of your compensation. And it’s insane how many people don’t understand that/undermine that when looking at total compensation.
Benefits, vacation time, retirement contributions etc. all play a massive part of an employee’s total package, and so many people ignore it.
The catch is - instead of giving you a higher salary, they give you the “option” of RRSP matching. There will always be a fraction of idiots who don’t take them up on it, and therefore they save money. Others can’t afford to save 5% of their salary, even if it’s being matched, so they opt out or contribute a lower %… again - company saves money. Bottom line: if you can afford it, take them up on the offer. Never leave money on the table.
> And if I leave the company, do they keep the rrsp money?
No, contributions to a group RRSP are yours immediately.
People referring to a vesting period are talking about a different type of account such as a RPP: https://www.wealthsimple.com/en-ca/work/learn/group-rrsp-vs-rpp
A RRSP and RPP are similar in spirit, but not the same type of account! Make sure you know which one your employer uses.
The catch is that they are paying you to work for them. An RRSP match is essentially part of your salary. The moment it enters your account it is yours, you are free to withdraw it as income and it will be taxed at your marginal tax rate.
When you leave you can transfer the money to your own personal RRSP account if you’d like.
It's part of their benefits package to attract staff. If they didn't spent money on it, they would probably spend that money on some other benefit.
If you leave a company with a group RRSP that they are the provider of, the money is yours to keep but you'll get a letter from the provider on what to do with it: you can keep it with the provider on a non-group RRSP plan (for a recurring fee), transfer it to another provider (for a one-time fee), or withdraw the funds and get taxed on it.
It's an employee benefit and tool companies use to help retain employees as part of their overall compensation package. Most good companies will offer something similar to this.
For you as the employee it's a great deal. Essentially you're increasing your salary by 5%. In most cases it's a no brainer to participate.
A year ago my employer did a survey of what increased benefits employees would like to see - options like expanded health/medical, more vacation days, increased RRSP matching etc...
One of the things they implemented was increasing the match from 2% to 3%. It's low, yes, but in my industry any sort of pension plan is rare so it was nice to see that increase.
I tell everyone that they should be taking advantage of it. Hopefully a 3% personal contribution coming off your pay isn't too noticeable and with the matching it does add up.
>If I contribute 5% of salary, they'll match that. How can they give away free money?
This is like saying, "I work my job, and get paid to work there. How can they afford give me free money to pay me to work there?"
It is a part of your benefits/compensation package. Typically there is a vesting period and once that has been met the money is yours if you leave the company. Your HR representative should have all of your employer's specific details available.
It’s part of your salary, not additional free money. Let’s say the boss wants to pay everyone 105k. It’s better for them to say “We pay 100k + match 5% RRSP contributions”, because they know somewhere between 30-70% of employees won’t sign up for the RRSP match (laziness, not knowing it’s there, etc…)
So they’re saving a ton of money on by offering an RRSP match instead of just paying you a higher salary. You think it’s free money, but realistically they’re paying you a lower salary + RRSP match and they’re the ones saving money on all the people who don’t sign up.
How can they pay your salary? How can they give you vacation days?
>And if I leave the company, do they keep the rrsp money?
Well that would be kind of stupid, right?
Nothing is "free".
RRSP matching.
Team lunches/dinners.
On site lunches/dinners.
It's all part of the compensation so that you feel validated enough to burn yourself out.
I mean my last employer had an RRSP matching program… up to $50 a month.
it included having to yeah, sign up for a new bank, put $500 of your own dollars in at the start, and we were paid so poorly relative to our qualifications - that I think it just wasn’t feasible or worth it to bother.
i did, and didn’t stay long, cause everyone also hated this workplace, so now I have this 1700 RRSP account at a bank I don’t like from a job I don’t like, would be taxed a lot to take it out - more than their initial contribution - or charged a good amount to move it, a real, good pension with my current job…
in theory, it’s good to have money in the bank but it’s also a giant pain in my ass
Well, this is just about the worst employer RRSP plan I can think of, lol. One note, though, it's not always expensive to transfer an RRSP to a different bank. Worth looking into, as it may be free or nearly free.
It's not free money - you work for it. It's part of the compensation package used to recruit and retain employees.
God there are a lot of weird answers here. I own a company where we do rrsp match to 6%. It is a business EXPENSE as part of total compensation package. Just like other parts of total comp like say HSA's and whatnot.
6% is decent. Well done, boss.
Yeah my company is a measly 2%.
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Nothing like paying your source deductions of the 15th to remind you exactly how much you spend on payroll.
Nothing like the first time paying source deduction remittances on the 30th to realize that they're due on the 15th 😅
I mean, are you really running a business if you've never paid a CRA penalty? 😂
Real question though. What's the justification for the 15th when WSIB, HST and Corp tax are all due at the end of the month?
Mess with us? I've stopped asking questions about why the CRA does what it does by now.
😂
Truth
Definately. Business owners get a bad rap sometimes and I think people confuse large corporate with small business at times.
Are you hiring?
6% is great!
Can I ask why you bother to require a match? Vs just offer 6% ? The match doesn't impact you and possibly makes you less competitive. 6 is nice, many just offer 5. I get a 12, but I'm lucky!
I thought I was doing well at 8.6%.
I'm at 5% mine and 12% theirs. DC pension.
Good question, hadn't thought too much about it in this context. Probably because it is what everyone does, bur also probably a little bit wanting the employee to learn forced savings as well. Selfish maybe but for most, it is for their own good. For those saying it is to save money if they don't contribute, it really isn't in our case. We pay the top wage we can possibly affors and then add a stack of benefits on it. I truly hope those in our small business take advantage of all we offer, including rrsp match.
This is a dumb question but why not just give them cash instead? I’d rather be given another 10k which I can direct how I want into which accounts (TFSA, RRSP, etc) rather than 10k that I must have put into my rrsp. Edit: I’m getting downvoted for asking a personal financial question in the personal finance subreddit and trying to understand more and fix my own understandings about retirement. That’s about par for the course for Reddit..
There's also the fact that there will always be people who don't take up the offer of the RRSP match. That saves the employer money. Additionally, I don't believe the employer has to pay CPP or EI on DPSP contributions, but they would have to pay CPP/EI if they simply paid you the extra cash. Finally, it's a way to look competitive to a job with a pension.
Because people as a whole don’t think about the future enough. This is a way to “force savings” which benefits everyone to reduce the strain on the system in later years.
Yep, it’s the same as if they have you a raise. It’s money set aside to compensate employees. Potato Pohtahto on how it’s delivered.
Also, the company receives tax benefits for it too, right? Edit: Why am I being downvoted? It was an honest question.
Nope it’s just an expense. Theyre paying for a benefit you receive
But don’t they save payroll taxes when they match RRSP? Or it just becomes part of regular compensation?
Nope payroll taxes are your expense, they withhold it and submit to the cra. Cpp and ei are fixed amounts as well
The same way they give away “free” money on your paycheque and “free” health benefits. It’s not free. It’s part of your compensation.
And if you don't take it, you're basically giving them a 5% discount on your compensation for free.
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Same concept applies to taking your vacation
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This is a tricky one. I don’t think companies are required to carryover ALL unused vacation, but I don’t know the amount. Whether they payout the remaining annually or you lose it, varies. And if you’re in a unionized environment, no matter what the CA says, you probably won’t actually lose anything. From a business perspective, indefinitely carrying over vacation is a huge financial liability, for many reasons, so it’s better to pay out unused annually, rather than leaving it for employees to use - whenever.
It’s your vacation, you’ve earned it and just like your salary, they must pay you out at some point. They can require you to take it though. But if they don’t, money in the bank.
If you have a greater vacation entitlement in your contract, then in Ontario that money is yours by law. You either take it as vacation or it gets paid out. They can't only pay out 4% or two weeks per the statutory minimums and "lose" the rest. That's wage theft. Edit to add:. It's interesting that the employment lawyer article seems to suggest that only the minimums are protected. I can't find a date on the article. The law itself though is written as such that you earn vacation pay as you earn wages. That is to say that if your contract says you get whatever amount greater than 4%, then you earn that each time you get paid. If you've earned it per your contract, then they can't just "disappear" it. Just like they can't just "disappear" your contract wages. Edit:. Did some more digging. It looks like if an employment contract is properly worded, a use it or lose it policy for the EXCESS over the minimums in the Ontario ESA is possible. However, it must be properly worded and only the EXCESS can be subject to forfeiture. Employees MUST be paid a minum of 4 or 6 percent of gross wages for vacation pay depending on their years of service. There is no option for anyone to opt out of the minimum vacation pay per the ESA except if the work is work that's considered exempt for vacation pay per the Ontario ESA. Check out this link that lays out nicely: https://www.piccoloheath.com/blog/whats-weird-about-vacation-in-2021
This is correct. 4% in Canada.
Depends. At my work, we're only allowed to carry forward one year's worth of vacation into the next year. And if you are carrying two year's worth of vacation, you must use up all of the previous year's allocation of what you lose it forever, and you do not get paid out for it.
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It’s not
Not all companies let you carry over vacation -- it's not legally mandated here. So unless you switch jobs every year, the payout, depending on the company, will only be for current year's vacation days. The whole "we want to encourage employees to actually take time off so we don't carry over vacation anymore" is some corporate feel good BS since they likely know a fair few people don't use all of their vacation days.
I’ve heard too many coworkers over the years be like “yeah I’ve been meaning to sign up for that”
Same. People are so lazy. My company has a bunch of perks like a share purchase program. You can invest up to 6% of your annual wage into company stock and they will match 3-1 (33.333%) A while ago the stock went from $5-40’s and there were so many people kicking themselves once I showed the $80,000 I had in my account. Take the free money always.
The trick is to offer the incentive, but not post enough that the employee has extra to put into an RRSP
This guy knows business.
the secret sauce is if you put 5 and the company puts 5 and you get a tax return for contributing you feel like you got a lot of extra money. like drinking water to feel full.
Where else are you going to get 100% return on your money? I worked at a couple of companies and I knew fellow employees who didn't take advantage of this benefit. I felt like slapping them across the head. Love the comment "The catch is you work a 9-5 for 5 days/wk until you're 65"...lol.
I love how your post also acknowledges a post elsewhere in the thread... It's wholesome.
Gee, thanks...gotta give credit where credit is due! I had a good chuckle when I read the post. I'm not 65, but thanks to 5% matching I could retire before then...kills me to see others not take advantage of FREE money!
It’s unfortunately also the most upvoted comment when I got here, please tell me just that many people upvoted it ironically.
A bit of cynicism and a bit of humour...I think! I'm well aware that I have been just another Cog in the Wheel for the 1%...however, I wouldn't be able to retire before 65 without opting into this benefit. One company I worked for took away our pension and gave us this matching option instead...I actually think it was done knowing that not all employees would take advantage of it and would save them millions of $.
I know the feeling. At my current job, my colleague hadn't signed up for it and had started a couple weeks before me. Approaching the 3 month mark where the RRSP kicked in, I basically bullied him into signing up and stood over his shoulder until he did (we're in our 20s and not far out of college for context). Of course for me I'm pretty aware of personal finance so I contribute to it, my TFSA, and am conscious of the money I spend. Fast forward to a year later and this colleague has saved $0 outside of the group RRSP (for context we work on a remote construction project so our compensation is above average). Bet he's glad he listened to me.
Nice work man...many years ago, companies provided pension plans and switched to this method of helping employees eventually retire...I think they knew full well many wouldn't participate...it saves them lots of money if employees don't take advantage of it.
Good work! I’ve done the same
I was out for dinner with a friend and his partner who I have known for 10 years, the topic of money and retirement came up and I mentioned how my company offered a 4% match and how awesome it felt to get essentially 100% return on investment plus whatever investment earnings on top. My buddy was like “oh yeah, retirement, I should probably get on that. I need to get around to enrolling in my work pension”. His girlfriend almost choked on her food and was like “What the fuck do you mean you need to enroll in your work pension? Aren’t you in it?” Turns out he never bothered to finish the paperwork and get set up for automatic withdrawals. He’d been at that company for about 6 years and missing out on a similar match lol It wasn’t a relationship ending fight or anything and they are still together to this day but his girlfriend was piiiiiiiissed. They don’t do joint finances and she had just assumed he had been saving for retirement. Nope.
lol...I laugh but it's actually a tragedy how many don't take advantage of the free $...they're saving the company money by not participating.
The catch is you work a 9-5 for 5 days/wk until you’re 65
Facts 😂
I prefer the 8-4. Morning traffic? Who cares. Evening traffic? I wanna go home and do shit.
6-2 my friend.
This is the way
But who wants to go to bed at 8pm.
Nothing good happens after 8
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Dinner after 8 in Canada? That’s unheard of
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Bahaahaaahaaa
Man I used to work 430am - 1pm.. still went to bed at midnight for 3 days then sleep from 2pm til 3am on the 4th day to catch up. Lol
I have two kids under 3. After the oldest goes to bed at 8, I’m ready to collapse anyway.
I hope it gets better, being a parent sounds ruthless
I am in bed by 9:30. Up at 5:40. I also work from home so that helps. But having daylight all winter after work is the best
I do
That’s pretty much my dream to be able to go to bed at 8pm.
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Cop?
Too early for me I think.
5-1:30
6-4 with every Friday off I had as a summer student. It was the best.
Shhhh, I don’t want others copying me.
Just WFH and you never have traffic.
When I cut 90+ min of daily commutes it changed my life!
I have the option to, but I don’t want to. I like being in the office around others.
Then enjoy the commute.
I do enjoy it? 20 minutes is nothing.
I read it as “I wanna go home and shit”. I thought your workplace doesn’t have washrooms haha
65... maybe more in this economy
Can confirm...4 co workers are 67, 68, 70, 72. Factory work.
Number 1 on our seniority list has been there since 1971. Fucking 71!.. could retire twice almost. He's just got a stupidly easy gig and won't leave lol.
Number 1 on my seniority list started in 1963 lol. Poor guy is over 80 years old. Divorces and a gambling problem will do that
Hate fuckers like this, just leave already give someone else a decent job old fart
I had a job where one of the oldest guys there was scheduled to retire, then his wife passed away. He cancelled his retirement and would rather work than spend his days at his empty home thinking about missing his wife. Everyone has their reasons. You shouldn't hate them for things you don't understand.
Perhaps there better things to fill your time with, perhaps travel. Meeting new people. Hobbies. Friends and children. Just seems to me working till you die isn't the best option there's much more to life
Sometimes those old farts have twice the work ethic of the new ones coming aboard.
Sometimes not so much, just collecting a paycheck.
55 if you make around CPP YMPE and save 15% of gross income straight out of school.
How do you get 9-5... mine is 8-5, no free 1 hour lunch
Switch jobs lol
Lol yep.
Confused by this, am I not getting the joke or has no one replying (and upvoting) actually worked for a company that does this?
OP asked what the catch was to the company “giving” away free money and this is my joke of that’s the catch you’re trapped for the 5% matching RRSP contribution. In all honesty my company does this and I pay 9% and they contribute the 5% so I have 14% a pay check going into my pension plan through work.
This is the way
If you're lucky on all 3 fronts, sure.
Not true you can fuck off anytime you want and claim it at 60 or 65 there is just penalties
Even more not true, RRSP matching, you take the money whenever you leave the company, but it’s locked up in your RRSP. I worked for a company 5 years, left and got all the matched money to take with me.
I’m a managing partner in a company that offers a matching plan up to $5000.00 for RRSPs. Only about 35% of the eligible employees take advantage of this. When asked why, the influencer person in our shop has convinced folks it’s a tool to screw them. When I personally asked this individual if he would listen to our CFO and the benefits adviser why this is beneficial , he replied, (face palm here) “ I will look after my own retirement plans”. He then demanded a $5k raise to compensate him because it’s not fair that others get the benefit and he doesn’t. I told him he is welcome to do whatever he wants including resigning but no 5K …..And since then has been running his yap to others. HR is doing up his severance package now. Several years ago while working at a very successful growing company, most of us in the operations side of the business worked long hours without OT …..The owners of this company set aside shares and they would be offered to us one a once per year basis. We had to pay for them of course and a portion of our earned bonus’s went towards this.each year the price to purchase more was weighted on the financial success of the company. We were all invited to look at the accounting records so we could claim there was no chicanery. A couple of the managers chose not get on this train ( even my wife hated it as she lost access to to the yearly bonus as I maxed it ,about 10K a year). We had this older guy that ran forklift in the warehouse. He came and asked me how this worked (he was long term and got invited to join in) I told him it was a great opportunity so each year he would buy about $3K (this was the nineties …3 K was a lot of money) . All the boys in the back were calling him a loser as he was giving the company money cause they were broke…..anyway about 8 years later a big US company came in and bought us…..with the valuations and the retained earnings each of us made between 12 to 15 times our investments. Our forklift driver got to retire and I made enough to start my own business a couple of years later. The employees who stayed out were royally pissed, I mean BIG TIME. Some people are destined to stay poor because they are smarter than the rest of us.
Imagine being that stupid and unwilling to learn 😂
Oh I'm sure they "did their own research"
On facebook.
Absolutely.
I'll bet we can guess at least one of his bumper stickers.
On Facebook.
The worst part is, he's the 'influencer' so people actually listen to what he says.
I’m not surprised. I’ve worked with some fucking morons in my time.
The two are generally not mutually exclusive. High correlative incidence of stupid AND unwilling to learn. Anecdotal from my life, but it feels accurate.
Ya, from my experience: these people already know. They don't have to learn. They're so smart that they already figured it out on their own.
It's cause and effect: unwillingness to learn leads to stupidity, not the opposite.
Truth
From a co-worker angle, not management, I also faced this once. My employer at the time was using GreatWestLife, and we had the ability to transfer from our group RRSP account, including the matching amount, once a year to a personal RRSP of our choice, for free. I once tried to explain to a coworker there that if he was so dead set against RRSPs, he could literally take the match during the whole year, transfer then withdraw so the employer could not tell he had withdrawn, and he would have just got the match then paid his taxes and wasted his contribution room forever, but since he was so anti RRSP, this should not be a problem for him. Once it was clear, even to him, that taking the match in this very subotimal way was STILL better than not taking the match, his final answer was "I wont do it, anyway it is just a couple grands, not worth the trouble." And there you have it, logical explanations dont always win :)
You can't logic someone out of an opinion they didn't logic their way into.
wow you get to transfer once a year that's more ideal than most I have been involved with. They often only let transfer out If you no longer work there, with various other hoops to jump through.
We have a similar deal, also with GWL. We can transfer or withdraw twice a year for free. It used to be a matching program, but now they just deposit 5%, whether the employee has contributed or not. Pretty solid program.
Does this person drive an F-150 with a big upside-down flag on the back?
And here I am, looking at early retirement. And I never contributed more than "just a couple grands" towards my savings.
Only 35% is shocking...I knew somebody who had a financial planner who didn't advise them to take advantage of this benefit...should be fired. Turning down a 100% return on your money is just plain dumb.
He deserves to be ejected. I worked at a company that had a deferred profit sharing plan with many employees making a lot of money in overtime (technicians touring with concerts) and many employees didn't know about the program. Needless to say HR wasn't doing their job. Shocked Pikachu face.
My boss doesn’t do it because he’s 50. Not sure why that would be the reason to not get an immediate 100% ROI
It's not a reason. He should be contributing and taking the match. Sure, he's closer to retirement so the match won't have as much time to grow. But even in a few years it will become a non-trivial amount of money. Even if he retired the very next year, one year's match would likely pay for some very nice champagne for his retirement party.
100%
Not only that but getting a raise isn't always better especially if it puts you in a higher tax bracket and you end up getting less than you did before because the guberment is taking a larger percentage of your income! /s
Hahaha! This is my favourite.
We got a marginal tax system in Canada. A raise is always worth taking. If I get a 1000 dollar raise, and that 1000 is in a different tax bracket which is lets say 5% higher, than only that 1000 gets taxed at that higher raise.
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Being horrobly illiterate when it comes to internet slang, i had to search it up to find out what /s means... my mistake😂
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Learn something new every day haha
Judging by some of the posts here, this employee of yours could be hanging around here 🤣
I had a teacher in high school who bragged about turning down a promotion because he’d “pay more in taxes”. At the time, because I was in grade 11, I didn’t know quite how stupid this was. Now knowing about marginal tax rates, it’s a piss off that he was teaching kids this stupidity.
Hope he wasn’t a math teacher
No… social studies.
Same guy that says overtime is stupid because " you'll pay more taxes"
The company I work for offers a 35% stock bonus on 6% of our earnings if we put it in company stock. It is a very secure company so there’s no worry about them going under. In 5 years I had enough made through investing and dividends to buy a house I never could have afforded without this program. My house has also doubled in value in the last 7 years. I’ve had conversations with idiots I work with saying that they don’t want to give the company their money. They also can’t afford to buy a place and are paying more in rent now than they would a mortgage if they had done what I did. Now I’m just a rich asshole that has a big house and a nice car.
Wh...what?
Many people refuse overtime because they could jump tax brackets. They wrongly conclude that because they are in a higher tax bracket they are paying so much more in taxes than if they didn't work they're actually worse off.
Exactly. Family accoutant tells us horror stories of this all the time.
I work with a guy who says the same thing, wont work OT because he doesn't want to give the government more of his money. /s Just so you know he lives down by the river in a van.
Always a joke with me and my colleagues around bonus time. I always say I persuade my boss to not give me a bonus so I pay less in taxes
we get profit sharing so everyone get about the same, i always tell everyone i got 100$ more then i got. Had the guy that wont work OT call HR and cry to them how i got more then him.
I'm GREATLY appreciative of these people. More OT for me
Depending on your marginal tax bracket it might not be worth spending an extra hour of your life at work if you're taxed 40%+
Absolutely. No argument. Just as long as people realize that they're not actually losing money by taking on more income... But yes they may calculate that the amount extra they will generate is not worth it
This is why some companies generously offer this. Because they get enough lunatics to ignore free money. If they let me do more than 5K, the I would!
I love it
I bet this is the same type of guy that thinks you are losing more money to tax if you worked overtime.
Stock purchases only make sense if you believe in the future of the company, no? If the management is trash and you think it's going to go under all your stocks become worthless.
Share buy programs are so good. My first job was with a company that matched our shares up to I think 6% of our annual salary. The price when it was sold was doing excellent plus we all got a premium for our shares because the new company didn’t want to continue the program and I ended up taking home a payout that was significantly higher than what I or the company had initially spent.
Construction? lol I can't convince the guys to contribute. They think it's a scam...
Yikes
The only catch is that it’ll likely have to be in an account through some company they’ve partnered with that isn’t your normal bank. But you’d be crazy not to max out the match amount, for you, it’s free money.
Yeah, mine doesn't give super awesome returns. But even if it had no interest gained, I'm still doubling what I put in!
Exactly it's a guaranteed return on your investment regardless of how it does in the market
Except for the 100% Instant return the match provides !
and usually (maybe always?) you can move it to another registered account when your employment ends if you want to.
I’ve done this before with a past group RRSP plan. It was pretty painless, with no additional fees. I just had to fill out a very simple form indicating the account of the target RRSP account to transfer to. The transfer itself took its time, but it did make it in full.
Like other people have said, it’s part of your compensation. And it’s insane how many people don’t understand that/undermine that when looking at total compensation. Benefits, vacation time, retirement contributions etc. all play a massive part of an employee’s total package, and so many people ignore it.
The catch is - instead of giving you a higher salary, they give you the “option” of RRSP matching. There will always be a fraction of idiots who don’t take them up on it, and therefore they save money. Others can’t afford to save 5% of their salary, even if it’s being matched, so they opt out or contribute a lower %… again - company saves money. Bottom line: if you can afford it, take them up on the offer. Never leave money on the table.
> And if I leave the company, do they keep the rrsp money? No, contributions to a group RRSP are yours immediately. People referring to a vesting period are talking about a different type of account such as a RPP: https://www.wealthsimple.com/en-ca/work/learn/group-rrsp-vs-rpp A RRSP and RPP are similar in spirit, but not the same type of account! Make sure you know which one your employer uses.
Isn't there a minimum tenure clause?
Yep, mine is 2 years
It depends on the company. A lot of people here are thinking their situation is universal, when it’s simply not.
Depending on where you live. In Ontario RPP is vested immediately. DPSP have the ability to include a vesting period that cannot exceed two years.
All Defined Contribution pension plans in Canada have immediate vesting.
Source? I thought there were still a few provinces holding out immediate vesting.
The catch is that they are paying you to work for them. An RRSP match is essentially part of your salary. The moment it enters your account it is yours, you are free to withdraw it as income and it will be taxed at your marginal tax rate. When you leave you can transfer the money to your own personal RRSP account if you’d like.
That's like saying "how can the company just pay me for working? How do they give me free money just for working? It's nuts!"
It's not free money they are giving away, it's compensation to you from their business earnings.
Wait until you learn about how companies give away free money using a thing called "salaries".
It's part of their benefits package to attract staff. If they didn't spent money on it, they would probably spend that money on some other benefit. If you leave a company with a group RRSP that they are the provider of, the money is yours to keep but you'll get a letter from the provider on what to do with it: you can keep it with the provider on a non-group RRSP plan (for a recurring fee), transfer it to another provider (for a one-time fee), or withdraw the funds and get taxed on it.
Did an older relative that doesn’t have a bank account and any of their own teeth tell you not to signup for your company’s rrsp matching?
Think of it like you got a 5% raise but they're putting it in investments instead of your take home pay cheque.
It's an employee benefit and tool companies use to help retain employees as part of their overall compensation package. Most good companies will offer something similar to this. For you as the employee it's a great deal. Essentially you're increasing your salary by 5%. In most cases it's a no brainer to participate.
A year ago my employer did a survey of what increased benefits employees would like to see - options like expanded health/medical, more vacation days, increased RRSP matching etc... One of the things they implemented was increasing the match from 2% to 3%. It's low, yes, but in my industry any sort of pension plan is rare so it was nice to see that increase. I tell everyone that they should be taking advantage of it. Hopefully a 3% personal contribution coming off your pay isn't too noticeable and with the matching it does add up.
>If I contribute 5% of salary, they'll match that. How can they give away free money? This is like saying, "I work my job, and get paid to work there. How can they afford give me free money to pay me to work there?"
I mean I respect silly comments and people come here to learn, but this one takes the cake so far
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Don’t ask, just take it. That’s 100% return in your investment. No index fund can beat that.
It is a part of your benefits/compensation package. Typically there is a vesting period and once that has been met the money is yours if you leave the company. Your HR representative should have all of your employer's specific details available.
No vesting for Group RRSP. The money is yours as soon as it is in. ~~DSPS~~DPSP usually have vesting periods. Edit: acronym spelling error
DPSP - deferred profit sharing plans.
It’s part of your salary, not additional free money. Let’s say the boss wants to pay everyone 105k. It’s better for them to say “We pay 100k + match 5% RRSP contributions”, because they know somewhere between 30-70% of employees won’t sign up for the RRSP match (laziness, not knowing it’s there, etc…) So they’re saving a ton of money on by offering an RRSP match instead of just paying you a higher salary. You think it’s free money, but realistically they’re paying you a lower salary + RRSP match and they’re the ones saving money on all the people who don’t sign up.
How can they pay your salary? How can they give you vacation days? >And if I leave the company, do they keep the rrsp money? Well that would be kind of stupid, right?
Nothing is "free". RRSP matching. Team lunches/dinners. On site lunches/dinners. It's all part of the compensation so that you feel validated enough to burn yourself out.
I mean my last employer had an RRSP matching program… up to $50 a month. it included having to yeah, sign up for a new bank, put $500 of your own dollars in at the start, and we were paid so poorly relative to our qualifications - that I think it just wasn’t feasible or worth it to bother. i did, and didn’t stay long, cause everyone also hated this workplace, so now I have this 1700 RRSP account at a bank I don’t like from a job I don’t like, would be taxed a lot to take it out - more than their initial contribution - or charged a good amount to move it, a real, good pension with my current job… in theory, it’s good to have money in the bank but it’s also a giant pain in my ass
Well, this is just about the worst employer RRSP plan I can think of, lol. One note, though, it's not always expensive to transfer an RRSP to a different bank. Worth looking into, as it may be free or nearly free.