Business Plan Start-Up Guide

Saskatchewan Pension Plan Saskatchewan Pension Plan (SPP) was created in 1986 so that everyone could have access to a pension plan. SPP offers individual and business plans for employers to use as part of their employee compensation packages. Other plans can be complicated, costly and inaccessible for many businesses; however SPP’s options are easy, affordable, and tailored to meet the needs of your business and employees.

Pension plans help business owners attract, retain and reward employees. Pension plans are an essential tool for businesses in a competitive labour market. Don’t lose employees to companies offering better benefits; give your company an advantage with SPP.

SPP offers a selection of simple, low cost options designed specifically for business owners. SPP gives you a low cost way to help your employees plan for their retirement. The Plan is simple to set up and easy to use, and doesn’t require a minimum number of employees or minimum contributions.

SPP is completely flexible to match the size and financial capability of your business. Together employers and employees can contribute up to $2500* per year per employee. There is no obligation for employers to contribute to the Plan, and if you do, you can choose the exact amount to match your organization’s size and budget. As well, employees are able to choose their own contribution level, and start and stop contributions based on their personal circumstances without penalties. *Employees must have unused RRSP room to contribute.

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SPP funds are managed by investment professionals with a proven track record. SPP offers professional investment management with low administration costs (an average of 1%**). Employees joining the Plan can choose between two funds: a balanced fund of bonds, equities, real estate and short-term investments; or a short-term fund containing Canadian money market investments. Detailed information on SPP’s investment options and returns is posted on saskpension.com.

SPP has no setup fees or membership costs and no minimum number of employees is required. Membership is free and there are no fees for setting up, hosting or making changes to your Plan. All employees aged 18-71 are eligible to join, regardless of employment status (full-time, parttime, casual or temporary). Not all employees are required to join in order to put a Plan in place, and new members can be added at any time. Your employee owns their plan and funds are locked in until age 55.

SPP handles your paperwork and Plan administration. SPP will help you sign up for your company’s plan. After you set up a Business Plan for you and your employees, we’ll take care of the rest. We send out statements, tax receipts, T4A slips and regular newsletters. When an employee leaves or retires, we’ll handle the process. Retirement from SPP can take place between the ages of 55 and 71.

SPP offers a pension plan for every business. SPP’s Business Plan gives you a low cost way to help your employees plan for their retirement; and the earlier a person starts saving, the more he or she can accumulate. Even if your business offers other saving options, SPP is a valuable addition to anyone’s investment portfolio. **MER average from 2007 – 2011

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5 Simple Steps to Get Started SPP is simple to set up, easy to use and can be customized to suit each organization.

Choose a Plan option based on your business needs. For Plan options, see pages 4 and 5.

Determine which employees are joining the Plan and have them complete a Member Application form.

Complete an Employer Contribution Statement.

Forward all documents to the Saskatchewan Pension Plan.

We’ll do the rest!

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Plan Options We have a range of flexible options to help you create a Plan that’s right for your business. Select the one that works best for you and we will help you get started.

Option A: Employer Match Plan This option helps an employee grow their savings faster than they could on their own. As the business owner you can choose how you want to match your employee’s contribution. You also have the flexibility of contributing the Employer portion when it works best for you – quarterly, annually, etc. You may wish to consider: 1) Dollar for Dollar Match: For every $1 an employee contributes, you would contribute $1. 2) Annual Match: Choose a set amount, for example, $500 that you will contribute per year. Employees must also contribute a minimum of $500 to be eligible for the company’s contribution. There are no minimum requirements for what you choose to match or how you structure your Plan.

Option B: Start-Up Plan Providing a one-time start-up employer contribution amount is a great way to get your employees on the right track! You set up the Plan and then choose the amount of your initial contribution – it can be up to $2500. This Plan provides an incentive to encourage employees and contribute through payroll deductions. There are no minimum requirements for your initial contribution.

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Option C: Basic Plan Help employees “pay themselves first” by setting up a Basic Plan. With this option, you don’t contribute to your employee’s Plan. You submit contributions from employees through payroll deductions. With this Plan each employee chooses the amount of the contribution he or she would like to make, and can start and stop payments at any time during the year, depending on their circumstances.

Option D: Performance Plan Making an annual or lump sum payment to a pension plan is a great way to acknowledge the hard work of your employees! Contributions can be tied to a variety of different criteria, such as meeting sales targets, length of service, and yearly performance.

Option E: Design Your Own Plan We will work with you to create a plan that works for your business.

Tax considerations for employees and employers Employees The maximum combined contribution to an employee’s Plan is $2,500 per year, subject to the individual’s unused RRSP room. Employees receive a tax receipt for their contribution. If the employee is making personal contributions and wishes to have their tax reduced throughout the year, they will need to complete a T1213 and submit it to CRA for approval.

Employers

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A contribution funded by the employer is reported as a salary expense and the employee’s T4 must include the contribution as a taxable benefit. Only CPP is paid on the taxable benefit.

Set-up Check List All forms can be found online at saskpension.com.

Have you (the employer):

❏ Chosen a Plan option and payment structure? ❏ Completed the Employer Contribution Statement?

Has each participating employee:

❏ Completed the SPP Membership Application Form?



❏ Supplied proof of age? (Photocopy of birth certificate, passport, or driver’s license).



❏ Been provided an SPP Member Guide?

❏ Send all documents to SPP. (A postage paid return label is available at saskpension.com) Contributions can be remitted by cheque, online banking or pre-authorized payments from a bank account or credit card.

s? Any question

00-667-7153. Call us at 1-8 elp you. h We are here to

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Start your Business Plan today! SPP can help you and your employees save for retirement. Visit our blog: savewithspp.com or Saskatchewan Pension Plan Box 5555, Kindersley, SK S0L 1S0 [email protected]

1-800-667-7153

saskpension.com