Create a Pension Plan in maestro*

Objective

Maestro* lets you manage different types of pension plans. Contributions to a pension plan can be paid by an employee, an employer or both.

Access one of the options suggested below according to the type of employee and pension plan to be created:

In Québec

Employee Type	Context of Use
CCQ	maestro* > Time Management > Maintenance > Payroll > Social Benefits Management
In Québec, the CCQ employees pay into a pension plan in addition to fringe benefits. The settings for the CCQ employee pension plan is automatic by following the steps below: Access Social Benefits Management. Click the Update Social Benefits icon. For more information on this topic, please refer to the Social Benefits Management help topic.
Others	maestro* > Time Management > Maintenance > Payroll > Define Pension Plan
This option is for managing an RPP, RRSP, Coll. RRSP, DPSP, Labour Funds or VRSP pension plan. Contributions to a pension plan can be made as a fixed amount withheld by pay period, an hourly contribution or a percentage of the gross earnings. Contributions can be made by the employee, the employer or both.

 

Outside Québec

Employee Type	Context of Use
Unions	maestro* > Time Management > Maintenance > Payroll > Union Management
Use the Union Management option to define a Pension Plan or RRSP pension plan if the union manages the pension plan. If the pension plan is not managed by the union, create the pension plan in Define Pension Plan option.

 

PReREQUISites

This section is required during the implementation of the pension plan or if the remittance account in the chart of accounts is modified.

 

Activate pension plan accounting

maestro* > Time Management > Maintenance > Payroll > Configuration

1. From the Configuration window, click General in the menu on the left.
2. Activate the Pension Plan Calculation field.

The Explanation of Pension Plan on Pay Stub field is only used if the pension plan was defined in the Payroll Information tab in Employee Management (maestro* > Time Management > Maintenance > Payroll > Employee Management).

3. Click Accounts in the menu on the left.
4. Enter the Registered Pension Plan Account.

The Registered Pension Plan Account specified in configuration is used if no account is defined in Define Pension Plan.

5. Click Save.
6. Click Quit.

 

summary

Click on a link to access a specific section:

• Setting up a pension plan in Québec
  • Determine the pension plan type to be created
    • Setting up a RPP pension plan (Registered Pension Plan)
    • Setting up a RRSP pension plan (Registered Retirement Savings Plan)
    • Setting up a DPSP pension plan (Deferred Profit-Sharing Plan)
    • Setting up a Coll. RRSP pension plan (Collective RRSP)
    • Setting up a LF pension plan (Labour Funds)
    • Setting up a Voluntary Retirement Savings Plan
      • For an employee-paid contribution
      • For an employer-paid contribution
  • Tracking contributions for a pension plan
  • Associating a pension plan with an employee
• Setting up a pension plan outside Québec
  • Determine the type of pension plan to be created
    • Setting up a pension plan
    • Setting up a RRSP pension plan
  • Associating a pension plan with an employee in union management

 

Steps

Setting up a pension plan in Québec

The Define Pension Plan option manages pension plan deductions. This option is used to set up a pension plan that is not managed by the CCQ or by a union.

You can see the impact of the pension plan calculation on the employee's cumulative amounts, the T4 and RL-1 for each pension plan type.

maestro* > Time Management > Maintenance > Payroll > Define Pension Plan

 

Determine the pension plan type to be created

When a pension plan is created, the user must answer the questions in the table below. Depending on the responses, some fields must be completed when a pension plan is created.

Question	Actions required
Who pays the contribution to the pension plan?	Contribution paid by the employee only Complete columns related to the employee Contribution paid by the employer only Complete columns related to the employer Contribution paid by both parties Complete columns related to the employee Complete columns related to the employer
How should the pension plan contribution be deducted?	Depending on the answer, complete one of the following fields in the appropriate column depending on whether the contribution is paid by the employee or the employer: Fixed contribution amount in the Flat Rate field. Amount paid by the hour in the Hourly Amt field to pay a contribution of $2 per hour, for example. A contribution percentage to be deducted from the gross earnings in the %Gross Earning field. NOTE: If the amount of the contribution varies from one employee to another, or the employer's contribution differs from one employee to another, Maestro suggests creating two separate pension plan; one for the employee and one for the employer. In this mode, you must enter value 1 in the Flat Rate, Hourly Amount or %Gross Earning field. In Employee Management, you can enter the employee's contribution by entering the quantity to be used, which is multiplied by the value defined in Define Pension Plan.
Should taxes be decreased immediately?	If the answer is Yes, complete the fields Fed. Credit Factor Prov. Credit Factor To set the tax credit to 100%, enter 1.000.
Is the pension plan to be created a Labour fund?	If the answer is Yes, complete the fields Fed Income Tax Credit % Prov Income Tax Credit % Enter 15.0 to apply an additional tax credit of 15%.
Will Employment Insurance be calculated?	Employment Insurance premiums need to be deducted from employer contributions to an employee’s registered retirement savings plan (RRSP) except where employees cannot withdraw amounts from a group RRSP until they retire or cease to be employed, or if the RRSP agreement allows the employee to withdraw an amount from the RRSP under the Home Buyer’s Plan (HBP) or the Lifelong Learning Plan (LLP). If the employee cannot withdraw amounts, the contributions will be considered a not insurable benefit for Employment Insurance.1 Source : Government of Canada - Employers' Guide - Payroll Deductions and Remittances Thus, if you do not want Employment Insurance to be calculated, you need to set up a Collective RRSP pension plan. For more information, please read the Setting up a Coll. RRSP pension plan (Collective RRSP) section.

 

Setting up a RPP pension plan (Registered Pension Plan)

Contributions to a registered Pension Plan (RPP) are usually paid by the employee. Therefore, employer columns must remain empty.

If the pension plan is paid by the employer, you must use the DPSP type.

1. In the Define Pension Plan window, select RPP (Registered Pension Plan) in the Type field.

Impact of a RPP pension plan on the employee's cumulative amounts, if a credit factor is entered

Employee's cumulative amounts	RPP
	Employee	Employer
Federal Income Tax	(Salary) - (Employee's contribution x Federal credit factor)
Provincial Income Tax	(Salary) - (Employee's contribution x Provincial credit factor)

Impact of a RPP pension plan on government forms

RPP
Relevé 1	Note
D - RPP Contribution	Employee's Contribution
E - Québec income tax deducted	Calculates the income tax on taxable wages

 

RPP
T4	Note
20 - RPP Contributions	Employee's contribution
22 - Income tax deducted	Calculates the income tax on taxable wages
52 - Pension adjustment	Employee's contribution

 

Setting up a RRSP pension plan (Registered Retirement Savings Plan)

Contributions to a registered retirement savings plan are usually paid by the employee, but can also be paid by the employer.

An RRSP pension plan can also be used for a VRSP, for the contribution paid by the employee.

If the employee's contribution is different from the employer's contribution, we recommend creating two RRSP pension plans. One would be for the employee's contribution and the other for the employer's contribution.

1. In the Define Pension Plan window, select RRSP (Registered Retirement Savings Plan) in the Type field.

Impact of a RRSP pension plan on the employee's cumulative amounts, if a credit factor is entered

Employee's cumulative amounts	RRSP
	Employee	Employer
QPP/CPP	(Salary) + (Employer's Contribution)	(Salary) + (Employer's Contribution)
Federal Income Tax	((Salary) - (Employee's Contribution x Federal Credit Factor)) - ((Employer's Contribution x Federal Credit Factor) + (Employer's Contribution))
Provincial Income Tax	((Salary) - (Employee's Contribution x Provincial Credit Factor)) - ((Employer's Contribution x Provincial Credit Factor) + (Employer's Contribution))
Employment Insurance (EI)	(Salary) + (Employer's Contribution)	(Salary) + (Employer's Contribution)
QPIP	(Salary) + (Employer's Contribution)	(Salary) + (Employer's Contribution)
EHT/HSF (Québec)		(Salary) + (Employer's Contribution)
W/C - CSST		(Salary) + (Employer's Contribution)

Impact of a RRSP pension plan on government forms

RRSP
Relevé 1	Note
A - Employment Income	(Salary) + (Employer's Contribution)
B - QPP Contribution	Amount calculated on the QPP eligible amount
C - EI Contribution	Amount calculated on the amount eligible for Employment Insurance
E - Québec Income tax deducted	Calculated on the taxable wages
G - QPP pensionable earnings	(Salary) + (Employer's Contribution)
H - QPIP Contribution	Amount calculated on the QPIP eligible amount
I - QPIP Pensionable Earnings	(Salary) + (Employer's Contribution)
L - Other benefits	Employer's Contribution

 

RRSP
T4	Note
14 - Employment Income	(Salary) + (Employer's Contribution)
17 - Employee’s QPP contribution	Amount calculated on the QPP eligible amount
18 - Employee’s QPP contribution	Amount calculated on the amount eligible for Employment Insurance
22 - Income tax deducted	Calculated on the taxable wages
24 - EI Insurable earnings	(Salary) + (Employer's Contribution)
26 - CPP-QPP pensionable earnings	(Salary) + (Employer's Contribution)
40 - Other taxable allowances and benefits	Employer's Contribution
52 - Pension adjustment	**A receipt is provided by the pension plan administrator. Therefore, no amount on the T4
55 - Employee’s QPIP premiums	Amount calculated on the QPIP eligible amount
56 - PIPP insurable earnings	(Salary) + (Employer's Contribution)

 

Setting up a DPSP pension plan (Deferred Profit-Sharing Plan)

Contributions to a deferred profit sharing plan are paid by the employer. Therefore, no information should be entered in employee columns. Employer's contributions are considered a taxable benefit for the employee.

1. In the Define Pension Plan window, select DPSP (Deferred Profit-Sharing Plan) in the Type field.

Impact of a DPSP pension plan on the employee's cumulative amounts, if a credit factor is entered

Employee's cumulative amounts	DPSP
	Employee	Employer
Federal Income Tax	(Salary) - (Employer's Contribution x Federal Credit Factor) + (Employer's Contribution)
Provincial Income Tax	(Salary) - (Employer's Contribution x Provincial Credit Factor)+(Employer's Contribution)

Impact of a DPSP pension plan on government forms

DPSP
Relevé 1	Note
E - Québec income tax deducted	Calculated on the taxable wages

 

DPSP
T4	Note
22 - Income tax deducted	Calculated on the taxable wages
52 - Pension adjustment	Employer's Contribution

 

Setting up a Coll. RRSP pension plan (Collective RRSP)

Contributions to a Collective RRSP plan are paid by the employee or the employer.

Collective RRSPs do not affect employment insurance or the QPIP, in contrast to RRSP pension plans. If both the employee and the employer contribute to the Collective RRSP, two separate pension plans wil have to be created and assigned a different code.

1. In the Define Pension Plan window, select Coll. RRSP (Collective RRSP) in the Type field.

Impact of a Coll. RRSP pension plan on the employee's cumulative amounts, if a credit factor is entered

Employee's cumulative amounts	Coll. RRSP
	Employee	Employer
RRQ/RPC	(Salary) + (Employer's Contribution)	(Salary) + (Employer's Contribution)
Impôt fédéral	(Salary) - (Employee's Contribution) + (Employer's Contribution)
Impôt provincial	(Salary) - (Employee's Contribution) + (Employer's Contribution)
FSS (Québec)		(Salary)
Maximum CSST		(Salary)
CSST		(Salary)
Autres avantages		Employer's Contribution

Impact of a Coll. RRSP pension plan on government forms

Coll. RRSP
Relevé 1	Note
A - Employment Income	(Salary) + (Employer's Contribution)
B - QPP Contribution	Amount calculated on the QPP eligible amount
E - Québec income tax deducted	Calculated on the taxable wages
G - QPP Pensionable Earnings	(Salary) + (Employer's Contribution)
L - Other benefits	Employer's Contribution

 

Coll. RRSP
T4	Note
14 - Employment income	(Salary) + (Employer's Contribution)
17 - Employee’s QPP contributions	Amount calculated on the QPP eligible amount
22 - Income tax deducted	Calculated on the taxable wages
26 - CPP-QPP pensionable earnings	(Salary) + (Employer's Contribution)r)
40 - Other taxable allowances and benefits	Employer's Contribution
52 - Pension adjustment	**A receipt is provided by the pension plan administrator. Therefore, no amount on the T4

 

Setting up a LF pension plan (Labour Funds)

Contributions to a labour funds are paid by the employee or the employer. The difference between an RRSP and a Labour funds is that the employer's contribution is not considered a taxable benefit. The QPP, HSF and CNT do not include the employer's contribution and do not affect employment insurance or the QPIP.

1. In the Define Pension Plan window, select LF Pension Plan (Labour Funds) in the Type field.
2. In the Tax Credit % (federal or provincial) field, insert the applicable ta credit.

Impact of a LF pension plan (Labour Funds) on the employee's cumulative amounts, if a credit factor is entered

Employee's cumulative amounts	LF
	Employee	Employer
Federal Income Tax	Formula for determining the amount of income tax payable: ((Salary) - (Employee's Contribution x Federal Credit Factor) The tax credit will be applied to: (amount of income tax payable) -(% federal tax credit x employee's contribution)
Provincial Income Tax	Formula for determining the amount of income tax payable: ((Salary) - (Employee's Contribution x Provincial Credit Factor) The tax credit will be applied to: ((amount of income tax payable) - (% provincial tax credit x employee's contribution))

Impact of a LF pension plan (Labour Funds) on government forms

LF
Relevé 1	Note
E - Québec income tax deducted	Calculated on the taxable wages
G - Comment	Employer's Contribution

 

LF
T4	Note
22 - Income tax deducted	Calculated on the taxable wages
52 - Pension adjustment	**A receipt is provided by the pension plan administrator. Therefore, no amount on the T4

 

Setting up the VRSP

For an employee-paid contribution

To create a VRSP Pension plan, access the Define Pension Plan option.

maestro* > Time Management > Maintenance > Payroll > Define Pension Plan

1. Under the Main Fields tab, decide on a code for the pension plan and enter it in the Code field.
2. Enter the pension plan’s name in the Description field.
3. Also enter the pension plan’s name or its acronym in the On Stub field.
4. Select the RRSP (Registered Retirement Savings Plan) option in the Type field.
5. Enter 1 in the % Gross Earning field.
6. Enter 1 as factor in the employee’s Fed Credit Factor and Prov/State Credit Factor fields to provide a 100% tax credit on the RRSP contribution, or enter 0 to avoid applying a credit and only recover the taxes at the end of the year.
7. Select the Remittance Account in the appropriate field.

The Fringe Benefit Account or expense account is not required in cases where the pension plan is an employee plan. The latter consists in a deduction.

8. Click on the Save icon, then on Exit.

 

For an employer-paid contribution

To create a VRSP Pension plan, access the Define Pension Plan option.

maestro* > Time Management > Maintenance > Payroll > Define Pension Plan

1. Under the Main Fields tab, decide on a code for the pension plan and enter it in the Code field.
2. Enter the pension plan’s name in the Description field.
3. Also enter the pension plan’s name or its acronym in the On Stub field.
4. Select the DPSB (Deferred Profit Sharing Plan) option in the Type field.
5. Enter 1 in the % Gross Earning field.
6. Enter 1 as factor in the employer’s Fed Credit Factor and Prov/State Credit Factor field to provide a 100% tax credit on the RRSP contribution, or enter 0 to avoid applying a credit and only recover the taxes at the end of the year.
7. Select the Fringe Benefit Account* and Remittance Account in the appropriate fields.
8. Click on the Save icon, then on Exit.

If the employee and the employer both contribute to the VRSP, two separate pension plans will have to be created, each with their own different code. For any clarification or additional information on VRSPs, go to the Retraite Québec website: http://www.rrq.gouv.qc.ca/en/travail/rver/Pages/rver.aspx.

 

Tracking contributions to a pension plan

To track contributions made to a pension plan, two solutions are available:

1. A user can generate one of the Miscellaneous Reports and check the Print Bonuses option. It would then be possible to view the various bonuses for all employees and validate the totals, which are displayed at the end of the pension plan bonus report.

These reports can be accessed from the Miscellaneous Reports option:

maestro* > Time Management > Payroll > Payroll > Miscellaneous Reports

2. Another solution is to create a customized miscellaneous report in order to validate the amounts deducted for the employer and employee portions.

The customized miscellaneous reports are created through the Miscellaneous Report Generator option:

maestro* > Time Management > Payroll > Reports > Miscellaneous Report Generator

 

Associating a pension plan with an employee

This step is required to automate deducting the pension plan from the employee's pay. To associate a pension plan with an employee:

maestro* > Time Management > Maintenance > Payroll > Employee Management

1. In the Employee Management window, select an employee.
2. Click the Bonuses and Deductions tab and select the pension plan applicable to the employee.

Caution! If you specified a value of 1 in the Flat Rate, Hourly amount or %Gross Earning fields defined in the Define Pension Plan option, you must complete the Quantity column to enter the amount to be deducted for the employee. In the example below, the employee contributes an amount of $20 to his pension plan and his employer contributes $10 to the DPSP. For additional information on the various fields in this section, please refer to the Employee Management help topic.

3. Click Save.
4. Click Quit.

 

Setting up a pension plan outside Québec

For employees working outside Québec and for whom the pension plan is managed by a union, the pension plan must be set up in Union Management.

Unions manage Pension and RRSP pension plans . Tax reductions are automatically applied.

 

maestro* > Time Management > Maintenance > Payroll > Union Management

 

Determine the type of pension plan to be created

Question	Actions required
Who pays the contribution to the pension plan?	Contribution paid by the employee only Complete the Rate - Employee column Contribution paid by the employer only Complete the Rate - Employer column Contribution paid by both parties Complete the two Rate - Employee and Rate - Employer column.
How should the pension plan contribution be deducted?	Specify the calculation method to be used to contribute to a pension plan or an RRSP by selecting a value from the Mode column.
What type of pension plan should be created?	Select the pension plan type to be created. Click on a hyperlink to access the section: Setting up a pension plan Setting up a RRSP pension plan

 

Setting up a pension plan

Contributions to pension plan are usually paid by the employer, like a DPSP. The employer's contribution has no impact on the employee's cumulative amount or on the Relevé 1.

Therefore, employee columns and taxable benefits must remain empty.

Pay careful attention to the following columns:

Column	Select/Enter
Employer Rate	Enter the employer's contribution rate to the pension plan.
Type	Pension Plan (tax deductible)
Taxable Benefits	The columns must remain empty.
Tax Ben. Type	None

Based on the settings listed above, the employer's contribution is included in Box 52 on the T4 - Pension Adjustment.

RPP
T4	Note
52 - Pension Adjustment	Employer's Contribution + Employee's Contribution, if applicable

 

Setting up a RRSP pension plan

Contributions to a registered retirement savings plan are usually paid by the employee, but can also be paid by the employer.

If the contribution to an RRSP is paid by an employer, you must also complete the Taxable Benefit columns.

Pay careful attention to the following columns:

Column	Select/Enter
Employee Rate	Enter the employee's contribution to the RRSP.
Employer Rate	Enter the employer's contribution to the RRSP.
Type	RRSP
Taxable Benefits	Enter the employer's contribution in these columns to allocate the taxable benefits when the contribution to the pension plan is paid by the employer.
Tax Ben. Type	None

 

Employee's cumulative Amounts	RRSP
	Employee	Employer
QPP/CPP	(Salary) + (Employer's Taxable Benefits)	(Salary) + (Employer's Taxable Benefits)
Federal Income Tax	((Salary) - (Employee'sContribution)) + (Employer's Federal Taxable Benefits)
Provincial Income Tax	((Salary) - (Employee'sContribution)) + (Employer's Federal Taxable Benefits)
Employment Insurance (EI)	(Salary) + (Employer's Taxable Benefits)	(Salary) + (Employer's Taxable Benefits)
QPIP	(Salary) + (Employer's Taxable Benefits) In Québec, the provincial taxable benefits are used to perform the calculation. Outside Québec, maestro* uses the federal taxable benefits.	(Salary) + (Employer's Taxable Benefits)
EHT/HSF (Québec)		(Salary) + (Employer's Taxable Benefits)
W/C-CSST Maximum		(Salary) + (Employer's Taxable Benefits)
W/C-CSST		(Salary) + (Employer's Taxable Benefits)

Impact of a RRSP pension plan on government forms

RRSP
Relevé 1	Note
A - Employment Income	(Salary) + (Employer's Taxable Benefits)
B - QPP Contribution	Amount calculated on the QPP eligible amount
C - EI Contribution	Amount calculated on the amount eligible for Employment Insurance
E - Québec income tax deducted	Calculated on the taxable wages
G - QPP Pensionable Earnings	(Salary) + (Employer's Taxable Benefits)
H - QPIP Contribution	Amount calculated on the QPIP eligible amount
I - QPIP Pensionable Earnings	(Salary) + (Employer's Taxable Benefits)
L - Other benefits	Employer's Contribution

 

RRSP
T4	Note
14 - Employment income	(Salary) + (Employer's Taxable Benefits)
24 - EI insurable earnings	(Salary) + (Employer's Taxable Benefits)
26 - CPP/QPP pensionable earnings	(Salary) + (Employer's Taxable Benefits)
40 - Other taxable allowances and benefits	Box redefinition required to include the federal taxable benefit on the T4
56 - Gains assurables du RPAP	(Salary) + (Employer's Taxable Benefits)

 

Associating a pension plan with an employee in union management

This step is required to associate an employee with a union to automate the pension plan deduction.

maestro* > Time Management > Maintenance > Payroll > Employee Management

1. In the Employee Management, select an employee.
2. Click the Trades and Unions tab and select the union in either the Default Values section or in the grid if the Activate specific configurations by trade field is checked.
3. Click Save.

 

See also

• General Settings
• Define Pension Plan
• Union Management
• Employee Management

 

Formerly, How-to no. 15

Last modification: November 07, 2024