Why Group Retirement Plans Are a Must-Have Benefit for Small Businesses

Health and dental benefits have long been important offerings in any employee package. They support everyday wellness, reduce out-of-pocket expenses, and show your team that their health and quality of life matter.

In 2025, many employees are also looking ahead, with financial security, long-term goals and retirement readiness all top of mind.

That’s why group retirement plans are quickly becoming the next must-have benefit, especially for Canadian small-and mid-sized businesses. They round out your offering and send the message that you’re invested in your employees’ present and their future.

According to data from Statistics Canada’s Income, Pensions, Spending and Wealth report, employer-sponsored retirement plans help reduce financial inequality and improve wealth outcomes across the country. In fact, Canadians with access to a workplace retirement plan are significantly more likely to retire with enough savings.

Employees Feel the Financial Squeeze

Rising costs are hitting everyone, from Gen Z to baby boomers. About 45 per cent of Canadians say inflation is making it hard to cover daily expenses. Mortgage rates, food prices and rent have gone up.

Even those close to retirement are feeling the pinch. The average mortgage debt for Canadian homeowners aged 55 to 64 is now $329,825, which is up from $250,521 in 2019 and $95,424 in 2005.

Group retirement plans offer a practical way to save consistently, without relying solely on government programs like CPP or OAS.

What Retirement Plans Are Available to Canadian Small Businesses?

There are flexible options that fit even small teams and lean budgets.

• Group RRSPs are easy to set up. Employer contributions are optional (but encouraged), and they offer tax-deferred growth.
  
• Defined Contribution (DC) Pension Plans are structured and regulated. Contributions are shared between employers and employees, and they can offer predictable income in retirement.
  
• Deferred Profit-Sharing Plans (DPSPs) are funded entirely by the employer. Contributions are based on company profits, and these can help tie employee success to business performance.

Even if you start small, such as with a two to three per cent employer match, it can significantly improve employee retention and morale.

5 Steps to Launch a Group Retirement Plan

1. Survey your team. Find out what they care about. Would they prefer a simple RRSP or a more structured pension? What kind of retirement education would help?
   
2. Estimate the cost. Use a retirement plan provider to model different contribution scenarios. You might be surprised how affordable a solid plan can be.
   
3. Choose a simple option. Most small businesses start with a Group RRSP because it’s easy to manage. You can always modify the offering over time.
   
4. Communicate early and often. Use explainers in plain language, or even short lunch-and-learns. The earlier your employees start saving, the better.
   
5. Bundle it with other benefits. Group retirement plans are even more impactful when part of a full package, along with health and dental coverage.

We’re Here to Help

Group retirement plans can be a smart, affordable way for businesses to show they care and stay competitive.

At Prime Benefits Group, we help employers put together retirement plans that work.

Contact us today to learn how simple it can be to support your employees’ futures.

Suggested Reading

Why Saving for Retirement is Tougher Today Than Ever Before

How to Manage Retirement Plans During Times of Economic Uncertainty