Savings and retirement | Rethinking group plans

The current economic uncertainty is changing Canadians' relationship with savings. For more than half of the population, this creates concerns about their ability to save enough money for retirement.¹   

The reason is that saving money for long-term goals competes with more immediate priorities, such as housing and food. The rising cost of living is eroding Canadian households’ optimism about their financial health.²

When it comes to finances, people often feel overwhelmed by the complexity of choices and the abundance of information. Furthermore, uncertainties and people’s needs often change as they grow older.

When these needs and uncertainties are incorporated into the design of group retirement savings plans, it can transform these plans into truly strategic HR tools.

Flexibility becomes essential

A growing number of workers in Canada want the flexibility to spread their contributions across multiple savings options—RRSPs, TFSAs, and, more recently, group FHSAs—while still receiving their employer’s matching contribution. For instance, an employee might contribute 3% to their group RRSP and 2% to their group FHSA.

This mirrors the savings behaviours commonly found across the country. According to Statistics Canada, 11.3 million people contributed to an RRSP, a TFSA or both in 2023:³

• 5.0 million contributed to a TFSA
• 3.8 million contributed to an RRSP
• 2.5 million contributed to both plans 

The fact that people are combining these options shows that they value flexibility. Moreover, contribution rates tend to rise when group plans offer a range of savings vehicles,⁴ as opposed to plans built around only one choice.

The plan member life cycle

Flexibility must also reflect the fact that savings habits will vary depending on stage of life: 

• People at the start of their careers want to balance long‑term savings with immediate goals such as buying a first home. A group plan built solely around the RRSP, for instance, is not well aligned with this reality, whereas a flexible mix (RRSP, TFSA, FHSA) will match people’s needs more closely.
• For people in mid‑career, flexible plans can make it easier to manage financial pressures and meet a range of other needs: including both an RRSP (for tax efficiency) and a TFSA (for liquidity and emergencies) within a flexible group plan will address actual needs.
• As people near retirement, their focus shifts toward having a more predictable income and coordinating that income with government plans. Flexibility lets people adjust the RRSP portion when appropriate, use the TFSA as a source of non‑taxable income and tailor their strategy to include other income sources (CPP/QPP, OAS, etc.).

Know your workforce

Sponsors who want to offer more flexible plans must also pinpoint their plan members’ needs more precisely. When employees are categorized by age, needs, financial constraints and saving habits, it becomes easier to see where the group plan can be optimized so that it meets people’s real needs. 

Drawing up a list of needs helps to:

• Close the gap between plan features and employee expectations
• Identify areas where support and education are needed
• Highlight key moments when action can have a real impact

Mapping out plan members’ needs and expectations will reveal the financial priorities specific to each age group and serve as a guide for any adjustments to the plan.

Guidance: from potential to performance

At a time when financial information is plentiful but not always well understood, personalized support becomes a key factor in boosting performance and improving financial wellbeing.

Professional advice helps give structure to people’s decisions and reduces financial anxiety.⁵ As a result, people who have a formal plan and receive regular guidance generally report feeling more in control of their finances, less stressed and more confident in their ability to retire when they want to.⁶

Whether it takes the form of simple tools, targeted communications or personalized support, guidance then becomes a powerful driver of action. But guidance must be appropriate for each stage of life to be effective.

This means that the role of the plan sponsor is not just about providing tools. It’s also about encouraging the use of tools by increasing points of contact, reinforcing key messages and ensuring that the support is easy and accessible.

A winning solution for everyone

Offering flexible plans along with personalized guidance and an in‑depth knowledge of plan member profiles supports a financial wellness strategy without undue complexity or higher setup costs for the plans.

This approach helps to:

• Increase enrolment and satisfaction with the plan
• Reduce pain points stemming from unmet needs
• Strengthen the overall plan offering

Take this opportunity to transform your group plan into a genuine driver of financial wellbeing that will benefit both people and organizational performance.

¹ Healthcare of Ontario Pension Plan: 2025 Canadian Retirement Survey

² Bank of Canada: Canadian Survey of Consumer Expectations—First Quarter of 2025

³ Statistics Canada: The Daily—RRSP, TFSA and FHSA Contributions, 2023

⁴ Morningstar: Analyzing the Value of Managed Accounts

⁵ iA Financial Group: Financial advice: a key pillar of total wellbeing

⁶ FP Canada™: 2025 Financial Stress Index