VRSPs offer a number of fiscal advantages for both workers and employers. The main advantages are summarized below.
VRSPs vs. group RRSPs
| Characteristics |
VRSP |
Group RRSP |
|
Tax treatment
|
Contributions are tax deductible and benefits are taxable.
Employer contributions are exempt from payroll taxes.
|
Contributions are tax deductible and benefits are taxable.
Employer contributions are subject to payroll taxes.
|
|
Locking in
|
loyer contributions are locked in and to be used only for retirement.
Employee contributions are not locked in and can be used before retirement.
|
In most cases, RRSP amounts are not locked in.
|
|
Management and administration fees
|
Low and capped at 1.25% for the default investment option and 1.50% for the other options.
|
Variable, can be higher for certain investments.
|