3 things employers should know about workplace retirement savings plans

For many working Canadians, saving for the future isn’t only about discipline or good intentions. It’s about having access to a workplace retirement savings plan that makes saving easier to start and realistic to maintain.

A recent report found 58 per cent of working Canadians say not having a workplace pension limits their ability to save for retirement. Statistics Canada also reported that fewer than four in 10 paid workers in Canada were covered by a registered pension plan in 2023.

For employers, that creates an opportunity to look at a workplace retirement savings plan as part of total compensation. This kind of plan can help employees save through payroll, understand the value of employer contributions, and build long-term financial confidence. It can also support retention by showing employees there’s a plan for their future, not only their next paycheque.

And it doesn’t always mean a traditional pension. A group RRSP, Deferred Profit Sharing Plan, or pension-style plan can each support retirement savings in a different way.

Here are three things employers should consider when reviewing workplace retirement savings options.

1. Employees are more likely to save when the plan is built into work

Most employees understand the importance of saving for retirement. Many are also managing higher household costs, debt, housing, childcare, or support for aging parents.

This is also a confidence issue. Recent data from the Financial Consumer Agency of Canada found only a third of non-retired Canadians felt confident about their expected retirement income in 2024, and only 32 per cent had a good understanding of how much they needed to save for retirement.

Without a workplace retirement savings plan, employees have to take the first step on their own. They need to open an account, decide how much to contribute, choose investments, and keep the habit going over time. That’s a lot to manage along with everyday financial pressure.

A workplace retirement savings plan makes the path easier. Contributions can come directly from payroll. Employer contributions can encourage employees to participate, and plan education can help employees understand their options without leaving them to figure it all out alone.

For many employees, the structure is part of the value. It turns retirement saving from something they know they should do into something that’s already built into their pay.

2. The right retirement savings plan depends on the business

There isn’t one right way to offer retirement support.

A group RRSP can be a flexible starting point for a workplace retirement savings plan. Employees contribute to their own RRSP account through payroll deductions, and employers can decide whether to contribute as well, and at what level.

A Deferred Profit Sharing Plan, or DPSP, works differently. The employer contributes to the plan, while employee contributions aren’t permitted. Some employers use a DPSP to share business success with employees in a structured way.

A pension-style plan may provide more structure and predictability. Registered pension plans can be designed in different ways, including defined benefit and defined contribution models.

The best fit depends on the employer’s budget, workforce, and compensation goals. Some organizations want a simple way to help employees save. Others want a stronger retention tool or a workplace retirement savings plan that feels closer to a pension. The important part is choosing a plan that fits the business and is easy enough for employees to understand.

3. Retirement savings can strengthen compensation and retention

Employees pay attention to the full value of a role. Salary will always be important. So will health benefits, flexibility, paid time off, and the ability to plan for the future.

A workplace retirement savings plan can help employees see that their employer is investing in their long-term financial security. Employer contributions make that support more visible. When employees understand what the company is contributing and how that support can grow over time, the plan becomes easier to value.

Employees need to know how the plan works, what the employer contributes, and what steps they need to take. That calls for clear, practical communication during onboarding, plan reviews, and compensation conversations.

Planning ahead with purpose

A workplace retirement savings plan can help employees build financial confidence while strengthening the value of your compensation package.

The right approach should fit your workforce, budget, and business goals. Talk to a Westland Benefits advisor  to explore workplace retirement savings options for your team.