70% of Canadians say they’re willing to forgo a higher salary in exchange for a workplace savings plan, and employers offering retirement benefits are seeing stronger productivity. In this post we discuss the value of group savings plans.
With employers focused on retaining staff they’ve worked hard on integrating into their organizations, many are looking at what they can do to make people stay.
With Canadian debt levels at an all-time high, workplace savings plans can be an easy way to help. In fact, 70% of Canadians say they’re willing to forgo a higher salary in exchange for a workplace pension plan.
According to a recent survey, a secure retirement remains of greater concern for Canadians than their health, debt, and job security.
The vast majority of employers surveyed indicated that retirement benefits are very or extremely important to recruitment, retention, and the stress management of employees.
Maru Group recently conducted a survey on behalf of Healthcare of Ontario Pension Plan. Of the respondents, 44% of employers who offer retirement benefits said they are seeing better productivity than last year. Only 29% of employers who don’t offer group savings reported higher productivity.
Benefits to Employers
Beyond attraction, retention, and productivity, group savings plan offerings can be part of that all-important fixed contribution towards total compensation of employees.
The amount that an employer contributes towards savings can be capped and only increase if you want.
Administration of these plans is straightforward, and many insurers offer paperless enrolment, excellent plan member sites, and can provide excellent support when it comes time to review the plan.
Using a Deferred Profit Sharing Plan (DPSP) also protects employers who are worried about facing tough times in the future. Company contributions are only freed up when the organization is profitable, which also helps align employee success in the form of added retirement savings with your organization’s success.
Finally, DPSPs allow employers to extend the vesting period to up to two years. That just means that any contributions that you make during the vesting period would revert back to your organization if the employee leaves before two years.
We’d love to hear from you! Contact us for information about how a group savings plan can be integrated into your 2022 plans.