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Group savings programs 5 min read

Employee group savings programs can be a key strategic tool in recruitment and retention

It can be hard to find – let alone keep – good people. A group savings program shows you’re not just committed to seeing your business thrive, you’re also dedicated to growing your employees’ financial wealth and knowledge.

People are the heart of any business, so it’s no surprise that attracting and retaining them is generally top of mind for business owners – particularly when labour shortages are front and centre. 

That’s why it’s important to have strong tools to build a work environment that draws employees in and encourages them to stay. And while your mind might first turn to wages and special perks to entice talented people through your door, recent studies show that employer sponsored savings programs are a high priority for employees. In fact, over two-thirds of employees in a recent study indicated they’d be reluctant to leave their workplace if one was offered.

CWB Wealth’s Hilmar Lemke has over 30 years' experience in financial services, many of them spent advising businesses about group savings programs. He says he’s noticed an increasing interest in group savings plans as business owners navigate the challenges of a tight labour market. 


“Anytime we hear a client or prospect say they’ve lost another person, or they can’t seem to fill this hole in their business, that’s where our group savings program comes in. We’re able to say, you know what, we’ve got something that can really help you with that.” 

A savings program for any size or type of business

“I work with businesses across the CWB Banking Centres from Vancouver Island to the GTA, and it doesn’t matter where the business is located or how big it is – they all struggle with attracting and retaining employees.” says Lemke.

But whereas other providers may be limited to a certain size of client base, Lemke and his team are able to work with all different types and sizes of businesses. He says he’s seen the CWB offering succeed in a variety of sectors.

“Everything from accounting and law firms, to trucking companies, to construction companies, to environmental engineering companies. It’s all over the map, but the common denominator is that we’ve been able to help them all,” he says, adding his clients not only include businesses that are new to the idea of a group savings program, but also those who want to transition from their current provider.

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A matching component is essential – and it reduces HR costs in the long run

While Lemke says a group savings program is a good idea for most businesses, he emphasizes you need to put your money where your mouth is.

“Without a matching component the uptick is going to be very low. Businesses should be aware that employees need to see you have skin in the game – that you’re offering them something that makes them either want to come work for you, or want to continue working for you,” he says. “As for a cost-benefit analysis, I’ve had business owners tell me the cost of losing an employee is far greater than contributing payroll to an employee’s RRSP.”


Tax benefits let your employees’ keep more of their money

When it comes to RRSPs, every contribution lowers your taxable income. They also provide tax-shelter to your investment earnings, so you only pay tax when you’re ready to withdraw.

And there’s an added benefit if you’re participating in an employer-sponsored RRSP program, explains Lemke.

“When you contribute to an RRSP as an individual, you don’t really get the tax benefit until you file your taxes,” he says. “But with a group RRSP, you may have a $100 contribution coming off your gross pay, however your net pay may only go down by $70 – so you get that $30 immediate tax benefit right away.”


Financial education for employees

Giving your employees opportunities to invest and grow their money is one thing you can do to show you care about your employees’ financial future  empowering them to make sense of their finances is another. That’s where the online educational component of CWB’s group savings program really stands out, says Lemke.

“I hear from business owners that they’re concerned about their employees’ financial literacy. In the financial services industry, we sometimes take for granted that everyone knows what an RRSP is and why they should invest. I mean sure, it makes a lot of sense to us, but we need to recognize that’s not necessarily the norm,” he says. “That’s why our group savings program offers businesses an online portal of financial education tools and resources as well as a team of financial experts and planners. These experts are dedicated to improving the financial literacy of employees through coaching, planning, and counselling. And I’m not just talking about increasing their knowledge of investments like RRSPs and TFSAs. We get into the basic aspects of financial wellbeing, like smart budgeting, savings, and credit.”


A way to show employees you care

A group RRSP is proof to your current and future employees that you’re invested in their financial future. And with survey data indicating more Canadians are living paycheque to paycheque, long-term employer sponsored savings programs provide a measure of security.

“When businesses have done well, they want to give back to the employees who’ve helped make those accomplishments possible. This is one way to share the wealth, so to speak, and demonstrate you recognize that many hands have been involved in building the business,” says Lemke.


How to get started

What kind of effort does it take to set up a group savings program? Lemke says the biggest thing a business needs to think about is what their matching component will look like – what percentage they’re wiling to match, and how they want to structure it. “While the matching component is tailored to each business’ specific needs and considerations, usually they have an escalating structure,” says Lemke.

He and his team guide clients through these decisions and then work alongside them to implement the program, which includes ensuring employees are comfortable using the online platform.

“We have an easy and intuitive platform to begin with, and we pair that with a team effort that really reflects the CWB way of doing things – that can-do attitude and readiness to support,” he says. “It’s not a case of setting something up and then you never hear from us again. We’re in touch with clients on a regular basis with check-ins to see how it’s going and what they need. Our approach with this program is to give our clients the same kind of CWB experience they get at our banking centres – a personal, responsive team that’s right by their side and eager to help.”


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