Canada Life RRSP: everything employers and employees need to know

Established in 1847, Canada Life is considered as the country’s first local life insurance company. Since then, it has grown to become among the largest insurance and wealth management firms in the nation.  

Among Canada Life’s offerings are registered retirement savings plans (RRSP). RRSPs are financial accounts that allow Canadians to save for retirement while reducing taxable income. This makes it an important tool for retirement planning.  

In this article, Wealth Professional delves deeper into Canada Life RRSP. We will explore the different RRSP offerings, how they work, and what benefits they provide.  

If you’re an employer working out whether Canada Life RRSP is the best choice for your employees, this guide can help. This piece can also be useful for employees who may be searching for other ways to save for retirement.  

How does Canada Life RRSP work?  

Registered retirement savings plans are designed to help Canadians achieve a financially secure retirement through a range of benefits. Canada Life RRSP is no different.  

Just like in other RRSPs, the contributions made to a Canada Life RRSP are tax-deductible. Because of this, the investments grow on a tax-deferred basis until the funds are withdrawn in retirement when tax rates are likely lower. This immediate tax relief makes it easier for plan holders to build their retirement nest egg.  

RRSPs are registered under the Canada Revenue Agency (CRA). The funds are allocated to different investment options. Also, individuals aren’t limited to a single savings account. If they choose to, they can open several RRSPs.   

Get more information about how RRSPs work in this guide to registered retirement savings plans.   

Types of Canada Life RRSPs 

Canada Life offers various types of RRSPs: 

Individual RRSP 

Opened by the individual, this type of account is registered under their name. They also get full control of the investments. A Canada Life health and wealth consultant is available to help plan holders choose investments that fit their retirement goals and risk tolerance. 

Group RRSP 

This serves as a savings and investment program set up by employers to help employees save for retirement. Employees can also get immediate tax benefits as the contributions are made before income taxes. 

"Canada Life’s group registered retirement savings plans (RRSP) are made available through employers and plan sponsors," explained Kate Nazar, vice-president of group retirement services at Canada Life. "They can be an important part of a plan member’s overall compensation package and a valuable boost to the member’s future retirement income." 

Group RRSPs work like individual RRSPs. The main difference is, Nazar added, group RRSPs can be tailored to fit the needs of each workplace. Through a group plan: 

• employees can contribute directly through payroll deductions 
• employers may choose to match a percentage of employee contributions 

Spousal RRSP 

This allows married couples, with one partner earning considerably more than the other, a way to balance their retirement savings. A spousal RRSP provides an income-splitting benefit for couples where the contributing spouse receives the tax deduction. This is while the account is registered under their partner’s name.  

Learn more about how couples can make the most out of spousal RRSPs in this guide.  

Canada Life RRSP contributions 

In its RRSP insights and advice page, Canada Life recommends that plan holders come up with a contribution amount that matches their financial situation.  

Plan holders have various options when it comes to making contributions. These include automatic payments through their bank accounts or regular lump-sum payments.  

Another important factor to consider is the contribution room. This is the maximum allowable amount that plan holders can deposit into their RRSP in a given year. If an individual has more than one RRSP, the contribution room is combined with those of the other accounts.  

CRA’s RRSP rules state that account holders can contribute whichever is lower of: 

• 18 percent of earned income from the previous year 
• $32,490 – the maximum contribution set in 2025 

To qualify for an RRSP deduction, plan holders must make contributions during the tax year, or up to 60 days into the following year. Any unused contribution room from previous years can be carried over to future years. 

Plan holders can contribute until December 31 of the year they turn 71 years old. 

Canada Life RRSP withdrawals 

Withdrawals from Canada Life registered retirement savings plans are taxed as income and may trigger withholding tax. But there are exceptions: 

• the Lifelong Learning Plan (LLP) allows account holders to borrow up to $10,000 a year to a maximum of $20,000 over four years to return to school full-time 

• the Home Buyers’ Plan (HBP) lets plan holders withdraw up to $60,000 per calendar year to buy or construct their first home  

This guide teaches you everything you need to know about using RRSPs to buy a first home.  

Canada Life RRSP withdrawals are subject to fees, depending on the terms of the plan. These fees may be deducted from the withdrawn amount, depending on the account value and the frequency of withdrawal per year.   

Here’s a summary: 

Plan transfers 

Canada Life offers group RRSPs through its Freedom Financial NextStep program. This enables members to continue contributing to their group plan after leaving their jobs or retiring. It allows for a smooth transition into retirement with various retirement income options. 

What sets Canada Life RRSPs apart from competitors? 

Canada Life RRSP members can access a range of features and benefits to help maximize their savings. These include: 

Online tools and resources  

Plan holders can access a range of tools and educational resources to achieve their retirement goals, including:  

• Set My Goal: allows account holders to set and track their retirement income goals; they can also update their goals if their circumstances change  

• Contributions Calculator: shows users how extra contributions can boost their retirement savings  

• Income Wizard: provides helpful charts, graphs, and reports that show a person’s estimated income in retirement  

This free online RRSP calculator can also prove useful for employers and employees who want to maximize their contributions.   

Free well-being consultations 

“Canada Life offers group plan members access to Canada Life health and wealth consultants at no additional cost,” Nazar said. “These are licensed professionals who can help members get started towards their retirement and savings goals.”  

Canada Life’s health and wealth consultants can: 

• assess the member’s needs and tolerance for investment risk 
• give personalized insights to help maximize benefits 
• offer proactive solutions to help improve financial circumstances 
• help plan members make informed decisions that support their financial well-being 

Financial literacy programs 

Freedom on-site visits 

Canada Life offers group plan sponsors on-site, in-person education sessions. A program called Freedom on-site visits, meanwhile, help plan members meet their financial goals. 

Student Debt Savings Program 

This program is designed for younger plan members. It allows them to pay down their student loans while receiving an employer match for payments that go directly towards their group RRSP savings. 

Freedom Financial Registered Education Savings Plan 

“Canada Life’s group RRSP offering includes an easy-to-access Freedom Financial Registered Education Savings Plan (RESP) option that is unique in the industry,” Nazar said.  

“Plan members with a group RRSP can also choose to open an RESP account online within 10 minutes and set up regular, automatic contributions that will be eligible for federal matching grants.” 

Performers 

Canada Life offers specialized support to small businesses through Performers. This program provides small businesses with an easy way to get a group retirement and savings plan by working within their budget. 

"Performers is easy to get started and administer," Nazar said. "There's no setup fee or ongoing administration costs to the sponsor. The plan is fully digital with online enrolment, contributions, and digital member documents." 

What investment options are available for Canada Life RRSP? 

Canada Life offers two types of investment opportunities for RRSP holders: 

Mutual funds 

A mutual fund pools money from several investors to purchase a diversified portfolio, which can include stocks, bonds, and other securities. A professional fund manager chooses the type of investment based on a specific objective.  

One advantage of investing in mutual funds is that the risk of loss is reduced by spreading investments across a wide range of assets.     

The table below lists the different types of mutual fund investment options in Canada Life: 

Segregated funds 

Segregated funds work almost exactly like mutual funds but come with insurance guarantees that protect investments when the plan holder dies, and the policies reach maturity. This type of coverage makes the fees more costly than those for mutual funds.  

Here are some ways to invest in Canada Life segregated funds: 

• Estate protection: for those aged between 80 and 90 who are looking to pass on their money while saving on potential estate fees and taxes 

• Constellation-managed portfolios: for those who want a managed program with a customizable investment strategy that can suit their unique financial goals 

• Canada Life index ETF portfolios: diversified investments across asset classes and global regions, with the added protection of segregated fund policies 

Target date funds 

"Canada Life retirement funds are part of Canada Life’s asset allocation fund offering and can be used by all investors, particularly, target date fund investors as they get close to or enter retirement,'' Nazar explained. "[This is] to provide more customized options than the one fund that’s currently provided at retirement in all target date fund suites." 

Annuities 

Canada Life offers annuities as part of our range of product options. 

"Annuities can offer a guaranteed income stream with customizable options to help you step into retirement," Nazar explained. "Like a pension plan, an annuity can be thought of as pooling money from thousands of Canadians.  

"You can put a portion of your retirement savings, like RRSP, into an annuity. It can cover your basic needs so the rest of your money can be used to live the retirement you want – taking that dream vacation, for example." 

Find the full schedule of fees for the different Canada Life investment options in the firm’s NextStep guide. 

How to open a Canada Life RRSP 

Opening a registered retirement savings plan under Canada Life requires these simple steps: 

Step 1: Download the application form.  

Applicants can do so from this webpage. An Adobe Reader XI or higher is required.  

Step 2: Fill out the form. 

Print and fill out the application form. Applicants are advised to review the information they provide to make sure it’s correct. 

Step 3: Submit the completed form. 

The instructions on how and where to send the completed forms are detailed in the application form.  

For those who already have an existing RRSP and want to transfer the account to Canada Life, here are the steps:  

Transferring to Canada Life RRSP online 

• Step 1: Log in to grsaccess.com. 
• Step 2: Choose the NextStep sign-up on the home page. 
• Step 3: Answer the questions. 

Old users can use the same Access ID and password of their old group plan. New users can call 1-800-724-3402 to request access. There’s also a forgot-your-password function.  

Transferring to Canada Life RRSP the traditional way 

For those who prefer the old-school approach, here are the steps: 

• Step 1: Fill out the membership application form. This is downloadable from the link above and includes instructions for completion. 

• Step 2: Complete the statement of options. This is a summary of what members can do with their Canada Life RRSP. Applicants must also tick the Transfer to NextStep checkbox and sign the authorization section. 

• Step 3: Mail all required forms to Canada Life. The documents must be placed in the self-addressed envelope included in the download. 

Canada Life has investment and retirement specialists to help members make informed decisions about their savings and retirement goals. These specialists can be reached at: 

• Email: [email protected] 
• Landline: 1-800-724-3402; weekdays from 8 a.m. to 8 p.m. ET 

What other retirement saving plans does Canada Life offer? 

Apart from registered retirement savings plans, Canada Life provides a range of products and services to help Canadian save for retirement. These include: 

Registered pension plan (RPP) 

This is set up by an employer to provide employees with retirement income. The plan is registered with the CRA, so employees can access tax benefits. Contributions made to an RPP are tax-deductible. Investment income also isn’t taxed until it’s withdrawn. 

Employers are required to contribute to an RPP. Contributions are optional for the workers. RPPs may be structured as either a defined contribution or defined benefit plan. 

Deferred profit-sharing plan (DPSP) 

This is set up by employers as a way to share profits with their employees. Contributions depend on how much profit the company earns. Workers aren’t allowed to contribute.  

DPSPs are registered with the CRA. They often serve as an alternative to a group registered pension plan.  

Tax-free savings account (TFSA) 

This works as a flexible investment savings plan that lets investors earn investment income and withdraw it tax-free. The savings can be used to:  

• supplement retirement income 
• purchase health or long-term care plans 
• pay for major life events such as buying a house or pursuing continuing education 

Non-registered savings plan (NRSP) 

This provides investment opportunities for funds unrestricted by government regulations and contribution limits. Investment income earned in an NRSP is subject to taxes, but isn’t locked in. 

Pooled registered pension plan (PRPP) 

This is designed to provide low-cost retirement savings opportunities for employees and self-employed individuals who don’t have access to employer-sponsored plans. This guide explains what employers and employees need to know about PRPPs.  

Voluntary retirement savings plan (VRSP) 

This works almost the same as a PRPP. The plan is legally required for Québec employees who don’t have access to workplace pension. Check out this guide to voluntary retirement savings plans to learn more.  

For more tips and strategies on how to maximize a registered retirement savings plan, visit our Retirement Planning News Section. Be sure to bookmark this page to access breaking news and the latest industry updates. 

Do you think Canada Life RRSP has the features and benefits to help you build your retirement nest egg? Let us know in the comments