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What is the Government-Sponsored Retirement Arrangement (GSRA)?

The GSRA [1] or Government-Sponsored Retirement Arrangement is a Canadian retirement plan [2] designed for people who are paid by public funds but are not part of the local, provincial or federal government. Not registered with the Canadian Revenue [3] Agency, the regulations placed upon GSRAs [1] decrease how much of a person’s retirement fund qualifies for tax deferred [4] status.

Many countries have established funds for citizens and others who work within the country. These funds are designed to provide income [5] for retirement. These plans require the individuals to contribute throughout their lives in order to qualify for benefits later. The GSRA is similar in nature to the US Social Security [6] plan, which is the largest government-sponsored plan around.

Contributions made to the GSRA are not tax deductible. When an employee makes contributions to a GSRA they are limited in how much they can put into Canada’s other retirement plan, the RRSP.

Canadians have several options when it comes to government supported retirement savings plans, although some areas such as Quebec opt out of the state sponsored arrangements. The Old Age Security and Guaranteed Income supplements offer seniors a minimum income, but it is not really enough. The Canada or Quebec Pension Plan require mandatory contributions and provide additional benefits, such as disability and survivor benefits.

Registered pension and savings plans as well as income funds are also available to Canadian workers. Together, all these plans are designed to make sure that retirees have more than enough to enjoy their retirement, assuming that they start saving in non-governmental plans early on.