What is a characteristic of a Group Registered Retirement Savings Plan (GRRSP)?

A Group Registered Retirement Savings Plan (GRRSP) is designed to allow employees to save for retirement through payroll deductions, and it functions similarly to an individual RRSP, but within a group context provided by an employer.

One of the defining characteristics of a GRRSP is that contributions made to the plan are subject to the total RRSP contribution limits set by the Canada Revenue Agency (CRA). This means that individual contributions to a GRRSP count towards the overall limit of how much an individual can contribute to all of their registered retirement savings combined in a year. Effectively, participants need to be mindful of their total RRSP contributions to avoid exceeding the maximum allowable amount, which could result in tax penalties.

The other choices refer to attributes that are generally not applicable to a GRRSP. For instance, while some retirement plans may have locked-in features, a GRRSP does not inherently possess this characteristic—it typically allows funds to be accessed more freely than locked-in plans. Additionally, while funds from a GRRSP can usually be transferred to another RRSP, it is not accurate to say that they cannot be transferred. The option about only permitting cash withdrawals does not capture the full scope of withdrawal options that may exist. Consequently, the