Pension Deductions of Registered Retirement Savings Plan

Registered Pension Plan (RPP) or Registered Retirement Savings Plan (RRSP) is the secondary classification defined for pretax deductions. RRSP is a type of account for holding savings and investment assets for retirement income.

When you create a pretax element, you can apply for an annual legislative limit for the pension deductions of RRSP and also opt for an employer match contribution. This only applies to primary element classifications of Pretax Deductions with secondary classifications of RRSP. Use the pretax element template and answer the questions given in this table.

Field	Value
Enforce RRSP limit?	The options are Yes or No. You are presented with the next question only if your answer to this question is Yes.
Is an employer match required?	The options are Yes or No. You are presented with the next question only if your answer to this question is Yes.
Are the employer contributions insurable?	The options are Yes or No.

If the option to enforce the RRSP limit is selected, the RRSP contribution for the year is capped at the annual limit. This includes both the employee contribution, as well as the matched employer contribution taxable benefit.

When the employer match option is selected during element creation, new shadow elements are created. These are the input values generated by the template to support employer match contributions:

• Enforce RRSP Limit

• Employer Match

• Employer Contribution Insurable

• Employer Contribution Amount

• EI Hours

• EI Allocation

• Taxable Benefits Tax Processing

These are the payroll run balances to support employer match contributions:

• RRSP Employer Contribution

• RRSP Employee Contribution

Employer Pension Contribution Rules

Employer Pension Contribution Rules for enforcing the RRSP Limit is defined at the PSU level. These rules determines the percentage of the employee's contribution matched by the employer up to the RRSP Limit for the year. Employer match contributions are also supported for RRSP deductions for both percentage and flat amount processing. The Employer Pension Contribution section of the Legal Entity setup page has these two fields to define the contribution values:

• Percentage of Employee Contribution: The percentage of the employee's contribution the employer will match.

• Maximum Contribution Percentage: The maximum percentage the employer will match of the employee's contribution.

Eligible Compensation of Earnings Balance Feeds

In order to calculate the employer's maximum contribution amount, the eligible compensation balance, < Pretax RRSP Element Base Name>must be fed with the earnings elements used to calculate the deduction. Ensure that all earnings that are subject to RRSP must have feeds to the pretax element's eligible compensation balance.

RRSP Limit

The RRSP Limit options are only applicable for secondary classifications of Registered Retirement Plan for Pretax Deductions. The RRSP value is captured on the Federal Component section of the employee's Tax Credit Information tax card.

Enable RRSP

Use the Run Element Upgrade process to enable RRSP. When you run this process, it performs different actions upon the objects related to the elements, such as input values, formulas, and balances.

Before you run this process, consider the following:

• If the existing pretax element was created at payroll relationship level, it's not eligible for upgrade for the RRSP functionality. Only elements at the assignment levels are available to upgrade.

• If the element needs to be upgraded for both pretax iteration and RRSP functionality, you must run the upgrade process individually for each feature.

• You must reassign the element to the employee, if:

  • If the element is already assigned to an employee, , and

  • Element is already processed in a payroll

  If you don't reassign the element to the employee, the default values created for the new input values aren't displayed in the employee's element entry.