What Are Retirement Benefits and Why Should Your Company Offer Them?

What Are Retirement Benefits and Why Should Your Company Offer Them?

A pension is a dedicated fund that provides income after retirement. The Canada Pension Plan is a cornerstone of retirement income for Canadian citizens, much like Social Security in the U.S. But does the CPP (QPP in Quebec) provide enough income to enable recipients to maintain the same standard of living after retiring?  

In addition to the CPP, employer-sponsored pension plans provide added financial security for employees and their families. However, outside Quebec, there is currently no legislation in Canada mandating an employer-sponsored retirement plan for employees.  

So what are retirement benefits for employees, and why should your company offer them?  Read on as our team at Group Enroll explains this type of pension and how employer-sponsored retirement packages would benefit your company. 

Table of Contents

What Is an Employer-Sponsored Pension, and How Does It Work?

Employer-sponsored plans deduct fund contributions from the employee’s salary, and many companies match the employee’s contributions. Some flexible plans allow participants to withdraw funds before the normal retirement age.  

A few different types of pension plans exist, and each one works with specific metrics—such as age, salary, and work experience—to determine how much remuneration a retiree receives, and when.  

The most popular employer-sponsored retirement plans fall into three categories as follows.

DBPP: Defined Benefit Pension Plan

DCPP: Defined Contribution Pension Plan

RRSP: Group Registered Retirement Savings Plan

PRPP: Pooled Registered Pension Plan

TFSA: Tax-Free Savings Account

Voluntary Retirement Savings Plan (Quebec only)

Employer-Sponsored Pension Eligibility

Retirement pensions have different criteria for eligibility depending on the type of plan. For example, to be eligible for a defined benefit pension plan, the employee must have worked for the company for a set period that qualifies them to receive benefits. Defined contribution plans require participants to collect the pension before age 71, and the income is subject to tax.  

All Canadian residents under the age of 71 are eligible for an RRSP if they have an income from which they can contribute to the plan.  

It is also possible to be eligible for multiple pensions from several employers if an employee changed jobs or companies over the years. Since the income from retirement pensions correlates to job earnings, the amount may vary based on the type of employment and years of service.

Employer-Sponsored Pensions Are Good for Business

Here are a couple of reasons why employer-sponsored pensions benefit a business:

They Ensure Job Satisfaction and Employee Retention

Reduced Financial Stress Fosters More Productivity

Creating a Culture of Retirement Security in the Workplace

Employers can help employees create financial security and remain steadfast to their bottom line. Here are some considerations moving forward: 

Work Toward Increasing Value for Money

Prioritize the Retirement Plan Within the Employee Benefits Package

Customize Your Plan to the Needs of Your Workforce


Contact Group Enroll for Assistance

At Group Enroll, we provide quotes to users from multiple providers. Contact us by completing the online quote form. After verifying your needs, our team at Group Enroll will request a quote and proposals from 5-10 insurance providers and then send you the best one.