Why More Businesses Are Adding Group RRSPs to Employees
In today’s competitive job market, salary alone is no longer enough to attract and retain top talent. Employees are looking for benefits that support their health, well‑being, and long‑term financial security. While health and dental coverage remain essential, many businesses are now adding Group Registered Retirement Savings Plans (Group RRSPs) to their benefits packages.
A Group RRSP is an employer‑sponsored retirement savings plan that allows employees to contribute directly from their paycheque. Employers can choose to match contributions, making it an affordable and flexible way to help staff build their financial future. For small and mid‑sized businesses, it is a cost‑effective alternative to traditional pension plans.
Why Employers Choose Group RRSPs
Offering a Group RRSP signals that your business is invested in the long‑term success of your team. Employers often highlight three key advantages:
Attracting and retaining talent: Retirement savings are highly valued by employees, especially younger professionals who want to start building wealth early.
Supporting financial wellness: Automatic payroll deductions make saving simple and consistent, reducing stress about the future.
Cost‑effective design: Group RRSPs are flexible and can be tailored to fit the size and budget of your business.
Benefits for Employees
For employees, the advantages are clear:
Tax savings: Contributions are tax‑deductible, reducing taxable income.
Convenience: Payroll deductions make saving effortless.
Employer contributions: Matching programs provide an immediate boost to retirement savings.
Lower investment costs: Group RRSPs often provide access to institutional pricing, which means employees pay lower Management Expense Ratios (MERs) than they would in a personal RRSP. Even a small reduction in fees can compound into thousands of dollars in additional retirement savings over time, giving your team a meaningful financial advantage.
How Group RRSPs Compare
Unlike individual RRSPs, a Group RRSP is set up and managed by the employer, which simplifies administration for employees. Compared to pensions, Group RRSPs are more flexible and less costly to maintain, making them especially attractive for small and growing businesses.
Getting Started
Adding a Group RRSP to your benefits package does not need to be complicated. With the right guidance, you can design a plan that fits your budget, aligns with your company culture, and supports your employees’ financial goals.
Final Thoughts
Group RRSPs are more than just a retirement savings tool. They show that your business values its people and is committed to their future. By including a Group RRSP in your benefits package, you can strengthen employee loyalty, improve recruitment, and stand out in a competitive market.
At West Harbour, we support businesses across Ontario, Alberta, and Prince Edward Island from our offices in London, Goderich, and Burlington. Our team designs benefits packages that balance cost, compliance, and employee satisfaction. Contact us to learn how a Group RRSP can fit into your strategy.