Retirement Saving At Work

Sep 14, 2018 | Sam Rook


Group RRSP Plans

                You may recall my recent post about saving for retirement. The conclusion was, in general we are not doing enough of the saving part to be fully prepared in retirement. I stand by those words. The key to any retirement is to do the leg work when you are young and save, save and save.


                What I only brushed past was those people that get access to employer-sponsored Group RRSP or Defined Contribution Pensions. I think it is time to expand upon that because it is an area that can really help you but it is also an area that is full of some really bad offerings for most people.


                A Group RRSP or DC Pension is offered by a company to their employees with the hopes of helping them save money for when they no longer work for the company (aka- they are retired.) It is actually an idea I am fully on board with because it encourages saving by employees which can only be to their benefit, right? Absolutely.


                That’s the end of the blog post.


                Okay, no it’s not. Group plans are wonderful but they have one problem. In almost all cases they offer no individualized planning to help the employee. Having your junior employees click a 4 question survey online does not count as individualized planning. That is the most basic and simplistic option or what I like to call, Fluff Planning. 


                Most companies with more than 5 people will run the gamut from the singleton that lives in a basement apartment to the near-retirement employee with adult kids. I have 2 kids just hitting school age, there is zero chance my “plan” will be the same as my 70 year old coworker who had his first grandchild. How can a 4 questions online survey do anything to help either of us? You know the answer to that; it can’t. You know whom the survey benefits? The plan operator. Those four questions give them enough credibility to say “well you told us this is what you wanted” and to do the bare minimum for you.


                Thus I ask, how can it be done better? How can you, as an HR Manager or Small Business Owner do better for you employees? Disclosure Alert- this is totally a self-promotional sentence. You can help them by having me show up at your office with my Group Advantage team and actually sit with your employees to build a plan. Then we keep following up with them to adjust and fine-tune the plan to meet their needs. Their. Needs. The key point in all of this. The best plan for any group is the one that can meet the needs of all the employees from the Executive level down to the recent graduate just starting their career.


                I am not telling you that we have any special offering that will beat everyone else [No one knows the future]. I am not telling you that the RBC Group Advantage is perfect. It is not because nothing is perfect. I am not telling you the RBC Group Advantage is cheaper because it could be or it could not be but we will be clear on the costs to everyone and it is flexible. What I am telling you is that offering a savings plan to your employees that does nothing to help them with their real goals is doing half the job. Some of your employees may be fantastic planners and understand how to save and invest but the vast majority will need serious professional help and need it often. That is why you need me, or more correctly, your employees need me.


                If you are an employee and you look at your quarterly employer RRSP or DC Pension statement, do you go cross-eyed trying to figure out what you have? If so, contact me.


                If you are an employer and you want to do better for your employees and start a new plan or change to a plan with real planning, contact me.


                If you are happy with 4 generic questions done online and a generic portfolio. Contact me because we definitely need to talk.