top of page

Building Resilience with Group Savings

Updated: May 12, 2022

Organizations need to attract and retain excellent teams, but polls show that employees would leave a current position for a similar position if it offered a group savings plan. We've simplified the process of designing, implementing, and managing group savings plans for dozens of client organizations.

Designing a plan takes just three steps and can mean the difference between losing great team members and taking a team to the next level.

Call us today to chat about designing a plan that fits your budget and increases employee engagement.

Canadians are looking for ways to prepare for retirement, and employers can play a role in helping them do that with ease. Polls show that employees would jump ship if they were offered a position at another organization that offered a group savings plan.

Being prepared for the future contributes to resilience and our ability to withstand challenges and tough times. Building resilience of our teams, combined with competitive pressures to attract and retain talent, suggests that group savings plan might provide an advantage to employers who want to differentiate themselves as an employer of choice.

Understanding what kinds of plans are being offered elsewhere can help you determine whether offering a group savings plan is right for your organization.

Sun Life recently released its Designed for Savings report – the most comprehensive look at group retirement plans offered across the country.

Three steps:

1) Determine budget: Your budget to allocate to your group savings plan is flexible. A savings plan can be put in place with as little as $10,000 of annual cash flow comprised of employer and employee contributions. If you have a taxable wellness account, you could allow employees to use that allowance towards RRSP or TFSA contributions.

2) Design the plan: With your philosophy and budget in mind, you next have to figure out which employees are eligible to join the plan and when.

  • Eligibility: key factors in deciding who is eligible to join your company’s group savings plan include turnover, competitive pressures, and the length of regular probationary period. Most organizations allow employees to decide whether they want to participate.

  • Plan type: The RRSP-only plan is most common, but in certain circumstances, a Deferred Profit Sharing Plan (DPSP) can assure the organization that matching contributions need only be made in profitable years. DPSPs also have a vesting feature, which gives up to two years for employer matching contributions to vest. That means that if an employee leaves prior to their 2-year anniversary, the money the organization has contributed towards the employee’s retirement plan reverts to the organization.

3) Review the plan and engage: As your advisors, we help ensure that you are fulfilling your obligation to review the plan periodically.

There are three main pillars of engaging employees with the plan and its value:

  • Match contributions: Most employers across all sectors match 100% of employee contributions up to a maximum percentage of earnings.

  • Communicate the value of the plan: regular communication regarding the ease of payroll deductions, immediate tax savings and employer contributions.

  • Select a suitable carrier: Insurer platforms vary with respect to capabilities, ease of access, and fund lineups. Choosing an insurer who can offer ease of use, built-in and engaging financial literacy content, and robust investment options helps employees sign up and stay involved.

Establishing a group savings plan need not be an overly-complicated nor costly endeavor. At Vital Partners, we’re with you the whole way.

Want to learn more? Sun Life’s whole Designed for Savings report can be found here.


bottom of page