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?! Okay, maybe not the best examples but we ARE here to help!