Assignment $1$: Group Registered Retirement Savings Plan $($RRSP$)$

Instructions

Your Nova Scotia based organization plans to set up a Group Registered Retirement Savings Plan $($RRSP$)$ for its employees.

The plan will allow employees to contribute a percentage of their regular salary based on their years of service.

Under $2$ years of service $1\%$

Over $2$ years up to $3$ years of service $2\%$

Over $3$ years up to $4$ years of service $3\%$

Over $4$ years up to $5$ years of service $4\%$

More than $5$ years of service $5\%$

The employer will be making a $100\%$ matching contribution.

The plan will not allow employees to withdraw the employer contributions while actively employed unless the withdrawal falls under the CRA home buyer plan or lifelong learning plan.

Employees will have the option of withdrawing their personal contributions at any time. However, to avoid situations where an employee makes a contribution to receive the employer match, and then immediately withdraws their contribution a consequence will be that the employer matching contribution will be suspended for $12$ months following such a withdrawal.

Prepare a communication for employees that explains how the employee and employer RRSP contributions will impact their statutory withholding amounts and net pay. Also, include information related to employee withdrawals from the RRSP$.$