I work for a small business that currently offers no retirement plan. A few of my coworkers and I are more or less couch potato investors, but we each manage our own self-directed RRSPs or mutual fund RRSPs. Given that we're all of the same mindset, we would like to pool our funds to save costs and make it easier to diversify our investments. How can we pool our tax-deferred investments?

One of our ideas was to form an investment club that was completely independent of the company, but I don't know what we have to do to be able to hold investment club units inside an RRSP.

We also considered forming some type of defined contribution pension plan managed by the company, but my concern was that the overhead costs of that would eliminate the benefits of pooling our funds. Also at least one person would prefer not to do tax deferral.

There are about 5 of us who are talking about this. Our company is has about 15 employees, and I bet at least another 5 employees would participate if we implemented something.

I apologize if my question is kind of vague, but is there any ideas on how we can accomplish our goals? Thanks!

1 Answer 1


I'd listen to the person who doesn't want tax deferral. S/he is wise.

I'd do it in a taxable account. Talk about the investments all you want, pool your knowledge, but invest privately and separately.

Pay your taxes and be done with them.

  • Why avoid the tax deferral? Dec 25, 2010 at 17:19
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    Because it's merely an assumption that tax rates will be lower at retirement. I think it's a poor assumption.
    – mbhunter
    Dec 25, 2010 at 19:27
  • A poor assumption ... for Canada? BTW, there's another alternative: a Tax Free Savings Account (TFSA). It's like the U.S. Roth IRA. It's not tax-deferred (no deduction), but growth inside the account is completely tax free. Limits aside, it's far better than a plain-old taxable account, where taxes would be a drag on the growth. Dec 25, 2010 at 20:15
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    @mbhunter: A little too paranoid, methinks. TFSAs have no withdrawal penalties, just simple rules for how contribution room is calculated.
    – fideli
    Jan 24, 2011 at 8:27
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    @mbhunter Way too paranoid. First, what makes you think that the government that proposed "nationalizing" RRSPs wouldn't get voted out of office by the huge majority of people who have one. Second, if they could "nationalize" your RRSP, why wouldn't they do it to all your investments? Or are you keeping yours under the mattress? Mar 26, 2011 at 20:23

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