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By Jason Heath, CFP on April 28, 2025
Estimated reading time: 5 minutes

By Jason Heath, CFP on April 28, 2025
Estimated reading time: 5 minutes

Maxing out employer contributions is an easy way to boost your retirement savings. Here’s how to do it without exceeding your RRSP room.

I have maxed out my RRSP deduction limit for the past two years due to my personal contributions and my company’s deferred profit sharing plan (DPSP). This year I stopped my RRSP contributions all together to not overcontribute on my end for the third year, but my company does a 4% match and then does a lump-sum payment every year as well. My question is: should I continue to overcontribute to my RRSP by 4% to get the 4% DPSP match, since they will do a lump-sum on top anyway? And then every year take out the overcontribution and fill out a T1-OVP?

—Kirsten

I can appreciate the dilemma here, Kirsten. You want to benefit from your employer’s contributions. However, registered retirement savings plan (RRSP) overcontributions can lead to significant penalties and should be avoided. Let’s break it down.

Employers have a few options for contributing to your retirement savings, including through a workplace pension plan, group RRSP matching and a deferred profit sharing plan (DPSP).

A group RRSP is sponsored by an employer who makes matching contributions to the account. Those contributions may be a default percentage of an employee’s salary or may be a percentage of an employee’s RRSP contributions up to a........

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