For most people, the answer is "both, in order": fund your group RRSP up to the full employer match first, then direct any extra savings to whichever plan has lower fees and the investments you want.
If you have a group RRSP through work and you can also open an RRSP on your own, you might be wondering which one your retirement savings should go into. The good news: for most people it isn't an either/or decision.
Both are registered retirement savings plans with the same core tax advantages — the differences come down to who runs the plan, what it costs, how much control you have, and whether there's an employer match on the table. Here's how the two compare, and how to decide where your dollars should go first.
What is a group RRSP?
A group RRSP is an employer-sponsored retirement savings plan set up on a group basis. You contribute with pre-tax dollars straight from your paycheque, and your money goes into a lineup of investments chosen by the plan administrator — usually an insurance company, bank, or online financial services provider. Many employers also add a matching contribution up to a set percentage of your salary.
If you're an employer weighing a group RRSP against a DPSP, we wrote an article about the two and stack up how they compare.
What is an individual RRSP?
An individual RRSP is one you open and manage yourself, independent of any employer. You choose the provider, pick your own investments, and contribute on your own schedule rather than through payroll. It stays with you no matter where you work.
Group RRSP vs individual RRSP: the key differences
Both plans share the same core RRSP tax benefits and draw on the same personal contribution room. Where they differ is in the day-to-day details:
Feature | Group RRSP | Individual RRSP |
|---|---|---|
| Who sets it up | Your employer | You |
| How you contribute | Automatic payroll deductions with pre-tax dollars | On your own schedule; deduction claimed at tax time |
| Employer match | Often available, up to a set % of salary | None |
| Investment selection | Preselected lineup chosen by the plan administrator | Full choice of provider and investments |
| Fees | Often lower, thanks to pooled group assets | Vary by provider; you control what you pay |
| When the tax break lands | Immediately, at source on each paycheque | When you file your return (or via reduced withholding) |
| Contribution room | Uses your personal RRSP room | Uses your personal RRSP room |
| If you change jobs | Can be transferred to an individual RRSP (direct, tax-deferred) | Stays with you; unaffected |
What are the advantages of a group RRSP?
Employer match. If your employer matches contributions, that's an immediate return on your money — effectively free retirement savings you won't get in an individual RRSP.
Automatic payroll deductions. Contributions come off your paycheque before you see the money, which makes saving consistent and easy to stick to.
Immediate tax savings. Because contributions are pre-tax at source, your tax break lands on every paycheque instead of at tax time.
Lower fees. Group plans pool everyone's assets, which often means lower management fees than you'd pay on your own.
Professionally managed options. The investment lineup is curated and managed for you, which helps if you're not confident picking investments yourself.
Familiar and simple. It's a standard RRSP under the hood, so there's little new to learn, and enrollment is usually straightforward.
What are the advantages of an individual RRSP?
More investment choice. You're not limited to a preselected lineup — you can hold almost any eligible investment and choose your own provider.
Control over fees. You decide where to hold the account, so you can shop for lower-cost options.
Independent of your employer. It doesn't depend on where you work, and an employer can't cancel it.
Stays with you. No job change, plan switch, or transfer paperwork — it's always yours.
Flexible for the HBP and LLP. You can tap your own RRSP for the Home Buyers' Plan or Lifelong Learning Plan on your own terms.
Which should you contribute to first?
For most people, the order is simple:
Capture the full employer match first. A match is an immediate, guaranteed return that an individual RRSP can't offer, so leaving it unclaimed means leaving money behind.
Then decide where the rest goes. If your group plan has low fees and solid investment options, it may make sense to keep contributing there. If you want more choice or lower costs, direct extra savings to an individual RRSP.
You can also do both. Together they draw on the same personal RRSP contribution room, so keep an eye on your annual limit.
What happens to your group RRSP if you leave your job?
Your group RRSP is yours to keep. If you leave, you can usually transfer the balance into an individual RRSP as a direct, plan-to-plan transfer on a tax-deferred basis — it isn't a cash-out and doesn't trigger tax. Choosing to withdraw the money as cash instead is a separate decision, and any amount you withdraw would be reported as income and taxed accordingly.