It's really quite simple...according to the CRA, contributions must be fair and equal amongst classifications.
That means that Members on a Plan must all receive the same contribution amount OR the different contribution levels must be distinguished by classifications defined by the administrator/owner of the Plan. In Blendable-speak, that's the Plan Sponsor.
Classifications are pretty easy to define - we promise!
The most common classifications we see are by
- job position
- status (i.e part-time, full-time)
- level (i.e. administrative, senior management, executive)
- and family status (i.e. single, couple, family)
For an example scenario, everyone on a Plan can receive the same $150.00 monthly contribution and be within the Employee classification. On the other hand, junior level employees within the Entry level classification might receive $100.00 monthly contributions, whereas senior level employees within the Senior classification may receive $200.00 monthly in contributions.
Again, classifications are defined by the Plan Administrator/Plan Sponsor and are meant to be a fair and equal delegation for all employees on a Plan.
Confused? Don't be! We're here to help and can even come up with some fun and unique classification levels if you really want...Cookie Monster Classification, Frankenstein Classification, Goofy Classification. See?!