Frequently Asked Questions

The information for Voluntary Retirement Savings Plan (VRSP) is based on the regulations passed on June 13, 2014 by the Quebec government.

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What is a VRSP?

A VRSP is a new type of group savings plan. It is a defined contribution pension plan with some differences that make it simpler than a traditional defined contribution pension plan. The VRSP offers tax advantages for both employers and employees, similar to those offered by a traditional pension plan.

When can I participate in the plan?

If you are 18 years of age and have one year of uninterrupted service you will be automatically enrolled in the VRSP. Employees who do not meet this criteria may elect to join the plan at any time by notifying their employer.

Does my employer have to contribute?

No, your employer is not required to contribute to a VRSP. However, your employer may choose to do so.

Do I pay tax on my contributions?

Your contributions to a VRSP are deducted from your income before tax is applied. The money contributed by your employer on your behalf is not included as a taxable benefit and therefore you do not pay income tax on this money until it is withdrawn (ideally at retirement).

How do I enroll in the plan?

Your employer will automatically enroll you in the plan by providing the VRSP administrator (such as Manulife) with the required employee information to establish your VRSP account. The VRSP administrator in turn sets up an account for you. You will have 60 days to notify Manulife if you do not want to participate in the plan.

Can I terminate my participation in the plan?

You may terminate participation in the plan within the first 60 days of receiving notification of your enrolment in the plan. After that period, you are a member of the plan. You can choose to stop making contributions to the plan once you have more than twelve (12) months of contributions in your account or if your employer is making contributions on your behalf.

Is it possible for me to temporarily suspend deposits into my plan due to unforeseen circumstances?

You may elect to reduce your contributions to zero if:

You have at least 12 months of contributions in your account,
Your employer is making contributions on your behalf, or
You have reached your annual contribution limit as set out by CRA.

How much can I contribute each year?

You can contribute up to your Registered Retirement Savings Plan contribution limit, which is typically 18 percent of the previous year’s earned income to a maximum dollar amount, plus any carry forward room you may have. The default contribution rates as set out in the VRSP regulations are:

2% of gross earnings from July 1, 2014 - Dec 31, 2017
3% of gross earnings from Jan 1, 2018 - Dec 31, 2018
4% of gross earnings from Jan 1, 2019 onwards

You may change your contribution rate at any time but not more than twice per 12-month period, unless your employer agrees to a greater frequency.

Can I withdraw money from the plan?

In general, employer contributions are locked in and are not allowed to be withdrawn until retirement. If the employee is age 55 or greater, he/she has the option to transfer his/her funds to another locked-in vehicle. Employee contributions are not locked in and can be withdrawn at least once every 12 months. However, regulations state that locked-in funds can be withdrawn in certain situations (i.e., a disability).

What happens when I terminate employment?

You are entitled to the full value of your account. You may opt to continue in the plan or transfer your savings to another retirement savings vehicle. Amounts that are locked in will remain locked in.