Your Workplace Retirement Plan May Be Competitive. But Is It Effective for Your Workforce?

Having a workplace retirement plan is a good thing.  However, having a retirement plan and having a retirement plan that is working effectively for your workforce are not necessarily the same thing.

Your retirement plan may be failing you and your employees quietly.  

A plan that made sense five or ten years ago may no longer be the right fit for your organization today. Your workforce may have changed. Your business may have changed. And what employees need from their retirement program may have changed, too.

The workforce has changed. Has your Plan?

Organizations evolve.  You may have grown, acquired another business, hired younger employees, added highly compensated talent, or seen experienced employees stay in the workforce longer.  

At the same time, employees are balancing retirement savings with immediate financial priorities.  The 2026 Benefits Canada Employee Savings Survey found that day-to-day expenses remain the top financial priority for plan members, while the proportion ranking retirement savings among their top priorities increased from 42% in 2025 to 47% in 2026.  That matters because employees don’t experience your retirement plan in isolation. It competes for their attention and resources alongside mortgages, rent, debt, emergency savings and other financial priorities.

The right retirement plan needs to be relevant and work within the financial realities of the people it serves – your people.

Redefining Retirement Plan Success

For decades, workplace retirement plans have largely focused on helping employees accumulate savings, often overlooking an equally important goal of helping them convert those savings into a sustainable retirement income.  

A member with a substantial account balance may still have little understanding of whether they are on track to retire, when they can afford to retire, or how their accumulated savings could translate into sustainable retirement income.

Retirement readiness requires a broader perspective.  Employees need to consider their workplace savings alongside government retirement income, other personal assets, retirement timing, spending needs and the risk of outliving their savings.

This is why the conversation around retirement plans is increasingly moving beyond helping employees save and towards helping them make better decisions about their retirement future.  This is further marked by increased pension regulations, new products and services to further support this shift in focus.  

Why should Plan sponsors care?

Retirement readiness is often viewed as an employee issue. In reality, it is increasingly becoming a workforce issue.  

Employees who are not financially prepared for retirement may remain in the workforce longer than anticipated, which can affect succession planning, workforce planning and the ability to create opportunities for the next generation of employees. Conversely, employees who feel confident about their financial future are often more focused, engaged, and better positioned to transition when the time is right.

For employers, this makes the retirement program more than another item on the benefits list.  It represents a significant investment by both the organization and its employees.

The question is whether that investment is producing the outcomes you want.

Look at your plan through the eyes of your employees

When was the last time you looked at your retirement plan from the perspective of the people it is intended to serve?

Not just the investment performance. Not just the fees.  Not just participation.

Consider asking:

• Does our plan still reflect the needs and demographics of our workforce?

• Are employees participating and contributing at levels that support their retirement objectives?

• Do employees have a reasonable understanding of whether they are on track?

• Are our communications helping employees take action, rather than simply providing information?

• Are we helping employees think about the transition from accumulating savings to generating retirement income?

• Are we measuring outcomes, or primarily measuring activity?

If some of these questions are difficult to answer, that may be the most important finding of all.  Because a retirement plan does not become effective simply because it exists.  It becomes effective when it helps employees make better decisions and move closer to retirement readiness, while supporting the organization's broader workforce objectives.

That is worth reviewing.

What can employers actually do?

The good news is that improving retirement outcomes does not necessarily mean redesigning the entire plan or increasing employer costs. Sometimes the opportunity is much more targeted.

• A closer look at plan design.

• Better use of behavioural features.

• More relevant communication.

• Better retirement readiness data.

• A clearer focus on employees approaching retirement.

The starting point is understanding where your plan is today and where the greatest opportunities may exist.

In Part 2, we look at three practical ways employers can evaluate their retirement program and make targeted improvements that can help employees make better decisions and improve retirement readiness.  Click here to read Part 2.

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