Your employer matches your contributions. Great. But the funds they picked charge 2%+ MER and the "advisor" assigned to your plan gets a trailer fee every year. Here's how to make the best of it.
About 6 million Canadians have a workplace retirement plan — a group RRSP, DPSP (Deferred Profit Sharing Plan), or defined contribution pension. Most are administered by Sun Life, Manulife, Canada Life, or Desjardins.
These plans typically offer 15-30 mutual funds, nearly all with MERs between 1.5% and 2.5%. You didn't pick these funds. Your HR department did, probably based on a pitch from a group benefits advisor who earns commissions on the assets.
But here's the thing most Reddit advice misses: the employer match usually outweighs the high fees. If your employer matches 50% of your contributions up to 6% of salary, that's an instant 50% return. No ETF on earth beats that.
The answer depends on whether you still work there.
If your employer matches contributions, stay in the group plan and maximize the match. A 100% match with a 2.2% MER fund still crushes a 0.20% MER ETF with no match. It's not close.
Example: You earn $80,000 and contribute 5% ($4,000/year). Employer matches 100%. That's $8,000/year going in. Even if the fund charges 2.2% MER ($176/year on the first year), you made $4,000 in free money. Take the match.
Some employers offer a group RRSP with no matching — just a group of pre-selected funds. The only advantage is payroll deduction convenience and sometimes slightly lower MERs than retail (some group plans negotiate institutional pricing around 1.0-1.5% MER).
If the MERs are still 2%+, consider contributing only to the group plan for the payroll deduction, then doing a periodic transfer to a personal RRSP at a discount brokerage. Some plans allow in-service withdrawals — check your plan booklet.
Once you leave a job, there is zero reason to stay in the group RRSP at 2%+ MER. Transfer to a personal RRSP at Questrade, Wealthsimple, or TD Direct Investing and buy low-cost ETFs or low-fee mutual funds.
This is non-negotiable. Every year you leave $100,000 in a 2.2% MER group plan after leaving costs you ~$2,200 in fees. In a 0.20% ETF, that's $200. You're burning $2,000/year for nothing.
You can't add ETFs to a group RRSP. But you can choose the least-expensive funds from the menu. Here's how:
Log into your plan's website (Sun Life, Manulife, Canada Life, etc.). Click on each fund and look for "Management Expense Ratio" or "Fund Facts." Write down every fund's MER.
Look for index funds, bond index funds, or target-date funds with MERs under 1.5%. They exist in many group plans but nobody tells you about them. The plan's "default" fund is almost always one of the most expensive.
Pick the cheapest Canadian equity index, the cheapest US/international equity option, and the cheapest bond fund. Split based on your age (younger = more equity). Don't overthink it — the MER matters more than the exact allocation.
Pro tip: Some group plans offer a "passive" or "index" tier that HR never mentions. At Sun Life, look for "BlackRock" or "State Street" funds in the lineup. At Manulife, check for "Index" in the fund name. These can be 0.5-1.0% cheaper than the default active funds.
Log in every January, check if your allocation has drifted, and rebalance. That's it. Total time commitment: 15 minutes per year.
| Fund Type | Typical Group MER | Retail MER | ETF Equivalent |
|---|---|---|---|
| Canadian Equity (active) | 1.50–2.30% | 2.00–2.50% | XIC 0.06% |
| Canadian Equity (index) | 0.50–1.20% | 0.66–1.05% | XIC 0.06% |
| US Equity (active) | 1.60–2.40% | 2.10–2.50% | VFV 0.09% |
| Balanced / Target Date | 1.80–2.30% | 2.00–2.50% | XGRO 0.20% |
| Bond (active) | 0.80–1.50% | 1.20–1.70% | ZAG 0.09% |
| Money Market / GIC | 0.30–0.80% | 0.50–1.00% | — |
Group plan MERs are sometimes slightly lower than retail because the employer negotiated institutional pricing. But "slightly lower than 2.3%" is still expensive.
Your group plan might contain a mix of:
Open a self-directed RRSP (and LIRA if needed) at your preferred brokerage. Questrade, Wealthsimple Trade, and TD Direct Investing all accept transfers. Questrade and Wealthsimple reimburse transfer-out fees up to $150.
Fill out the transfer form at your new brokerage. They'll contact your old group plan provider (Sun Life, Manulife, etc.) to pull the funds. Expect 2-4 weeks. The transfer happens "in cash" — your old funds are sold and the cash is sent.
Tax trap: Make sure this is a direct transfer (trustee-to-trustee), not a withdrawal. If you cash out, your group plan provider will withhold 10-30% for tax, you lose the RRSP room forever, and the full amount is added to your taxable income. Always transfer directly to another registered account.
Once the cash arrives at your new brokerage, buy your ETFs or low-fee mutual funds. Don't leave it sitting in cash — every month uninvested is a month of lost growth.
LIRA money is locked in until you're at least 55 (varies by province). You can't withdraw it early except in specific hardship cases. But you can invest it in low-cost ETFs instead of leaving it in expensive group plan funds. Same transfer process — just make sure the receiving account is a LIRA, not a regular RRSP.
Some group plans allow in-service withdrawals or periodic transfers while you're still employed. If yours does, you can:
This gives you the best of both worlds: free employer money plus low fees on the invested balance. Not all plans allow this — check your plan booklet or ask HR. The transfer form is usually on your plan provider's website.
Watch for vesting schedules. Some employer matching contributions don't fully vest for 2+ years. If you transfer out before vesting, you lose the employer's portion. Read the fine print.
Plug your group plan's MER into our calculator to see how much you'd save by switching to a low-cost alternative.
MER Fee Calculator Low-Fee AlternativesNothing on this site is financial advice. Group RRSP rules vary by employer and plan provider. LIRA withdrawal rules are provincial. Consult your plan booklet or a licensed advisor for plan-specific questions. Some links on this site are affiliate links.