Why Employers Should Offer a Retirement Plan

Employers should offer their employees a retirement program for several reasons. The reasons are, to create a competitive advantage for your organization by being one of the few that offer such a benefit, retirement programs attract and retain talent, they increase organizational commitment, and provide relief at tax time for the company.

According to Monster.ca, less than 40% of employed Canadians have a pension plan at work, which means if you as an organization are in that 40%, you have the competitive advantage when it comes to attracting talent.

A retirement program will help attract and retain valuable employees. Retirement programs are an extrinsic reward that add value to the compensation package. Prospective employees appreciate that the organization is taking on the responsibility of managing and funding

the program. Further, this positively contributes to retention because the employee who is contributing to that retirement program and will need to continue to work there in order to fully benefit from the program, these aspects will lead to organizational commitment from your employees. This is especially beneficial when attracting and more importantly retaining highly efficient millennials who are known to change careers several times throughout their work life due to poor organizational satisfaction.

Another reason why organizations should be implementing a retirement program, is that as explained in the Morneau Shepell Handbook of Canadian Pension and Benefit Plans, it will reduce your company’s tax burden. The contributions made by the employer to the retirement

program are tax deductible, and therefore a smart way to reduce the organizations taxes at the end of the year.

Overall, in conclusion, there are several reasons why it is beneficial to offer a retirement program to employees, it creates a competitive advantage for your organization, increases employee commitment, attracts good employees, and relieves the tax burden of the organization.