What's the difference between a Group RRSP and a DPSP?

With a Group RRSP, both the employee and the employer can contribute. With a Deferred Profit Sharing Plan (DPSP), only the employer contributes from company profits, making it a flexible way to reward staff without requiring them to pay in.

How much does a group retirement plan cost for the employer?

The main cost is the employer contribution, which you design to fit your budget. This is often a percentage match of employee contributions, such as 3-5% of payroll. Administrative fees are typically very low or built into the plan.

Is it a lot of administrative work to run a group plan?

It doesn't have to be. Our firm manages the plan setup, employee enrolment, and ongoing questions. Your main task is simply managing the payroll deductions and remittances each pay period.

What happens if an employee leaves my company?

The money they contributed is always theirs. We help them transfer their funds to a personal account. Depending on the vesting rules you set, they may also get to keep some or all of the contributions you made on their behalf.

Group Retirement

Group Retirement Plan for Small Business in Ontario: How It Works

Considering a group retirement plan for your company? We explain how plans like Group RRSPs and DPSPs actually work for a 10-person business in Ontario.

October 6, 2026 · 6 min read

Your Best People Are Starting to Ask

You’ve built a solid business. You have a great crew of about ten people who know what they’re doing, and you rely on them every day. But lately, you’ve heard whispers about retirement savings. One of your key people mentioned a friend at another company gets an employer match on their RRSP. Now you’re wondering if you should offer something similar.

For many owners of trades companies, renovation firms, and other small businesses, the idea of a “pension” sounds complicated and expensive. You’re worried about the administrative headache, the long-term cost, and whether it’s even possible for a company your size.

This is a common conversation we have with clients. The good news is that a modern group retirement plan is not your grandfather’s pension. It’s a flexible, powerful tool designed for small businesses. Let’s walk through how it actually works, from our experience helping business owners just like you.

Why Bother with a Retirement Plan?

Before we get into the nuts and bolts, let’s be clear about the goal. A group retirement plan isn’t just about helping your employees save for the future. It’s a strategic business decision.

In a competitive market for skilled labour, you can’t always compete on salary alone. A solid benefits package, including a retirement plan, can be the reason a top-performer chooses your company over another. More importantly, it can be the reason they stay.

Showing your team that you’re invested in their long-term financial well-being builds incredible loyalty. It sends a message that you see them as partners in the company’s success, not just names on a payroll. For a small crew, that feeling of stability and being valued is huge.

The Main Options for Your Small Business

When we talk about a group retirement plan for a small business in Ontario, we are almost always talking about two main options that can be used alone or together: a Group Registered Retirement Savings Plan (RRSP) and a Deferred Profit Sharing Plan (DPSP). A formal Pension Plan is a third option, but its complexity and cost usually make it a poor fit for a business with 10 employees.

Group Registered Retirement Savings Plan (RRSP)

This is the most common and straightforward type of plan. Think of it as a collection of individual RRSPs that get a group discount on fees and professional management.

How it works: Your employees choose to contribute a percentage of their paycheque directly into their Group RRSP account. Their contributions are tax-deductible, lowering their taxable income for the year.
Your role (the employer): You can choose to match a portion of their contributions. This “employer match” is the key incentive. Your contributions are a tax-deductible business expense, just like salaries.

Deferred Profit Sharing Plan (DPSP)

A DPSP is a powerful and flexible tool that many business owners love, especially those with fluctuating revenue like contractors and real estate investors.

How it works: Only the employer contributes to a DPSP. You decide to share a portion of your company’s pre-tax profits with your employees.
Your role (the employer): The key benefit here is flexibility. In a great year, you can contribute a significant amount. In a tight year, you can reduce the contribution or even contribute nothing at all. There is no set requirement. You often pair a DPSP with a Group RRSP, where employees must contribute to the RRSP to be eligible for the DPSP money.

For the employee, a DPSP is a fantastic perk. They receive contributions from the company without having to put in any of their own money. It directly ties their rewards to the success of the business they are helping to build.

Rather have someone check it for you?

We do this every week for group retirement across Durham Region and Northumberland. In 30 minutes we'll tell you the three biggest gaps in your current setup — in writing, whether or not we ever work together.

We reply with the next available slots, then open the calendar and email you the link.

“Found John prompt and very informative regarding options for investments. Best advisor I've had in 40 years.” — Doug M., Google review

Read all reviews on Google

Before you book

What happens next?

We reply with the next 2–3 available meeting slots. Once you pick one, you’ll get a calendar invite and a short prep note so we can make the most of the time.

How long does it take?

Most first meetings are 20–30 minutes. We’ll ask a few questions, share what we see, and only move forward if it makes sense for you.

What should I bring?

Nothing is required. If you have a recent tax return, group benefits summary, or investment statement handy, it helps — but only if you want to share it.

Designing Your Plan: The Employer Match and Vesting

This is where you, the business owner, have the most control. The design of your plan determines its cost and its effectiveness as a tool for attracting and retaining staff.

The Employer Match

The most popular structure is a simple percentage match. For example, you might offer to match 100% of employee contributions up to 3% of their salary.

Let’s use an example. An employee earning $70,000 a year decides to contribute 3% of their salary to the Group RRSP. That’s $2,100 per year. You would then match that contribution, adding another $2,100 to their account. In total, they have saved $4,200 for the year, and your cost was just $2,100.

The matching formula is completely up to you. It can be 50 cents on the dollar, or matched up to 4% or 5% of salary. We work with you to find a level that fits your budget and makes a real impact on your team.

Vesting Rules

“Vesting” is a critical concept. It refers to when an employee legally owns the contributions you have made on their behalf. This is your most powerful tool for employee retention.

Immediate Vesting: The employee owns your matching funds from day one. This is great for attracting new talent.
Cliff Vesting: The employee must work for a set period, typically two years, before they own any of your contributions. If they leave before the two-year mark, they forfeit your matching funds (which are returned to the company).
Graded Vesting: Ownership happens gradually. For instance, an employee might be 20% vested after one year, 40% after two, and so on, until they are 100% vested after five years.

For a small business owner trying to keep a skilled team together, a two-year cliff vesting is often the most effective strategy. It encourages your best people to stick around for the long term.

What About All the Admin Work?

This is the number one fear we hear from business owners, and it’s a valid concern. You don’t have an HR department. You don’t have time to become a retirement plan expert.

Here’s how we solve that problem. When you work with a firm like Thompson & Pollock, our job is to lift that administrative burden from your shoulders.

Plan Setup: We handle all the provider selection and paperwork to establish the plan.
Employee Enrolment: We come to your shop or office (or meet virtually) and run an enrolment session for your entire team. We explain in plain language how the plan works and what the benefits are.
Individual Support: We then sit down one-on-one with each employee. We help them complete their forms, understand their contribution choices, and get properly set up. You don't have to answer their questions; we do.
Ongoing Service: When you hire a new person, we onboard them into the plan. When someone leaves, we guide them through their options. We are the first point of contact for all plan-related questions.

Your responsibility is reduced to what your bookkeeper or payroll service already does: making the correct deductions and remitting the funds each pay period. We handle the rest.

This is general information, not tax or legal advice for your situation.

At Thompson & Pollock, we specialize in building practical, effective financial solutions for business owners. If you’re wondering whether a group retirement plan is a good fit for your company, the next step is a free, 30-minute Fit Review. We’ll discuss your specific goals and see if we can help. Our client roster is limited, and every application is read personally by one of our partners to ensure we’re the right fit for each other.

Common questions

What's the difference between a Group RRSP and a DPSP?: With a Group RRSP, both the employee and the employer can contribute. With a Deferred Profit Sharing Plan (DPSP), only the employer contributes from company profits, making it a flexible way to reward staff without requiring them to pay in.
How much does a group retirement plan cost for the employer?: The main cost is the employer contribution, which you design to fit your budget. This is often a percentage match of employee contributions, such as 3-5% of payroll. Administrative fees are typically very low or built into the plan.
Is it a lot of administrative work to run a group plan?: It doesn't have to be. Our firm manages the plan setup, employee enrolment, and ongoing questions. Your main task is simply managing the payroll deductions and remittances each pay period.
What happens if an employee leaves my company?: The money they contributed is always theirs. We help them transfer their funds to a personal account. Depending on the vesting rules you set, they may also get to keep some or all of the contributions you made on their behalf.

You now know more than most advisors will tell you. Here's the part that's personal.

Everything above is the general rule. What it's actually worth in your situation depends on your numbers, your timing and your tax picture — and that's the half no article can answer. We keep a small number of consultation spots open each week; if this sounds like your file, we'll find you a slot.

The three numbers in your file that decide the outcome
Where your current setup quietly leaks tax, fees or coverage
A written summary of what to do first — yours to keep either way
No products discussed on the call, and no pressure afterward