If Employees Can Save for Retirement on Their Own, Why Should Employers Offer a Workplace Retirement Plan?

It's a fair question.   After all, Canadians can open an RRSP or TFSA at any financial institution. So why should an employer invest in offering a workplace retirement program?

The answer is simple.

Because the evidence shows that, left on their own, many Canadians struggle to save consistently for retirement.  According to the 2025 Benefits Canada Employee Savings Survey, 73% of employees rank day-to-day living expenses among their top financial priorities, while only 42% include retirement savings in their top three financial goals. In addition, 80% say the rising cost of living is making it harder to save for retirement.  

It's not that Canadians don't understand the importance of saving, they simply have competing financial priorities. Mortgage payments, rent, groceries and childcare often take precedence, leaving retirement savings to "next month."

This is where a workplace retirement plan changes the equation.

Why Workplace Retirement Plans Deliver Greater Value

The greatest advantage of a workplace retirement plan isn't simply lower fees or better investments.   It's that the plan makes saving automatic.

Behavioural research consistently shows that people are far more likely to save when contributions happen automatically through payroll rather than relying on monthly decisions. Employees save before they have the opportunity to spend the money, turning good intentions into consistent long-term habits.

Beyond encouraging disciplined saving, workplace retirement plans can provide employees with several advantages that may not be available when investing on their own:

• Automatic payroll deductions make saving simple and consistent, removing the temptation to spend first and save later.

• Employer matching contributions, where offered, provide employees with an immediate boost to their retirement savings.

• Tax-efficient payroll contributions can reduce taxable income immediately through payroll, rather than employees waiting until tax filing season to receive the tax benefit.

• Institutionally priced investments have lower investment management fees than comparable retail products, allowing more of employees' money to remain invested over time.

• Professionally selected investment options, including diversified target date funds, help employees build better diversified portfolios without having to become investment experts.

• Ongoing governance and investment oversight means the investment lineup is regularly reviewed and monitored to help ensure it continues to meet members' needs.

• Education and retirement planning resources help employees make informed financial decisions and improve retirement readiness.

Individually, these features are valuable. Together, they remove barriers and create a workplace savings environment that makes it easier for employees to participate, stay invested and build long-term financial security.  

Why This Matters for Employers

For organizations that already offer a workplace retirement program, the question isn't simply whether you have one. It's whether your plan is delivering the value it should.  Has it been reviewed recently? Are investment fees still competitive? Are employees engaged? Does the plan align with your workforce strategy and support employees' long-term financial wellbeing?

For organizations without a retirement program, the better question may be whether your employees are missing an opportunity to save more effectively.

Today's employees increasingly expect employers to support their financial wellbeing, not only through salary and health benefits, but by making retirement saving easier, more affordable and more accessible. Fortunately, workplace retirement plans are no longer reserved for large corporations. Flexible Group RRSPs, Defined Contribution Pension Plans and Deferred Profit-Sharing Plans can be tailored to organizations of virtually any size and budget.

A Strategic Investment in Your Workforce

A workplace retirement plan is no longer simply an employee benefit.  It is a strategic investment in your people.    

Organizations that help employees build long-term financial security are better positioned to attract and retain talent, strengthen employee engagement, productivity, and to build a more resilient organization. In an increasingly competitive labour market, a well-designed retirement program can be a powerful differentiator.

Whether you're reviewing an existing plan or considering offering one for the first time, the question isn't whether employees can save on their own but rather if you are providing them with tools, structure and support to help them succeed.

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