# Does my employer have the right to not match an RRSP lump sum contribution?



## coydog (May 24, 2017)

Hi,

My employer does a 3.5% match off of base salary. Anyone doing it via a payroll deduction is having it matched automatically. I did a lump sum contribution and am going through a lot of hoops trying to get them to match the contribution.

I'm wondering if they have the right to decline matching because I did this via a lump sum and not through payroll deduction.

Thanks.


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## Mukhang pera (Feb 26, 2016)

There is no law that says an employer must match an RRSP contribution in any circumstance. To the extent that an employer might do so, it is a matter of contract. That might be set out in a written employment contract between you and your employer; it might be set out in a"Terms and Conditions of Employment"-type of booklet you may have received at the start of employment, which may be deemed to be part of the employment contract. In a union setting any obligation would be spelled out in a collective agreement.

I suppose that, apart from contract, an employer might make wholly gratuitous contributions, albeit unlikely. In such case, the employer would be free do do as it likes.

I would not expect an employer to bind itself to a term requiring it to match an _ad hoc_ contribution by an employee. But, as I say, the answer lies in what has been agreed, expressly or impliedly.


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## Ag Driver (Dec 13, 2012)

Deleted


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## canew90 (Jul 13, 2016)

Most companies have a Policy statement which outlines the contribution rules, limits, requirements and a disclaimer, allowing them to cancel. Lump sum contributions may or may not be allowed, depending upon the policy statement. Read the policy.


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## AltaRed (Jun 8, 2009)

canew90 said:


> Most companies have a Policy statement which outlines the contribution rules, limits, requirements and a disclaimer, allowing them to cancel. Lump sum contributions may or may not be allowed, depending upon the policy statement. Read the policy.


Indeed, read the policy. Usually such plans are based on payroll deductions, i.e. X% is deducted from pay for emloyee's contribution and the employer kicks in X% as well.


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## nobleea (Oct 11, 2013)

The matching RRSP contributions are a benefit. One which they can take away as they please. My company suspended matching RRSP contributions a year ago during the oil downturn to save money and hasn't re-instituted it yet. They will in a few months, but they certainly won't catch up on the missed contributions.

I would ask HR if they can match lump sump contributions. If they say no, then that's that. It's usually a % of your salary, so it wouldn't work to do a lump sum of 100K when you make 50K/yr and ask for a match on that.


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## CalgaryPotato (Mar 7, 2015)

The problem is, if you are running a large company, and you allow lump sum contributions from employees, then for every single employee in that company who isn't taking advantage of the per month RRSP (and you'd be surprised how many won't) they have a liability. If they have 1000 employees and a $3500 potentially liability on half of those employees, all of the sudden you are looking at over a million dollars.


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## Eclectic12 (Oct 20, 2010)

Never had a matching RRSP but the DC pension provided both matching and lump sum payments ... so I suspect the RRSP version likely has the same limits to keep the potential liability a known number.

The base pension was not optional ... it was 1% of salary and matched at 1%. The optional part that would be similar to the liability being talked about was 2%/2% from pay cheque or a similar amount as a lump sum (or any mix thereof that was kept at 2% of income).

Another way the liability was kept manageable was that the option part was "use it or lose it". One had to make the DC contribution in the current calendar year or it disappeared.


And yes, I expect it would have been in the millions but I suspect the company POV was was how this was a nice, predictable liability compared to the DB pension where the employer's contributions started at a bit under 6% where shortfalls in the future could mean an unknown liability. 

It seemed clear management thought dropping an unknown future liability plus cutting their contributions to a maximum of 3% and potentially as low as 1% from almost 6% was seen as a deal. 


Cheers


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