Canadian companies are constantly seeking ways to attract and retain top talent. While salary remains a key factor, employees are increasingly looking for financial security beyond their pay cheques.
One of the most impactful ways employers can support their workforce is by offering group retirement plans. These programs—such as pension plans, Registered Retirement Savings Plans (RRSPs), and Tax-Free Savings Accounts (TFSAs)—play a crucial role in fostering long-term financial wellness.
The importance of group retirement plans.
For many employees, saving for retirement can be daunting. Rising living costs, student debt, and day-to-day expenses often take priority over long-term financial planning. Without employer support, workers may struggle to set aside enough for retirement, leaving them vulnerable in their later years. By offering structured group retirement plans, companies help employees build financial security while benefiting from tax advantages and potential employer contributions. These plans also provide a disciplined approach to saving, making it easier for employees to prepare for the future.
Key group retirement options for companies.
Registered Pension Plans (RPPs)
RPPs are employer-sponsored retirement plans designed to provide employees with a steady income after they retire. These plans often include employer contributions, making them an attractive benefit for employees who might not otherwise save enough for retirement.
There are two main types:
Defined Benefit Plans:
Guarantee a specific income in retirement, based on salary and years of service.
Defined Contribution Plans:
Allow employees and employers to contribute a set amount, with retirement income depending on investment returns.
Group RRSPs
A group RRSP functions similarly to an individual RRSP but is administered through the employer. Employees can contribute a portion of their salary on a tax-deferred basis, reducing their taxable income. Many employers choose to match contributions up to a certain percentage, further incentivizing employee participation.
Tax-Free Savings Accounts (TFSAs)
TFSAs offer a flexible savings option for employees. Unlike RRSPs, contributions are made with after-tax income, but withdrawals (including investment growth) are tax-free. Employers can support employees by offering payroll deductions into a group TFSA, encouraging regular savings.
A tool for attracting and retaining talent.
Beyond financial security, group retirement plans serve as a powerful recruitment and retention tool. In a competitive job market, employees are more likely to choose an employer that offers robust benefits, including retirement savings support.
Attracting top talent.
Job seekers today prioritize financial wellness benefits when evaluating job offers. A well-structured retirement savings plan signals that a company values its employees’ future, making it a more attractive place to work.
Boosting employee retention.
Employees who feel supported financially are more likely to stay with a company long-term. Offering a competitive group retirement plan reduces turnover, saving businesses the costs associated with recruiting and training new staff.
Enhancing employee engagement.
Employees who have financial peace of mind are more engaged and productive at work. Stress about money can lead to distractions and decreased morale, whereas strong retirement benefits foster loyalty and overall job satisfaction.
Let Navy & Sage Benefits be your guide.
Providing group retirement plans is more than just a perk—it’s a strategic investment in both employees and the business. By offering pension plans, Group RRSPs, and TFSAs, Canadian companies can help employees build financial security while strengthening their ability to attract and retain top talent.
Companies that prioritize employee financial wellness will set themselves apart as employers of choice. If you’re a business owner or HR leader, now is the time to explore how group retirement plans can benefit both your employees and your bottom line. Contact Navy & Sage Benefits today to get started.
