Now is better than ever for small business clients to think about the benefits of starting a group retirement and savings plan. That’s because setting up and running a plan is much less complicated than it use to be and many providers are adding support for the small business market — including advisors. Plus, offering a plan may be the best investment a small business owner can make in the future for his or her business.
Business owners know their employees are a valuable asset. The best and the brightest potential employees look for an attractive compensation package that includes a group retirement plan. There are three main ways that a group retirement plan can help employers connect with talented people. Those are:
- Attraction: Quality people look for jobs that offer an attractive compensation package that includes a group retirement and savings plan.
- Retention: Employees are less likely to leave for an employer who offers a group retirement plan.
- Creating goodwill: Employees will appreciate the commitment to helping them save for retirement.
Many small business owners might think a group retirement plan is for large companies with extensive resources; however, this isn’t the case with the simplified group retirement products that has been introduced to the marketplace recently. These products make it easier and more affordable for smaller employers to offer their employees a simple and convenient way to save for retirement.
Specifically, a simplified group retirement plan has:
- Easier administration and recordkeeping so your clients can focus on their business.
- Flexibility to suit the needs of your client’s budget.
- A choice of plan types, investments and other plan options.
Important short and long-term benefits a group plan can offer their businesses:
- Instead of pay increases, a group plan can minimize a business owner’s payroll expenses.
- Employer contributions to a plan are a deductible business expense.
- Group plans can help a business owner plan for their own retirement.
For employees, a group retirement plan is an easy and convenient way to save. A big plus is that investment management fees for a group plan are typically lower than fees for retail options. Members of a group plan also have the flexibility to manage their savings in the way that suits them and have access to support and a variety of educational tools to help them achieve their retirement goals.
Why Business Owners Should Consider a Plan:
- 89% of Canadians say workplace-based group retirement plans should be available to all working Canadians. Of those not in plans, 56% are interested in joining one, and 41% would consider changing jobs for an employer that offered one.*
- It only takes two employees to start a group retirement plan.
- Simplified plans are affordable and flexible for a small business owner’s budget.
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Written By: Kimberly Shewchuk