Retirement Plans Are Now a Hiring Advantage. Are You Keeping Up?

---

More than half of Canadian employees don’t have access to a workplace pension plan. Even among those who do, many aren’t sure how much income they’ll need in retirement, or how to get there. That gap is impacting how employees evaluate their future and what they expect from their employers. 

Employers that offer well-structured retirement savings options, and take the time to explain how they work, are in a stronger position to attract and retain experienced talent while supporting financial wellbeing across their workforce.

Retirement uncertainty is showing up at work

Retirement planning isn’t something employees are putting off. It’s showing up much earlier in their careers. Even Gen Z is trying to get a head start.

But the path forward isn’t always clear. Between economic uncertainty, inflation, rising living costs and market volatility, many are left wondering what “enough” actually looks like. More of the responsibility continues to shift toward individual savings, adding to the pressure.

That pressure shows up at work, often in subtle ways. Employees may feel distracted or carry a higher level of day-to-day stress as they think about whether their working years will translate into the ability to retire at all.

In more visible ways, it can lead to employees staying in the workforce longer than they had planned because they don’t feel financially ready to step away.

Why employers should take a closer look

Workplace retirement plans are taking on a much more visible role in total compensation. Employees are asking more questions about long-term financial support as they move through their careers and think more seriously about what comes next.

Even among employees who do have access to a workplace pension or retirement plan, many aren’t clear on what they have, how it works, or what it actually means for their future income. That combination of access without understanding creates a challenge.

For employees, it can lead to uncertainty and missed opportunities to make informed decisions. For employers, it can mean that a valuable benefit isn’t fully recognized or appreciated for what it is. 

What employers can offer

The good news is there are practical, flexible ways to support employees as they build long-term financial security. In many cases, it starts with meeting people where they are.

Group RRSP

• A Group RRSP is often the most practical place to start. It offers a simple way to save through payroll, with contributions made before tax, making it easier to build the habit over time.

• When employers offer matching contributions, it not only encourages participation, but also shows the organization is invested in employees’ long-term financial wellbeing.

• Employers may want to consider how much to match, who is eligible and when, and how investment options are presented so employees feel confident getting started. 

Deferred Profit Sharing Plan (DPSP) 

• A DPSP is funded entirely by the employer and allows companies to share a portion of profits by contributing to employees’ long-term savings.

• Instead of paying out cash bonuses, those contributions are set aside and invested for the employee’s future. Over time, they can grow alongside the employee’s own savings, often in combination with a Group RRSP. 

• Because contributions are tied to a company’s performance, a DPSP can create a stronger sense of shared success, while also supporting retention through vesting rules that reward employees for staying with the organization. 

Defined Contribution Pension Plan (DCPP)

• A DCPP offers a more structured approach to retirement savings. Both the employer and employee contribute on a regular basis, typically as a percentage of salary, creating a consistent and predictable way to build savings over time.

• Those contributions are invested. The final retirement income isn’t guaranteed, but the structure helps employees stay on track and build confidence in their long-term plan. 

• When evaluating a DCPP, it’s worth considering contribution levels for both employer and employee, the administrative and governance requirements, and how the plan fits into longer-term workforce planning. 

Making retirement support work harder

There are simple ways to make these programs easier to use and more effective day to day. Automatic enrollment, gradual contribution increases tied to tenure, and thoughtfully designed default investment options can remove friction. They help employees get started, and just as importantly, stay on track.

---

If you’re reviewing your approach, reach out to our team at Prime Benefits Group. We can help you focus on what will make the biggest difference for your team.