Author Topic: Canadian Retirement Defined Contributions vs RRSP  (Read 1912 times)


  • 5 O'Clock Shadow
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Canadian Retirement Defined Contributions vs RRSP
« on: November 12, 2013, 08:18:12 PM »
Hello worldly Mustachians!

I come seeking advice. Currently my work program offers a DCPP where they match up to 4%. I want to maximize this because hey, a free 4% -- why not? I know this is also income tax deductible at the end of the year... but if I have money beyond the 4% should I throw more in here? Or Should I throw it into an RRSP?

I can't seem to find reasonable advice on google.


  • Handlebar Stache
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  • Location: Edmonton, AB, Canada
    • Meena Kestirke Insurance
Re: Canadian Retirement Defined Contributions vs RRSP
« Reply #1 on: November 12, 2013, 08:49:17 PM »
What is the money actually being held in? Company stocks? Mutual funds, index funds? I agree with getting the free 4% for sure, but after that, it would depend on what exactly the company is offering, if that was something I was interested in having money invested in I'd do it, otherwise (and most likely) I'd just do my own thing with RSPs. Also, in some situations your extra money is better put into TFSAs.

I'm sure others will be more familiar with DCPPs. I haven't had that exactly myself. I did a brief search and it seems you may not get access to your money until retirement. Do you know what happens to your money if you leave the company and when exactly you can access it? If there's any lockdown, I'd put extra money into something else that I could more readily access whenever I wanted it - at semi or early retirement age, without any qualifications.


  • Stubble
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  • Location: Ontario, Canada
Re: Canadian Retirement Defined Contributions vs RRSP
« Reply #2 on: November 13, 2013, 09:37:33 AM »
In short, unless the expense costs are really low for what is being offered (and you also like what is being offered), you are likely better off to tuck extra money into your RRSP (add the 4% to get the matching). If anything because it will give you flexibility for withdrawl. My work has one of these lovely plans *grumble*. My workplace is great and gives 6% if you contribute 5%. The problem being that after 2 years of service my "pension" becomes locked-in until I retire at 65 (55 best case). It is possible to move money out of the fund, but it is very complicated, unless it is going into another pension fund, e.g. HOOP.

I will also echo Kestra's opinion of look at your situation, sometimes TFSAs are the better choice.