As announced earlier this year, as of November the Canadian government will discontinue the sales of Canada Savings Bonds (CSBs) and Canada Premium Bonds (CPBs).
Employees who purchased CSBs through a Payroll Savings Program offered by their employer will no longer have access to this method of saving but, the principal and interest on bonds purchased through a program are guaranteed and will continue to earn interest until redemption or maturity, whichever comes first. Organizations offering the program should have a designated Campaign Director to help answer questions. Participants may also refer to the Questions and Answers document provided by the Canadian government.
Employers who want to continue providing an option for payroll deducted savings may consider offering a Group Tax-Free Savings Account (TFSA). An employer sponsored Group TFSA can offer an investment menu that includes a range of options appropriate for investors with a conservative, moderate or aggressive risk tolerance and savings goals that are short, medium or long-term. A Group TFSA that allows members to make investment decisions among two or more offered options however, would be considered a Capital Accumulation Plan (CAP) and is subject to compliance with CAP Guidelines.
If you have questions or want to learn more about Group TFSAs and CAP Guidelines, contact Accompass Investment & Retirement consultant, Debbie Patton.