As at March 24, 2023Show prices
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As at March 24, 2023Show prices
The SaskWorks Payroll Investment Plan (PIP) is a simple, tax efficient and effective way for employees to build their retirement savings. From a financial advisors perspective, the program is a value-added service that may be offered independently or as a component of a group benefits plan.
The Payroll Investment Plan allows employees to make direct contributions to their SaskWorks investment each pay-period. The 32.5% combined tax credit and the RRSP tax deferral are received at source that is, deducted from the income tax paid each pay period so employees will only see a minimal reduction in their net pay. At no cost to the employer and with a simple one-time set-up, the SaskWorks Payroll Investment Plan is an attractive retirement savings plan and effective employee retention strategy.
The financial advisor plays an integral role in implementing and maintaining the payroll plan. It is the advisor’s responsibility to identify prospective companies and to ensure that the SaskWorks’ Payroll Investment Plan is not already in place within the organization. Although it is not required, SaskWorks prefers that the PIP be set up by the current advisor of record for the company’s group plan. Once prospective employers have been identified the advisor will play a major role in implementing the payroll investment plan. This process is outlined in detail below in order to aid the advisor in the set up and maintenance of the plan.
During the enrolment phase, the advisor will meet with interested employees to determine how an investment in the SaskWorks Venture Fund will fit within their individual savings strategy. With the employee, the advisor will use SaskWorks’ payroll deduction calculator to determine an optimal contribution amount and the tax deductions associated with it. The advisor is also responsible for providing the employee with the required disclosure materials as per compliance regulations (i.e. prospectus).
After the initial setup, the advisor is responsible for regular KYC updates as required by compliance. The advisor must be available to assist the shareholder with any changes to their contributions, including increasing, reducing, or ceasing contributions, and to address any problems or concerns the shareholder may have.
On an ongoing basis, the advisor must ensure that all payroll investment plan materials are kept current and in good supply with the employers to which they have introduced the program. SaskWorks, through the co-op marketing program, will work with the advisor to share the costs of marketing initiatives and materials.
Please note: employees are not obligated to work with any particular advisor. An employee may choose to sign up for the plan through an investment advisor of their choice. Likewise, if an advisor’s client is employed at an organization where the PIP is in place, he/she may enrol the client in the plan.
SaskWorks has prepared the following procedural guideline to ensure that the implementation of the plan is completed efficiently and with favorable results. The advisor will proceed with the following actions:
SaskWorks’ back office and the employer will then take the following actions:
During the scheduled meeting with their advisor, the interested employee will complete the enrolment process. It is the advisor’s responsibility to ensure the potential shareholder fully understands the risks and benefits associated with the fund.
The shareholder will meet with the advisor who will complete the Subscription form for them. When completing the form, the advisor should note the following:
The advisor must also complete the Payroll Authorization Form for the shareholder, and note the following:
The employee and the advisor both sign the Payroll Authorization form. The completed forms need to be mailed or faxed to SaskWorks’ back office at the address or fax number indicated on the top of the forms.
For changes to an existing plan, the advisor and employee will fill in the “Changes to Contributions or Cease Plan” section of the Payroll Authorization Form. A subscription form is not needed when changing an existing plan. The advisor simply needs to check the appropriate box and provide the necessary information.
All processed PIP investments are held off-book (also known as client held or self-directed investments). When investments are held in this format, the client is the owner of the investment versus the advisors firm holding the investments on behalf of the investor. Processing the Payroll trades as off-book allows the Fund to identify and report shareholder information more effectively. It also allows the Fund to waive the client’s $35.00 initial setup fee.
Once the SaskWorks Payroll Investment Plan has been implemented within a workplace, if it is maintained properly it is a program that will benefit the financial advisor for years to come. Past experience has shown that employee turnover within a business will cause the amount of employees participating in the PIP to decrease over time. With that in mind we ask that advisors take the following actions to maintain the PIP program:
It is not necessary for a financial advisor to be in constant contact with the employer, merely to ensure that the program is running smoothly and that new additions to the company are aware of the program and capable of enroling.
SaskWorks maintains an independent payroll consultant who is available to support employers who are looking to implement the program.
For more information regarding the SaskWorks Payroll Investment Plan, please contact:
All payroll remittances, subscription forms and payroll authorization forms should be mailed or faxed to:
SaskWorks Venture Fund
c/o Prometa Fund Support Services Inc.
220 – 155 Carlton Street, Winnipeg, MB R3C 3H8