The Rogers Employee Share Accumulation Plan (ESAP) is easily one of the best benefits available if you work for Rogers. Not only does Rogers match you a generous amount, but the Rogers ESAP is also available to just about every employee, so it can be highly lucrative regardless of your position.
I personally gained tens of thousands of dollars from the program, but many people I know who worked for the company didn’t bother signing up. Their thinking was that they weren’t sure how long they would be with Rogers, so it wasn’t worth it. This was a ridiculous way to look at things as they were giving up free money.
To be clear, I’m not a spokesperson for Rogers. I’m a former employee who took advantage of the Rogers ESAP. The information below was accurate at the time of writing, but note that Rogers could change the program at any time. If you’re looking for general information about employee stock purchase plans (ESPP), check out this guide. Here’s everything you need to know about the Rogers ESAP.
How the Rogers ESAP works
Under the Rogers ESAP, eligible employees can contribute between 1-10% of their gross salary (pre tax). How much you choose to put towards the plan is up to you. The percentage can be changed whenever you want via the Sun Life dashboard where your benefits are handled.
How much Rogers matches depends on how long you’ve been in the program.
|Time in the program||Rogers match %|
As you can see, as soon as you join, you’re getting a 25% match from Rogers. After one year, you’re at 33%. You max out after two years in the plan at 50%.
The money you contribute is automatically deducted from every paycheque (every two weeks). However, shares are only purchased once a month. The Rogers portion of the match is added at the time of purchase- so once a month. The shares purchased are RCI.b which are Class B Non-Voting shares.
What’s interesting is that you can actually buy fractional shares as part of the plan and there are no trading fees whatsoever. This is significant since you can’t buy fractional shares with other brokerages, and there would usually be fees when buying and selling your shares. That said, some discount brokerages charge low fees.
The match from Rogers has a one year vesting period. What that means is that you can’t withdraw the Rogers portion until one year has passed. You can access what you put in at any time. Generally speaking, once you get to the two-year mark, you’ll have a pretty big bank of Rogers shares that you can access.
Maximizing the Rogers Stock Plan
This should be obvious, but contributing the maximum amount of 10% of your gross income is what you should strive for. By doing this, you’re getting as much free money out of Rogers as possible.
For example, let’s say you’re contributing 10% and you’ve been in the Rogers ESAP for two years. Since Rogers matches your contributions by 50%, you’re basically giving yourself a guaranteed raise of 5% every single year (50% of 10% = 5%).
Understandably, many people have tight budgets so setting aside 10% of your income towards the Rogers stock plan can be difficult. However, due to the match, you need to do whatever you can to free up some of those funds.
One suggestion I have is to stop contributing to your Registered Retirement Savings Plan and your Tax-Free Savings Account. This may sound odd, but as I’ll explain further below, you could end up much further ahead by focusing on the ESAP. Alternatively, you slash all of your expenses to free up some cash flow which may allow you to max out the ESAP.
Diversifying your portfolio
A lot of people slam Rogers, but there’s no denying that the ESAP is very generous. Not many companies allow you to contribute up to 10% of your income and a 50% match is quite rare. While this is an extremely attractive program, you should be mindful about keeping all your eggs in one basket.
The last thing you want is to have the bulk of your net worth in your company’s stock. Rogers may appear like a corporation that has no chance of failing, but I’m sure Nortel and Research in Motion employees thought the same thing. You should plan to withdraw some of your shares on a regular basis.
When I was with the company, I would typically withdraw 25-50% of my shares every December. I don’t remember the exact numbers, but it worked out to roughly $10-15,000. With that money, I would max out my TFSA and contribute to my RRSP. This made the most sense to me as I was able to max out the Rogers ESAP and then I focused on all my other accounts. I even paid down my mortgage by selling some of my shares.
It’s probably a good idea to adopt a similar strategy. What you invest in is up to you. Heck, if you spend the money on a vacation, it’s still worth it since Rogers would have funded part of it. If you want to reinvest your money instead, I recommend using a robo advisor such as Wealthsimple or Justwealth.
Withdrawing your money
Withdrawing your money from the Rogers employee stock plan is easy. You can either log in to your Sun Life Wealth Accumulation Plan online or call Sun Life directly to have your funds withdrawn.
Note that there are some small fees when you withdraw:
- Cash withdrawals incur a $25 withdrawal fee for the 1st transaction per day plus a $0.025 per share brokerage commission fee.
- For each subsequent cash withdrawal/external transfer on the same day, $15 withdrawal fee will apply.
- External in-kind transfers are $40 and share certificate requests are $75. There is no fee for internal in-kind transfers to the Global RRSP or Rogers TFSA
The cash is sent directly to your bank account if you have direct deposit set up. Note that this is different from your payroll direct deposit. If you’re withdrawing for the first time, you’ll want to set up your accounts so everything goes smoothly in the future. Alternatively, you could request a cheque, but it may take a few weeks to arrive.
Assuming that the value of your stock has gone up since you purchased it, you would pay capital gains. In case you’re not familiar, 50% of your gains are taxable. Let’s say your stock went up in value by $5,000. 50% of that, or $2,500 is taxable at your marginal tax rate.
Also note that the employee match is a taxable benefit, but those taxes are taken at the source. The good news is that you don’t need to worry about any paperwork as Rogers will send you all the right tax slips during the tax season.
Will I lose money by joining the Rogers ESAP?
While it’s entirely possible that the value of your Rogers Shares may go down, it’s highly unlikely due to the matching portion of the ESAP. Remember, you get a 25%, 33%, and 50% match instantly depending on how long you’ve been in the Rogers ESAP.
Let’s say you’ve maxed out the plan. For every $100 you put in, Rogers puts in an extra $50, so you have a total of $150. The value of your stock would have to drop by at least $50 (33%) before you technically lose any of your own money. The odds of that happening are quite slim.
Like any other stock, the price will go up and down on a daily basis. That’s just how the stock market works. The Rogers match will almost always put you ahead, but if you’re diversifying your portfolio every year, you’d be minimizing your risk.
Is joining the Rogers ESAP worth it?
It should be pretty clear by now that you should join the Rogest ESAP as soon as you can. Even if you’re not sure how long you’ll be with the company, you should still join as it’s near impossible to lose money. Say what you want about the company, but there’s no denying that the stock plan is excellent.