Final answer:
Group RRSP/DPSP combinations are popular in Canada due to regular employer contributions, tax deferral, investment growth potential, and portability, similar to US 401(k)s and 403(b)s.
Step-by-step explanation:
Group RRSP/DPSP (Registered Retirement Savings Plan/Deferred Profit Sharing Plan) combinations are popular in Canada due to several key reasons that are also relevant to why similar plans like 401(k)s and 403(b)s are popular in the United States. These defined contribution plans involve regular employer contributions to a retirement account, which are matched at times by employee contributions. The funds from these contributions are invested in a variety of investment vehicles, allowing for potentially higher returns. Additionally, these plans are tax deferred, meaning that they are not taxed until withdrawal, which is typically during retirement when the individual may be in a lower tax bracket. Another advantageous feature of RRSP/DPSP combinations, like their US counterparts, is their portability. This means if an employee changes jobs, they can take their retirement savings with them, making it a flexible option for today's mobile workforce. The potential for investments to outpace inflation is another key benefit, as retirees are less likely to be burdened by the eroding effects of inflation on their savings.