Voluntary retirement savings plans (VRSP)

You can enrol in a VRSP if you:

  • are at least 18 years of age
  • are an employee within the meaning of the Act respecting labour standards
  • have one year of uninterrupted service within the meaning of the Act respecting labour standards.

The uninterrupted period during which the employee is bound to the employer by a contract of employment. For more information, consult the definition and interpretation in the Act respecting labour standards This link will open in a new window..

The administrator must offer a default investment option that is based on a lifecycle approach where the risk level is determined according to your age and adjusted as you near retirement age. Any fees that would lower returns cannot exceed 1.25% of average plan assets.

In addition to the default option, the administrator must offer 3 to 5 other investment options so that you can create portfolios tailored to your needs. Any fees that would lower returns cannot exceed 1.5% of average plan assets.

To find out the investment options offered under each VRSP and the related fees, consult the list of VRSPs registered with Retraite Québec.

You must have contributed for at least 12 months before you can suspend or stop your VRSP contributions, except in the following cases:

  • tax rules prohibit you from contributing
  • you make a contribution that is equal to or greater than your expected contribution for the 12‑month period
  • your employer contributes on your behalf.

If you are not an employee (you are self-employed, for example) you can stop or suspend your contributions at any time.

Yes, if you feel that you do not need this additional retirement savings vehicle for various reasons (personal RRSP, other investments, etc.). You must notify your employer that you will not enrol in the plan within 60 days following the date on which the VRSP administrator sent the statement of participation. After that opt-out period, you will be enrolled in the VRSP.

Yes.

Your contributions are not locked in and can be withdrawn at least once in a 12 month period. If withdrawn, the amounts are subject to provincial and federal income tax. Fees may also apply.

Employer contributions are locked in, meaning they are protected and cannot be withdrawn before you turn 55. If your employment ends, the administrator will offer to transfer the amounts in your name to another savings instrument (an LIRA or LIF, for example). You can also choose to keep all amounts in the VRSP.

Yes.

Under the Income Tax Act, you can contribute up to 31 December of the year in which you turn 71.

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.

To offer and administer a VRSP, the administrator must be a legal person, either an investment fund manager, a trust corporation or a personal insurer. The administrator must have received an authorization from the Autorité des marchés financiers and registered the VRSP with Retraite Québec.

The administrator must fulfil a number of roles and meet certain requirements, including:

  • carrying out transfers and refunds requested by members
  • providing a plan summary to enrolled employees
  • ensuring the contributions under the plan are paid
  • providing information to Retraite Québec, the Autorité des marchés financiers and to members and employers.

To learn more about the roles and obligations of VRSP administrators, consult our VRSP Newsletter on the obligations of a VRSP administrator This link will open in a new window. (French only).

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