Why Retirement Planning Should Be Every Employer’s New Year’s Resolution

Every January, we’re encouraged to make big resolutions. But despite our best intentions, most of them don’t last. For employers, one resolution worth making and sticking to is helping their employees plan for retirement.

It’s one of the smartest ways to build financial confidence in your team and show your people you’re invested in their future, and not just this year’s results.

A growing priority in workplaces

Most employees know they should be saving for retirement. Far fewer feel confident they’re doing enough or even doing it well.

Between housing costs, everyday expenses and personal debt, long-term planning is slipping down the priority list for many Canadians. That pressure doesn’t always stay at home, either. It can show up in the workplace as a distraction and delayed retirement decisions.

Research shows Canadians with access to a workplace retirement plan are significantly more likely to retire with enough savings. When you support your team’s retirement planning, you can help ease some of that stress. You could also see the payoff in stronger engagement and higher retention.

What employee retirement support looks like

Most small to mid-size businesses start with simple business retirement solutions like these:

Group RRSPs

A Group RRSP is a Registered Retirement Savings Plan offered through your workplace. Employees contribute through payroll deductions, so saving happens automatically. Employers can choose to contribute, but they don’t have to.

Group RRSPs are easy to set up and simple to manage. For employees, saving feels effortless. For employers, they offer value without the complexity of a formal pension plan. It’s often the fastest way to help employees start building retirement savings.

Defined Contribution Plans

A Defined Contribution plan is a workplace retirement plan where the employer commits to contributing a set amount for each employee. The employer contributes a fixed percentage or dollar amount to each employee’s retirement account. Employees can usually contribute as well.

The money is invested, and the final retirement balance depends on how much goes in and how the investment performs. DC plans create a strong sense of shared commitment. Employees see regular employer contributions and feel supported for the long term. Employers get predictable costs and a retention tool that encourages people to stay and grow with the business.

Employer Matching or DPSP

Employer matching means your company matches some or all of what an employee contributes to their Group RRSP or DC plan. A DPSP, or Deferred Profit Sharing Plan, is a registered plan where the employer shares a portion of company profits by contributing to employees’ retirement savings.

With matching, if an employee puts in a set amount each pay period, the employer adds extra on top, usually up to a limit. With a DPSP, only the employer contributes, often based on business performance for the year. In both cases, the money is invested and grows tax-deferred until retirement.

This is a practical way to show commitment without locking into fixed pension costs. Matching encourages employees to save more, and DPSPs let employers reward employees in strong years while keeping flexibility in slower ones.

Why financial literacy makes benefits more valuable

Offering a retirement plan is only part of the job. Employees also need to understand how to use it.

Financial support can be simple and practical:

Plain language explanations of RRSPs, TFSAs and employer-sponsored plans

Most employees hear these terms but aren’t always sure what they mean. Financial literacy starts with breaking down the basics. What exactly is a Group RRSP? How does a TFSA work? When employees understand how these accounts work and how they fit together, they feel more confident making decisions instead of putting them off.

Guidance on how much to contribute at different life stages

Saving looks different at 25 than it does at 45 or 60. Employees want to know what’s reasonable for where they are right now. Simple guidance, like suggested contribution ranges or examples for early career, growing families and pre-retirement stages, helps your people move from “I should save” to “here’s what I can do this paycheque.”

Education on balancing retirement savings with debt and everyday expenses

It’s common for employees to feel stuck choosing between paying down debt, covering monthly bills and saving for the future. But it doesn’t have to be all or nothing.

Recent research found Canadians’ financial confidence is at its highest level since 2021, driven in part by stronger financial literacy, even as economic uncertainty continues. That’s a strong sign that education works.

Education can show how to balance priorities, build habits and make progress on more than one goal at a time. That takes retirement savings from feeling impossible to feeling manageable. When employees understand their options and see a clear path forward, participation goes up, and so does the value of your benefits program.

Start the year with a smarter benefits conversation

In January, many of us are thinking about goals and fresh starts. It’s a great time to look at how you support employees’ financial well-being.

Ask yourself a few questions to get started:

• Is our retirement plan easy to understand?
• Are contribution levels realistic for our workforce?
• Are we supporting employees at different life stages?

Making retirement planning a New Year’s resolution starts with understanding what works for your employees.

At Prime Benefits Group, we can work with you to create a plan that fits your workforce and your budget. Reach out to our team to get started.