While there are many industries in which talent compete for open positions, in other industries, the companies are competing for the talent. While setting up an employee benefits plan is a good start, sometimes our clients are left asking – ‘What’s next? What else can we do to incentivize prospective employees? How else can we reward our team?’
In our last post titled ‘Top 5 Out-of-the-Box Employee Perks’, we presented some unique employee benefits which can help clients stand out when competing for high performers or to fill lucrative positions. However, clever benefits are not our only recommendations. Group retirement savings plans also nicely complement existing employee benefits plans.
Why Are Employee Interested in Group Retirement Savings Plans?
If employees are not already saving for retirement, they are thinking about it. So it’s a very valuable benefit from the employee’s perspective. A group retirement plan offers employees a convenient way to save for retirement through automatic payroll deductions. A certain amount of retirement savings plan contributions is also tax deductible, helping the employee immediately reduce personal income taxes. Since a group retirement plan is consolidated between many employees, the investment management fees are usually much less than if the employee were to set up their own individual plan. More so, supporting resources to better plan for retirement and to manage portfolios are usually available as part of the group retirement savings plan.
What Options Are Available to Employers?
There are three main types of retirement savings options for small to medium size employers: 1) a Defined Contribution Pension plan (DCPP), 2) a Group Registered Retirement Savings Plan (RRSP), and 3) a Deferred Profit Sharing Plan (DPSP). Other types of Registered Retirement Savings Plan (DB), are fairly high in regulatory requirement and capital requirements. Individual Pension Plans (IPPs) are suitable for specific type of individuals in executive and key roles. So for our discussion, we will focus on the first three.
The DCPP and DPSP are more structured and complex in nature, often involving greater regulatory compliance. They are generally suited for larger companies, or those who want more controlled plans and in the case of DPSP, less liability. While we discuss objectives and options with each client independently, most of our clients are interested in Group RRSPs. It is the retirement savings plan that offers the highest level of flexibility for both the employer and the employee, and the ideal option for small to mid-size companies starting a new group retirement savings plans.
What’s Involved in Setting Up a Group Retirement Savings Plan?
At BenefitDeck, we take care of all the details when setting a group RRSP for our clients. We sit down with our clients to discuss objectives, and assist in selecting the right provider. We discuss plan details, such as matching contributions. Commonly, our clients tend match employee contributions anywhere from 1-5%.
Once the plan is established, we host employee orientation meetings on behalf of our clients. We do group meetings introducing employees to the group RRSP plan, and then schedule individual meetings where we use surveys to gauge their comfort level with risk, and their individual retirement objectives. This information then allows us to recommend an investment portfolio which is uniquely tailored to the investor profile of each employee. Savvy investors can also choose to build their own portfolio, and employees can also opt out of the plan if it’s not a priority to them at that point in time.
Throughout implementation, we assist you in setting this up and satisfy ongoing maintenance required for the plan, so it is compliant with the regulatory bodies. Our team is always available to answer questions or provide guidance when needed. Once the plan is up and running, we act as your main point of contact and work on your behalf to liaise with the RRSP provider for all queries.
Helping Your Team Reach Retirement Goals
If you’ve implemented a successful employee benefits plans and have reached the point of ‘What next?’, or if your company is looking for ways to enhance employee perks, a group retirement saving plan might be a good option. Setting up a group RRSP doesn’t have to be complicated. Trust our team at BenefitDeck to guide you and your employees through the setup process, saving you time and undue stress. Our sound advice and hands-on service will streamline the RRSP process and get your team closer to reaching their retirement goals. For more information on our retirement savings plan services, contact our team.
Whether you are with a business, association, or owner operator, we have the solution for your needs.