The Smart Benefit

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If you need assistance, please reach out using the form below. Or you can take a look at our Frequently Asked Questions and Resources below.

Frequently Asked Questions

A couple reasons, employers need ways to:

  1. Entice future employees to join their team and

  2. Create work environments current employees won’t want to leave.

There’s also a bigger picture need for this new type of benefit. Outstanding student loans are known to:

  • Delay or prevent normal life cycle events (economy suffers)

  • Delay or prevent normal financial growth (financial security suffers)

  • Aggravate stress levels of many young workers (productivity suffers)

Interest rates have fallen but average loan balances have risen by 40% as tuition costs climb. There’s also been a marked increase in the number of applications for the federal “Repayment Assistance Program”. This number is also expected to grow as workers are finding it increasingly difficult to manage and/or meet their financial obligations.

More than you might think, considering employers face a 58% probability of hiring anew grad with on average $28,000 in outstanding student loans. And as for people currently working – 25% of Millennials are still repaying student debt.

This is the genius of The Smart Benefit™ - it uses pre-existing employer savings plan contributions and repurposes them for the life of the loan. With the extra monthly payment, the loan is paid off earlier than expected, for less money than expected. Upon payback, employer contributions are redirected back to the savings plan.

An annual subscription is the only required cost outlay for employers since the funds to provide this benefit are already in place.

Yes! These days about 6 in 10 post-secondary graduates enter the workforce with student debt. Also, about 1 in 4 working Millennials is still repaying a student loan. The 1.3 million outstanding student loans in Canada total $30 Billion – both these numbers are growing.

Definitions

The popular choice among Canadian employers wanting to help employees save for retirement. A group RRSP is the collection of individual RRSPs that make up the group. Group RRSPs are administered by a registered financial institution.
Employers offer group savings plans to help their employees save for retirement. In Canada, the most common retirement savings plan is a Group RRSP (registered retirement savings plan) Many employers make contributions on behalf of employees to further help with retirement savings. Retirement savings plans are a highly desirable employee benefit.
The Canada Revenue Agency allows you to claim a non-refundable tax credit based on interest you have paid on student loans. However, only interest paid on loans received under the Canada Student Loans Act, the Canada Student Financial Assistance Act, and similar territorial or provincial programs qualify. If you have private, foreign, or any other type of student loan, the interest is not deductible. Additionally, if you combine student loans from any of the approved sources with an unapproved type of loan, you cannot claim the student loan tax credit. Report your qualifying student loan interest on line 319. This non-refundable tax credit helps to reduce the tax you owe but cannot result in a refund. If you don’t need the deduction, the CRA allows you to carry it forward for up to five years, meaning you can claim it on future tax returns.
The rate you pay for the use of money your lender has advanced. An interest rate is often expressed as an annual percentage of the principal. It is calculated by dividing the amount of interest by the amount of principal. Interest rates change because of inflation and Federal Reserve Board policies.
The length of time your lender requires for the full principal and interest to be repaid.
Six months* after leaving school, a student loan holder must begin repaying their student debt. The repayment schedule arranged with the lender dictates the required monthly payment. Having both federal and provincial student loans may result in two required monthly payments. *The six-month grace period for paying back loans is called the ‘six-month non-repayment period’.
Provincial Student Loans are offered by the Province or Territory to help students pay for post-secondary education at a designated college, university, or other qualifying post-secondary institution. Rules and regulations may differ based on provincial or territorial jurisdiction.
Canada Student Loans are offered by the Government of Canada to help students pay for post-secondary education at a designated college, university, or other qualifying post-secondary institution. Government student loans are based on assessed financial need.
The Canada Pension Plan is sponsored by the Federal Government of Canada and every working Canadian contributes to it with required CPP contributions on our paycheques. CCP contributions made while employed, will provide Canadians with a pension in retirement, or before.
DC pensions are the workplace pension plans of today. Pensions are subject to Federal or Provincial pension legislation and the Income Tax Act. In this type of pension, the contributions are known and the outcome (pension) won’t be known until retirement, or earlier. Employer contributions into DC pensions are separate from salary and thus do not create additional payroll tax; employee contributions are made pre-tax. Once contributions are locked-in, withdrawing money from these pension plans is limited to specific situations of need and circumstance, ensuring income in retirement.

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