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  • Tax Wise | Small Biz Advisor
    SHARING WITH EMPLOYEES THAT CAN BE DESIGNED TO MINIMIZE TAX About 46 of Canadian employers require employees to share the premium costs of their extended healthcare benefits according to the International Foundation of Employee Benefit Plans The good news If there s a cost sharing program where the employer pays 50 and employees pay 50 the employer can allocate employees contributions tax efficiently For example if an employer pays any part of the premium for long term or short term disability insurance the benefit is taxable if the employee becomes disabled and has to collect If employees pay the premiums themselves however the benefits when the person becomes disabled are received tax free says Rempel So typically you d apply employee payments to the long term and short term disability portion of the benefits plan first GROUP SAVINGS RETIREMENTS The latest numbers from Statistics Canada show that about 32 8 of Canadian employees participate in an employer sponsored pension plan while 18 4 participate in a group RRSP Philosophically you don t want employees to work for you for many years and then hit retirement and not have done anything about their own savings says Rempel You want to encourage retirement savings as well as retain employees The tax advantages for employers and employees include CLAIMING THE ADMINISTRATIVE COST OF SETTING UP A GROUP SAVINGS AND RETIREMENT PLAN AS A TAX DEDUCTIBLE EXPENSE This holds true whether an employer is setting up a registered pension plan RPP a group RRSP or an individual pension plan IPP which is a one person defined benefit pension plan that can potentially be used to accrue more tax deferred retirement savings for older owners or executives TAX DEDUCTIBLE CONTRIBUTIONS TO AN EMPLOYER S OWN AND HIS HER EMPLOYEES RETIREMENT PLANS An owner can provide security for employees and him herself by contributing to a group retirement plan while reducing the corporation s taxable income ALLOWING KEY EXECUTIVES INCLUDING THE OWNER TO STASH AWAY MORE TAX DEFERRED CASH FOR RETIREMENT THROUGH AN IPP IPPs have a lot of advantages says Koiv They re basically a Cadillac pension plan and they should be looked at in the case of the individuals who own the company to provide a steady stream of income in retirement When you set up an IPP you may be able to top up past service contributions which means you can accumulate substantially more tax deferred cash than your normal RRSP contribution would provide That s particularly useful for individuals in their 50s and 60s says Koiv because their contribution limits are higher and can balance out the additional administrative costs of an IPP A lot of business owners would be quite wealthy but they don t have liquidity says Koiv The IPP gives them the income flow in retirement without forcing them to start selling things POTENTIALLY LOWERING TAX OBLIGATIONS WITH AN IPP WHEN THE OWNER SELLS THE COMPANY As long as it s set up in advance says Koiv by getting

    Original URL path: http://www.smallbizadvisor.ca/advisor-for-business/tax-wise-1825 (2016-04-26)
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  • Group Encounters | Small Biz Advisor
    environment where chronic and mental illness unemployment and other economic hurdles mar the social landscape it s more crucial than ever that advisors consider offering such group platforms to clients Daniel Werbrouck senior team leader Implementation Group Savings Retirement with Standard Life in Montreal says group plans from a business perspective are an interesting and easy way for an advisor to continually grow his or her business Cross selling individual products to prospects they re already serving as a group is a viable way to expand They ve already got a foot in the door it makes the next step of looking at other needs easier for the advisor says Werbrouck It s something they can look at and nurture and over time can help to increase their overall book of business David Blevins knows all about the group client attraction factor As president and founder of Jones DesLauriers Blevins Insurance Group in Barrie Ont he says offering group plans is key to gaining new clients while keeping your current ones in tow You re looking to fill the needs on many levels So you re going in and doing individual estate planning you re selling insurance to individuals and families you re trying to look after estate planning capital needs analysis replacing the income in the case of the death of the breadwinner add ing to their stability if disability occurs and of course sav ing for pensions he says But the real trick is to keep an eye on the challenges your clients face They will have estate issues right off the bat Blevins explains Typically they have tax issues continuation issues such as If I m selling my business whom do I sell it to How do I sell it Another sweet spot Group plans with a payroll deduction help employees accumulate a bigger nest egg Your money s elastic you ll spend what you have says Werbrouck It s easier to take 100 off your pay and put it aside every week as opposed to at the end of the year and then put 3 000 towards retirement savings That s one of the huge advantages of the group retirement plan Furthermore group buying power usually results in lower fees than what an individual would pay on the retail market a huge benefit often overlooked Werbrouck adds And of course the more wealth employees amass the more desirable they become as individual clients SUPPORT IS AVAILABLE Importantly for those who are considering taking the plunge Werbrouck emphasizes that the advisor doesn t have to be a pension expert to consult or advise companies on group retirement plans His company has managers of business development This role says Werbrouck is designed to give the advisor the tools and information they need to prospect design and sell group retirement plans It s a win win situation he says The client is happy the advisor looks good And critically the group employer client has employees who have a plan

    Original URL path: http://www.smallbizadvisor.ca/your-business/group-encounters-1822 (2016-04-26)
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  • Partner of Choice | Small Biz Advisor
    so that we re always making sure the plan is efficient At the start of every group relationship he spends time understanding what the employer wants to accomplish the purpose of the group retirement plan That helps him decide whether to recommend say a group RRSP paired with a tax free savings account and deferred profit sharing plan over a defined benefit plan He also takes a close look at the employees their demographics help to determine the investment menu The key message is Tell us what is important to you what you want to achieve and we will custom build a group retirement plan so it does what you want it to do says Olfert We re there to partner with them to make sure that what they re doing is appropriate and to be their advocates in the industry COMMON GROUND Olfert s group retirement clients include companies with as few as eight employees and as many as 300 He works with airlines sports teams and manufacturing businesses but there s a common theme At the end of the day Olfert says all of the employees are just trying to get to a comfortable retirement That said he estimates that 90 of those employees set their contributions choose investments and don t think much about their plans after that THE EARLIER WE CAN GET IN FRONT OF MEMBERS AND STRUCTURE THE PLAN WELL FOR THEM THE MORE LIKELY THEY WILL GET TO THEIR DESIRED RETIREMENT The earlier we can get in front of members and structure the plan well for them the more likely they will get to their desired retirement he says And hopefully they come to some of the educational sessions to learn more We know that people are busy and that some people just don t like to deal with this stuff but we don t want them to get to the end and think This isn t where I thought the plan would get me Olfert describes chatting with a member of a plan he had just taken over He asked How do you pick your investments The reply We were just told to make it add up to 100 That s a massive risk to the company number one Olfert says and it s not helping the employees get to retirement We need to make it as simple as possible so that the members who don t want to pay attention to it are still going to be okay in retirement He continues Choosing a carrier is something we really focus on How simple is it for members to get enrolled and to understand what they re in how to make changes and what s available to them ADVICE FOR ROOKIES Those who are considering getting into group retirement plans need to have a thorough understanding of the pros and cons of the different structures that are available in the market says Olfert They also need to accept that it can take many

    Original URL path: http://www.smallbizadvisor.ca/advisor-for-business/partner-of-choice-1821 (2016-04-26)
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  • A snapshot of the GS&R market | Small Biz Advisor
    potential to easily develop an underserviced sector 10 Another important advantage relationship building Indeed 18 of advisors told us that building a relationship with business owners was an important motivator In some cases these business owners may have already been retail clients Adding GS R as an additional service provided to these clients helps to develop trust and create long term business partnerships As an advisor you can become the primary go to person for many types of financial advice But the most mentioned advantage articulated by 40 of the advisors we surveyed is the prospect of cross selling There s a tremendous opportunity for advisors to expand their retail business by cultivating relationships with plan members i e SME employees Implementing a GS R plan for a business with 100 employees potentially puts the advisor in front of 100 prospects during enrollment and education sessions And who is most keen on getting individual financial advice from the advisor who works with the company s GS R plan Among SME employees the strongest interest in receiving personalized financial advice and other individual products comes from employees in management level jobs 76 those with children 78 and those aged under 35 76 or between 35 and 49 73 These are mid career professionals with enough years before retirement to become valuable long term clients That s a clear opportunity that benefits both SME employees and advisors The employee perspective better than a bonus When offered the choice of a pay raise an employer contribution to their GS R plan a yearly bonus or extra vacation days 47 of SME employee would choose the pay raise first That s to be expected Here s something that is considerably more surprising 33 would opt first for an employer contribution to their GS R plan a significantly larger number than the 13 who would pick a yearly bonus and the 8 who would pick extra vacation days One in three employees say a GS R contribution is their top perk And what s the employer s take on this Our research shows that SME decision makers don t always know what their employees really want When provided with a list of those same benefits and asked which perk they think their employees would like best 76 of employer respondents say a pay raise A further 10 say extra vacation days and 9 say a yearly bonus Just 5 say their staff would choose an employer contribution to their GS R plan Armed with evidence of these different perceptions advisors can help employers align their overall compensation plans with employee preferences Again this is a unique chance for advisors to contribute by becoming an important business partner who helps SME employers match their compensation and benefits programs to meet their employees needs The employer perspective seeking advice Three in four 74 employer respondents say they would be likely to consult a financial advisor when making significant decisions about their GS R plan Employers want a

    Original URL path: http://www.smallbizadvisor.ca/advisor-for-business/a-snapshot-of-the-gsr-market-1891 (2016-04-26)
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  • Expert advice for your small business | Small Biz Advisor
    strategy to succeed In these three articles excerpted from a new magazine Advisor for Business you ll get money saving tax tips find out why one small business implemented an employee benefits plan and learn how to keep benefits costs in check by reducing healthcare fraud Top 5 Tax Tips for small business Show your value by sharing the tax advantages of group retirement and group insurance plans with your

    Original URL path: http://www.smallbizadvisor.ca/advisor-for-business/afb-winter-2013-consumerized-articles-1880 (2016-04-26)
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  • Tools & Resources | Small Biz Advisor
    shows that most Canadian financial advisors 63 would be INTERESTED in offering their clients a SIMPLIFIED group savings and retirement plan Yet many HESITATE before entering the group retirement market WHY The two biggest reasons are lack of KNOWLEDGE and lack of TIME 1 OUR ADVISOR PORTAL CAN HELP YOU OVERCOME BOTH BARRIERS Download PDF version If you are considering adding group savings and retirement plans to your product shelf or expanding a practice that already includes group clients visit advisors standardlife ca You will find An easy to understand introduction to Guidelines for Capital Accumulation Plans CAP Guidelines Detailed information about Standard Life s extensive range of retail and group products Leading edge insights and creative tools that can help you make the sale and keep the business The Advisor Portal is a time saving one stop shop for everything you need to know about Standard Life s retail and group products It is an essential component of Standard Life s long term commitment to strengthen our partnerships with advisors so we can help you build your business And we encourage you to visit our My business GPS section regularly to watch for new insights and tools to evolve

    Original URL path: http://www.smallbizadvisor.ca/advisor-for-business/tools-resources-1843 (2016-04-26)
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  • Purple Hearts Security Inc. | Small Biz Advisor
    That means building strong relationships with clients and presenting a positive image So Seenarine wants his employees to be happy to come to work and that s why he offers an employee benefits plan Download PDF version It wasn t a decision he took lightly Seenarine acknowledges that the main obstacle for small businesses is often financial It can be very difficult to sustain the cost of a group plan he says For a small business it can feel impossible There are also administrative challenges such as getting employees to return enrolment forms without the help of an HR department To overcome this Purple Hearts created sample forms that were easy for employees to follow MY MAIN OBJECTIVE IS TO COMPETE WITH BIGGER SECURITY FIRMS WHICH MEANS RETAINING GOOD EMPLOYEES AND MAKES OFFERING BENEFITS A NECESSARY INVESTMENT Another challenge was the negativity Seenarine heard from some of his advisors who told him his company was too small to worry about benefits Seenarine decided to ignore this feedback for two reasons My main objective is to compete with bigger security firms which means retaining good employees and makes offering benefits a necessary investment I also had to go with my core values I want employees to be happy Seenarine emphasizes that offering benefits is a big commitment and recommends that small business owners make sure any plan they offer is financially sustainable Only when Purple Hearts recently secured its eighth long term contract did Seenarine feel he could offer benefits To ensure sustainability the company offers individual rather than family coverage for now and Seenarine makes personal sacrifices I m not paying myself much he admits But I want to make sure the company grows and employees are happy THE ADVISOR S ROLE Seenarine worked with an independent broker who secured

    Original URL path: http://www.smallbizadvisor.ca/advisor-for-business/purple-hearts-security-inc-1839 (2016-04-26)
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  • Business Insights | Small Biz Advisor
    created in this legislation is a multi employer pension solution developed to significantly broaden the number of Canadians with access to a pension plan However most organizations must wait for provincial or territorial legislation to pass into law before they can take advantage of the PRPP As of the date of writing none of the provinces or territories has enacted legislation that sets out the details of PRPP implementation FINANCIAL LITERACY A HOT BUTTON ISSUE The Task Force on Financial Literacy s 2011 report Canadians and Their Money Building a Brighter Financial Future to the federal minister of finance will likely take on greater prominence in the halls of government and corporate boardrooms The task force provided 30 recommendations in the areas of shared responsibility leadership and collaboration lifelong learning delivery and promotion and accountability Financial advisors have a central role to play when it comes to improving financial literacy especially since according to Statistics Canada s 2009 Canadian Financial Capability Survey financial advisors are the most likely source of information for a majority of Canadians 54 seeking advice on financial matters FOCUS SHIFTING TO PAYOUT PRODUCTS According to Statistics Canada s 2011 census 14 8 of Canadians are aged 65 and older up from 8 in 1971 and the fastest growing age group is 60 to 64 year olds The aging population expanding as the first wave of baby boomers enters retirement is raising the profile of payout products and tools Previously the focus for employers establishing a capital accumulation plan such as a DC plan or group RRSP was on products and tools that help employees accumulate retirement savings Now the menu must include solutions for retirees who need to draw an income from their pool of assets Demand is set to grow as the rest of the

    Original URL path: http://www.smallbizadvisor.ca/advisor-for-business/business-insights-1811 (2016-04-26)
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