Building financial well-being at work: The case for group retirement plans

In today’s competitive job market, attracting and keeping great employees takes more than a good salary and benefits plan. Increasingly, people want to work for companies that care about their long-term well-being, including their financial future.

That’s where a group retirement program can make a real difference.

While most mid-sized employers offer group health benefits, not all have taken the next step of implementing a retirement savings program. Yet for many businesses, adding one can be a smart move: it can help employees feel more financially secure while strengthening recruitment, retention and overall engagement.

Supporting financial well-being

Money worries are one of the biggest sources of stress for Canadians. According to the 2025 Financial Stress Index from FP Canada, 40% of Canadians say money is the top source of stress in their lives, and 48% report losing sleep over financial worries.¹ Employers who offer retirement savings programs send a strong message: We’re invested in your future.

When employees have an easy way to save for retirement directly from their paycheque, it helps them take meaningful action toward their goals. That financial confidence often translates into improved focus, productivity and loyalty at work.

In other words, supporting your employees’ long-term financial well-being isn’t just the right thing to do. It’s good business.

Why employers should consider offering a plan

Adding a group retirement program can deliver value to both the organization and its people. Some of the most common advantages include:

1. Company contributions

Matching or contributing to employee plans shows commitment to their success. Even modest contributions can make a significant difference over time, especially with the power of compounding.

2. Lower investment costs

Because assets are pooled, plan members benefit from competitive management fees that are often lower than what they’d pay individually. That means more of their money stays invested and working for them.

3. Simple, automatic saving

Payroll deduction makes saving effortless. When contributions are automatic, employees are less likely to skip them, which allows their savings grow steadily in the background.

4. Professional oversight and easy-to-understand options

Plans are administered through reputable providers with access to diversified investment choices and clear education materials. Employees don’t have to be investment experts to make smart decisions.

5. A valuable recruitment and retention tool

A thoughtfully designed plan can set your business apart. For many professionals, a strong retirement program signals stability, care, and a long-term mindset: all attributes that attract and retain top talent.

Common types of group retirement plans

There’s no one-size-fits-all solution. The right plan depends on your organization’s goals, workforce demographics and budget. Here’s an overview of some of the most common structures:

Group RRSP (Registered Retirement Savings Plan)

A familiar and flexible option, Group RRSPs allow employees to save through payroll deduction and receive immediate tax relief. Employers can choose to contribute, and funds are fully portable if an employee leaves the company.

Considerations: Employer contributions are taxable to the employee and withdrawals are allowed anytime (which can be both a benefit and a drawback). Any amount an employee withdraws will be included as income for tax purposes. They'll also pay a withholding tax on the amount they withdraw and will lose the contribution room they originally used to make the contribution.

RRSP/DPSP combination

Pairing a Deferred Profit Sharing Plan (DPSP) with a Group RRSP can be highly effective. Employer contributions go into the DPSP, where they aren’t immediately taxable to the employee and can be subject to a vesting period. Employee contributions go into the Group RRSP.

Considerations: The DPSP adds flexibility and potential tax advantages for the employer while encouraging employee retention through vesting rules.

RPP (Registered Pension Plan)

An RPP provides a structured, long-term approach to retirement savings. Contributions are often higher, and plans can be set up as either defined contribution (DC) or defined benefit (DB) depending on the employer’s objectives.

Considerations: RPPs are more complex to administer and require regular filings, but they can offer significant value, particularly if you want to provide stable retirement income for long-term employees.

Group TFSA (Tax-Free Savings Account)

A great complement to an RRSP or DPSP, a Group TFSA allows employees to save after-tax dollars that can be withdrawn tax-free at any time.

Considerations: While not specifically for retirement, TFSAs support flexible saving and can appeal to younger employees or those looking to balance short- and long-term goals.

Making the right choice for your organization

Choosing the right plan starts with understanding your business’s needs and culture. What message do you want to send your employees? Are you focused on retention, financial education, or aligning a plan with your broader well-being strategy?

We help employers evaluate plan types, contribution structures, and provider options. We also ensure your program is cost- and tax-efficient, and that it integrates smoothly with your group benefits offering.

Beyond design, we believe education is key. When employees understand how their plan works – and how it fits into their personal goals – participation and satisfaction rise significantly.

Helping employees thrive

When businesses invest in the physical, mental, and financial well-being of their employees, everyone benefits. A well-designed group retirement program extends that commitment, helping employees plan confidently for the future.

Ready to explore what’s possible? Let’s start the conversation.

Source

1. FP Canada 2025 Financial Stress Index. March 18, 2025. FP Canada. https://www.fpcanada.ca/docs/professionalsitelibraries/fsi/fsi-2025-results-deck---fp-canada.pdf?sfvrsn=6dcbedee_2.