Group RRSP Information
Table of Contents
Simon Fraser University has established a Group Registered Retirement Savings Plan (RRSP) with Sun Life Assurance Company of Canada (Sun Life). By joining the plan and contributing regularly, you can take a more active role in planning for your and your spouse's retirement. The plan offers attractive investment options, low fees and tax sheltering of contributions and investment earnings until retirement.
The assets of this plan are not considered part of the assets/liabilities of Simon Fraser University.
You can join the plan at any time.
To join the plan, complete an "Enrolment Form - Group RRSP" and return to SFU Human Resources (Strand Hall room 2170).
If you choose to contribute on behalf of your spouse, your spouse must also complete an enrolment form.
Sun Life can begin accepting contributions when we receive the completed form.
You can contribute any amount to the plan within the limits described under 'Maximum Contributions to the Plan".
You can make contributions by payroll deduction or by lump sum payments. The lump sum payments can be made payable to SIMON FRASER UNIVERSITY or to Sun Life. Simon Fraser University will remit all contributions to Sun Life.
Within the maximum limits described below, you may choose to contribute on behalf of your spouse. These contributions are made to a “spousal RRSP”.
Spouse may include either a legally married or common-law spouse as defined under the Income Tax Act.
Spousal contributions are deductible from your taxable income, but any contributions you make to a spousal RRSP belong to your spouse and you may not withdraw them. If your spouse withdraws an amount, that amount must be included in your taxable income if it was contributed to the spousal RRSP in the current year or the previous two years. Amounts contributed before that are taxable to your spouse.
Minimum Contributions to the Plan:
The minimum contribution is $25 per pay period or $600 per year. This includes your contributions and any spousal contributions.
Maximum Contributions to the Plan:
Contributions made by or for you into this plan or any other registered plan may not exceed the maximum allowed by the Canada Revenue Agency. This amount is a maximum of 18% of your employment income for the previous year but is subject to maximum dollar limits.
The maximum dollar amounts change each year and are found here:
If you do not contribute the maximum allowable amount in a given year, you will "carry forward" the unused amount. This means that you can increase your allowable contribution for the next year or future years.
Each year when you complete your tax return, the Canada Revenue Agency will advise you how much contribution room you have.
It is your responsibility to ensure you do not make contributions in excess of the maximum amounts. You are allowed an overcontribution of up to $2000 without penalty. Over that, a penalty of 1% per month is payable on any amount in excess of your maximum 'RRSP contribution room' for the year.
If you have overcontributed unintentionally, it is wise to remove the overcontribution from the plan. Failure to remove overcontributions will result in you paying tax on those amounts when paid out as a benefit, without having received a deduction for them when contributed, as contributions that exceed your RRSP contribution room are not tax deductible in the year in which they are made. Contact Sun Life for the appropriate method of retrieving the overcontribution..
Information about the investments under the plan is provided in your Sun Life enrolment guide and on the Sun Life Plan Member Services Website at mysunlife.ca. You can use the generic access ID 0171904 and generic pin 25912804 to review the investment options available to you. You must select investments in order to participate in the plan. If you do not, your enrolment form will be returned to you for completion.
All of the funds in the plan belong to you, but you must make a decision on what to do with your account.
Your options are:
Keep your account at Sun Life
You may leave your funds in the SFU RRSP or move your account from the SFU RRSP to the Group Choices RRSP at Sun Life. Group Choices has many of the same investment options as the SFU RRSP.
You may directly transfer your RRSP to an RRSP at another financial institution, or the registered pension plan at your next employer. Direct transfers allow the funds to continue to be tax sheltered.
You may withdraw all or part of your RRSP in cash. Tax will be withheld before the amount is paid to you. Locked-in funds, such as transfers you may have made into this RRSP from another pension plan, cannot be taken in cash.
Withdrawals out of Sun Life will be subject to a $75 fee.
You may withdraw any or all of your account at any time, provided the funds are not subject to locking-in restrictions. The amount may be taken in cash or transferred to another registered plan.
Withdrawals, either cash or transfer, cost $25.00. This fee will be deducted from the amount withdrawn. The amount withdrawn may be subject to a market value adjustment if you are withdrawing from a guaranteed investment. Please contact Sun Life if you are considering any withdrawal to make sure you understand the implications.
Timing of Retirement Income
You must convert your RRSP to some form of retirement income before the end of the year in which you turn age 71. You may choose to receive your retirement benefit from the Simon Fraser University Group LIF / RRIF or from the financial institution of your choice.
For more information on the SFU Group LIF / RRIF, please contact the SFU Pension & Benefits Office at 778-782-3451 or Sun Life at 1-855-864-5989
Your options are:
An annuity is a contract to receive a series of payments that you buy with all or part of your account. Monthly payments are the most common; however payments may be made quarterly, semi-annually or annually.
a) Life Annuity
A life annuity provides an equal amount paid to you monthly, for your entire lifetime.
You may choose to guarantee a minimum number of payments. If you die before receiving the guaranteed minimum number of payments, the value of the remaining guaranteed payments will be paid in a lump sum to your beneficiary. If your spouse is the beneficiary, he or she may elect to continue receiving the annuity payments for the balance of the guaranteed period.
b) Joint and Survivor Life Annuity
A joint and survivor life annuity provides an equal amount paid to you monthly, for your and your spouse's entire lifetime. There are a number of choices you can make to add a guarantee of a minimum number of payments. You may have all or a portion of the income continue when one of you dies.
Registered Retirement Income Fund (RRIF)
A RRIF provides variable payments for a specified period of time, subject to legislated minimum amounts. You're able to adjust how much income you receive, how often you receive it, and how it's invested. Cash withdrawals are permitted.
If you die before your RRIF has been exhausted and your spouse is your beneficiary, he or she may continue to receive the payments from your RRIF, receive the remaining value of your RRIF in a lump sum, or transfer the remaining value to his or her own RRIF or RRSP.
If your spouse is not your beneficiary, the remaining value of your RRIF is paid in cash and treated as taxable income to your estate.
Locked-in funds may not be transferred to a RRIF. These funds can be used to purchase a Life Income Fund (LIF) which behaves much like a RRIF but is subject to some withdrawal restrictions.
You may withdraw all or part of the value of your RRSP as a cash amount. Tax will be withheld before the amount is paid to you.
Locked-in funds are not available in cash.
You are encouraged to seek financial or retirement planning advice from a professional before selecting your retirement income options.
If you die prior to starting to receive an income from your RRSP account, Sun Life will pay the value of your account to your designated beneficiary. There are various options available to your beneficiary and your beneficiaries should seek advice prior to making a decision.
Naming your Beneficiary
You are strongly advised to name a beneficiary to receive the proceeds of your account if you die. Your beneficiary may be changed at any time, subject to any legal restrictions. If you do not name a beneficiary, the proceeds are payable to your estate.
Keep your beneficiary designation up to date as Sun Life may be obliged to pay who is on record, regardless of your current marital status.
Locked-in funds may require that your spouse be your beneficiary for all or part of these funds.
Death Benefit Options
Once Sun Life is notified of your death, an option package will be prepared for your beneficiary.
If your spouse is your beneficiary, he of she may choose to directly transfer the account to another registered pension plan, registered retirement savings plan or RRIF. Direct transfers allow the funds to continue to be tax sheltered.
Your spouse, other beneficiary or estate will receive a cash payment equal to the value of your pension account. All cash payments are subject to withholding tax. The Income Tax Act may provide other options to certain individuals.
Your enrolment package has general information on retirement planning, how to choose your investments, and the necessary forms to join the plan. After you enrol in the plan, you will receive a letter from Sun Life confirming your enrolment.
Member Statement of Benefits
At least twice per year, Sun Life will prepare a statement showing the contributions deposited into this plan since the last statement and the total value accumulated to your credit.
Receipts for Tax Purposes
Sun Life will issue RRSP tax receipts twice each year. The first receipt will be issued in January covering the contributions received at Sun Life's head office in the last 305 days of the preceding calendar year (March - December). The second receipt will be issued in March covering the contributions received at Sun Life's head office in the first 60 days of the current calendar year (January - February).
You may choose to claim any or all of the amount reported on the second receipt (January - February) as a deduction from your taxable income for the previous calendar year or for the year in which the contributions were made.
Sun Life will mail receipts directly to your home address.
You will pay fund management fees on your investment options. A full description of all fees can be found on your year-end statement, or at mysunlfe.ca.
When you terminate your employment with SFU and you withdraw your funds out of Sun Life, you will be charged a $75 withdrawal fee.
Income Tax Regulations
The plan and the manner in which it is operated are governed by the Income Tax Act (Canada). Contributions, within limits, made to the plan can be deducted from your taxable income.
You must include benefits paid out of the plan in your taxable income unless you have made a direct transfer to another registered plan. Any cash payment out of the plan is fully taxable in the year in which you receive it. It is subject to withholding tax at the time of withdrawal.
You cannot assign assets under the Plan nor use your account as collateral for a loan.
About Sun Life
Sun Life is a leader in the Canadian financial services industry with total retirement assets under administration in excess of $40 billion. One in nine working Canadians is covered through a group insurance or retirement savings plan with Sun Life in over 10,000 group plans.
Sun Life earns consistently high ratings from Standard & Poor's, A.M. Best and Moody's, three leading internationally recognized credit rating firms. It is respected for its superior capitalization (double government regulatory requirements), prudent management of investments, claims paying ability, and a strong market position.
The Plan's Future
Simon Fraser University expects this plan to be permanent. However, Simon Fraser University reserves the right to change or discontinue the plan at any time.
If you have questions on where to get the enrolment material, or how to arrange for payroll deductions, please contact the SFU Pension & Benefits Office at 778-782-3451.
For everything else, please contact Sun Life at 1-866-733-8612
1. What are the advantages of contributing by payroll deductions?
Payroll deductions are a convenient and easy way to save for your retirement. In addition, you will receive immediate tax relief if Simon Fraser University deducts income tax based on your earnings less your RRSP contributions.
2. What is my RRSP contribution room?
The maximum tax-deductible RRSP contribution is set by Canada Revenue Agency each year. Your 'Notice of Assessment' sent by CRA after reviewing your personal income tax filing will include the exact amount. You may also call CRA directly at 1-800-267-3100 or visit their website for this information.
3. What are locked-in funds?
Locked-in funds originated from a registered pension plan. Even though you have transferred these amounts into an RRSP, a number of "pension plan characteristics" still apply. Locked-in funds are subject to special rules if you retire, die, divorce or transfer to another registered plan. Sun Life will prepare a statement outlining your options for your locked-in funds if one of these events occurs.
4. Can I transfer money from my other registered plans?
You can transfer amounts from other RRSPs, RPPs or DPSPs, or amounts received as a retiring allowance into this plan. If the transfer originates from a registered pension plan, and contains locked-in amounts, the amount must remain as locked-in. Please click here for the Direct Transfer of Assets form.
5. Are my assets protected from creditors if I declare personal bankruptcy?
Your assets would likely be protected in the event of your personal bankruptcy if your designated beneficiary is your spouse, child, grandchild or parent because your RRSP funds are held under an annuity contract with a life insurer. This protection is not available if your designated beneficiary is not in this protected category. Full protection is never guaranteed. Once your assets have been paid to you, the protection no longer applies. If you have any questions about your financial status, you should obtain legal advice.