The new federal budget brings some good news for Canadians. One of the proposed change was an increase in the total allowable contribution limit to the Tax Free Savings Account (TFSA). Retroactive to January 1st, 2015 the contribution limit has been increased from $5,500 to $10,000.
This increase gives Canadians saving for their future some extra flexibility in terms of where to invest their funds. This is especially beneficial to those in the lower tax brackets. Canadians earning $50,000 or less may be better served by now investing in a TFSA rather than an RRSP due to contribution limits. The limit for RRSP is currently 18% of a person’s annual income, so for someone making $50,000 for example would only be $9,000, which is now less than the new TFSA cap. Although RRSP contributions are tax deferred, the tax penalties for accessing your funds prior to retirement may deter you from utilizing your money for immediate needs. TFSA however carries no penalties for withdrawing funds. Although in terms of tax benefits, TFSA contributions are not tax exempt or tax deductible, only your investment gains are. So whether you will benefit more from investing in RRSPs for the long term or have easier access to your funds with a TFSA, will be completely up to you. A good retirement plan should likely be comprised of both TFSA and RRSP savings.
Quick facts about your TFSA.
- A maxed out investment of $10,000 over 3 years can save you upwards of $3,708 in taxes.
- A person over the age of 18 who have not made any contribution since the TFSA came into effect in 2009 will currently have $41,000 in contribution room.
1. Attracts prospective talents and helps retain current ones
Paramedical services are often described as a nice-to-have addition to employee benefits plans instead of must-haves. But more and more employees are seeing the importance of these services. Having Paramedical services in your group benefits not only will attract prospective talents to your First Nations organization but also will help retain your employees.
2. Increases employee morale and loyalty
Creating a Work-Life balance can be difficult for today`s workforce. With services like “Massage Therapy” employees can relieve tension and pain. Giving your employees access to Paramedical services can help them to lead to better health, such as to overcome stress and increase morale.
As a Plan Administrator, are you worried about the cost?
Generally, employees pay a certain portion of the cost. This amount usually reduces the longer employees stay with your Indigenous organization.
3. Costs can be controlled
Making paramedical services work for you and your employees relies on sustainability. In order to include Paramedical Services in your benefits plan, you need to manage the costs and have a budget.
Unfortunately, runaway expenses can quickly derail your plan. Managing and monitoring plan benefits usage is crucial to identifying patterns, which can be used to modify the offerings for future sustainability.
In addition, adding minor restrictions to the plan can also help mitigate bloated costs. Enforcing a per-visit or per-practitioner limit is a good idea, but can still be expensive if the plan members have large families. Many companies have adopted this option instead of a family maximum, which encourages employees to be more responsible for their usage.
Another option for cost control can be to implement a tiered-based coverage based on tenure.
Offering paramedical services to your workforce is a great way to keep them healthy and happy, but being cognizant of the accompanying costs is also extremely important. Finding a balance between employee morale and the costs is the bottom line to the successful employee benefits plan.
April 2nd is Employee Benefits Day. The day was organized by the International Foundation of Employee Benefit Plans (IFEBP), as a day of appreciation for those in the benefits profession. It is meant to recognize the work these individual do, to educate both employee and employers about the wide range of benefit topics and issues.
Every year the IFEBP brings focus on a particular subject, and this year they have chosen Wellness 2.0.This is the growing movement to expand employer wellness programs to encompass all areas of total well-being: body, mind, wallet, community and work. Today everyone is encouraged to examine what initiatives your organization could offer to increase your employees’ overall health
Check out the IFEBP website for some great tools to start incorporating the Wellness 2.0 movement in your workplace.