Payout products for group plans
What is a payout product?
Retirement income products let employees turn their retirement savings into retirement income. They also help their savings grow, so they'll last as long as possible.
Our payout products
Group registered retirement income fund (RRIF)
A RRIF is a popular choice for converting retirement savings into income. It can be used to convert funds from any of the following types of plans: registered retirement savings plan (RRSP), deferred profit sharing plan (DPSP), defined contribution pension plan (DCPP) and individual pension plan (IPP).
Advantages
- More flexible than an annuity, which requires regular, fixed withdrawal amounts
- Investment income isn't taxed until withdrawn
- No maximum withdrawal limit, but Canada Revenue Agency sets a minimum
Details
- Investment options typically identical to those in RRSP
- RRSP funds must be converted to RRIF by December 31 of year the person turns 71
- Just like RRSP, money held in RRIF grows tax-free until withdrawn
Group life income fund (LIF)
A LIF is designed to provide a retirement income for the rest of the holder's life. It can be used to grow savings, tax-free, transferred over from a locked-in RRSP, a locked-in registered account (LIRA), a registered pension plan or another LIF.
Advantages
- Money grows tax-free until withdrawn
- When holder dies, money goes to beneficiary
- Guaranteed lifetime income
Details
- To ensure lifetime income, withdrawals subject to annual minimum and maximum
- Locked-in assets must be converted to LIF no later than December 31 of year the person turns 71
Single premium annuity
Plan members in a group retirement savings plan who are nearing retirement can opt for a lifetime annuity, which provides guaranteed income for the rest of their life.
Advantages
- Guaranteed lifetime income
- When annuitant dies, money goes to beneficiary
Details
- Life annuity: provides income for life
Payments tend to be higher, but stop when annuitant dies - Guaranteed annuity: provides guaranteed income for life
If annuitant dies before end of guarantee period, money goes to beneficiary - Joint and last survivor annuity: provides income for life
When annuitant dies, payments transferred to surviving spouse at predetermined percentage
Variable benefits (VB)
Variable benefits (VB) are a new payout product at Desjardins Insurance. This new option lets plan members receive retirement income directly from their defined contribution pension plan (DCPP).
In some provinces, plan members can leave only locked-in funds in their DCPP, while other provinces also allow the addition of non-locked-in amounts that have been accumulated in their retirement plan. In that sense, it's similar to a life income fund (LIF) as benefits will be paid out directly from the pension plan.
Advantages
- Simple: Payments are drawn directly from the DCPP
- Cost-effective: Plan members benefit from the DCPP's lower management and investment fees
- Exclusive: The investment funds carefully selected by the retirement committee are still available to plan members
- Practical: Plan members can still enjoy the full range of services offered by Desjardins Insurance
Details
- Variable benefit accounts are like LIFs because the rules around payment frequency (annual or monthly if applicable) are similar
- There's no need to transfer locked-in funds and non-locked-in funds, when applicable, out of the plan when plan members turn 71 or want to start receiving payments
- When some provinces allow non-locked-in funds to be transferred from the DCPP to a variable benefit account, they'll now be locked in
- No minimum withdrawal amount is required before age 72
- The minimum annual withdrawal amount is established by the Income Tax Act
- The maximum annual withdrawal amounts are determined by each province's pension laws where variable benefit accounts are offered
- Variable benefit payments are considered income and plan members will need to pay taxes on them
- Eligibility criteria and eligible amounts vary from one province to another
- Variable benefits are available in most provinces, except New Brunswick, Newfoundland and Labrador, and Prince Edward Island
- In British Columbia and Alberta, the payout product is called "Life Income Type Benefits"
Contact us
Setting up a plan
Montreal area:
1-800-363-3072 Phone number to set up a group retirement savings plan for the Montreal area. This link opens your phone app.
Quebec City area:
1-877-828-7800 Phone number to set up a group retirement savings plan for the Quebec City area. This link opens your phone app.
Help with an existing plan
Monday to Friday: 8 AM to 8 PM
1-888-510-4762 Phone number for customer service for group retirement savings. This link opens your phone app.