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Leveraging AMSC Group RRSPs and TFSAs to support your employees

February 3, 2016

As tax season is just around the corner, many employees are thinking about their financial goals and income tax deductions.  As employers, municipalities may receive questions about providing tools that can assist their employees in planning and saving for their future. 

AMSC, along with our Strategic Partner Sun Life Financial, are here to help by providing a Group RRSP and tax free savings account (TFSA). These offerings can serve as supplemental savings to existing programs or as a primary savings program for municipalities and organizations that do not currently have a formal retirement savings program.

Employees may ask for advice on which approach is better for them—RRSP or TFSA.

The answer depends on the employee’s tax rate and savings goals.

Both RRSPs and TFSAs shelter you from tax as long as the investments are held within the account. With an RRSP, the contribution is deducted from income, earning a tax refund. However, the money becomes fully taxable when you take it out. A TFSA is the reverse in that you don’t get a tax break on contributions, but you also don’t pay tax on withdrawals either. So in deciding between the two options, the question boils down to whether one wants to pay taxes now or later. For many employees, a combination of RRSP and TFSA savings works well.

If you have any questions or require additional information on our group RRSP and TFSA plans, please call 310-AUMA or send us an email.

The Alberta Municipal Services Corporation (AMSC) is a solutions-based company dedicated to meeting the business needs of clients, delivering enhanced services to support municipalities in managing costs and building capacity within the municipal framework.