How to Get a Better Group Retirement Plan at Work: A 6-Step Guide for Employees
What do you do when your benefits plan is lacking, but you're happy where you are? See where you can encourage your employer to improve their offering — starting with a GRSP!
Wealthsimple Work provides employers with a modern financial wellness benefit for employees.
Workplace benefits can have a significant impact on your financial health.
Your package might include a group retirement savings plan (also called a GRSP), but it may not feel like a benefit right now. Excessive fees, underperforming funds, and poor asset allocation all have the potential to eat up your returns and put a dent in your retirement savings. And we’re not talking about a tiny parking lot door ding.
So, what can you do if you’re not happy with your employer’s group retirement plan?
Concerns about retirement are important enough to make some employees question staying with their companies altogether. A 2021 survey for the Healthcare of Ontario Pension Plan asked over 2,000 Canadians about their financial worries and if they feel prepared for retirement. The results showed 65% of respondents think saving for retirement is prohibitively expensive. This is one major reason why having a solid savings plan matters.
But what if you’re otherwise happy in your job and with your current company? Will you need to part ways to get a better retirement savings plan?
Not necessarily. Hit pause on drafting that resignation email and let’s walk through seven steps you can take to lobby your employer for a new retirement plan.
6 steps to get your employer on board with a new group retirement savings plan
Preparing for future financial security is a real worry. However, you may not have to leave your company to improve your situation. Instead, why not try to influence your employer to sign up with a new retirement plan provider?
If there’s a solid argument to be made for improving what your company is offering employees, you might have a more receptive audience than you’d think.
Companies want to retain the talent they have (and avoid being impacted by the Great Resignation) and many HR/people teams are on the hunt for how to do just that. But a plan that isn’t working can make employees unhappy, financially stressed, and cost people money — including your HR and leadership teams, who are also likely enrolled.
Here are six steps to help you get things moving toward a brighter financial future without having to walk away from your job to do it.
1. Gather information on your current plan
It’s time to get the dirt on your current plan — information that objectively shows where the plan is lacking. It won’t be enough to say you have a bad feeling about your retirement (even if you do) or that you’re pretty sure the fees are too high (even if they’re in skyscraper territory).
Dig into the facts, look at real numbers and experiences, and pinpoint where your current group retirement savings plan falls short. This will help you identify whether the shortcomings exist because of the plan provider or your employer (also known as the sponsor).
Where could the provider be falling short?
The platform could be problematic for employees to access or use independently. You shouldn’t have to be a tech whiz to figure it out.
Employees may not be able to make changes to contributions or their portfolio themselves, requiring coordination with your employer to get things done.
Fees could be too high and eating into potential investment returns (if you can show your work here and compare numbers, you’ll get full marks on this question).
Asset allocation could be off or not customized enough to each employee’s situation. For example, someone with many years until retirement can afford to be a bit riskier with their investment choices than someone who is just a few years away from needing to access their funds).
What shortcomings might lie with your employer?
Your employer may offer low matching contributions (or none at all), rather than higher contributions to help employees reach their financial goals faster.
Limited fund selection may hamper employees who want the freedom to make their own choices about how their money is invested.
A lack of communication could be causing frustration among those who try to use the plan.
Employees may not know or understand how the plan works, resulting in low enrollment numbers.
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2. Learn about alternative plans
Now you’re ready to do some research on other group retirement savings plan providers to see what’s out there that might be better. Sometimes things stay the same in the workplace because nobody has dug into alternatives.
If you want to see change happen, you’ll need to look into what options are available and see how the programs differ. It would also be helpful to find reviews from current enrollees of other plans, which might give you more honest feedback.
Research different providers and the types of available plans, and make a note of options that sound like they would fill gaps in your current plan. You’ll still want a high-quality experience overall, but looking for the pieces you’re missing is a good starting point to find a worthwhile replacement. If you can offer your company information on what group retirement savings plans cost employers, even better.
3. Research what other companies in your industry offer
This data is worthwhile intel though, so fill your coffee and get elbow-deep in it. Gather specifics on what other companies in your industry are offering by way of group retirement savings plans, so your employer can see how they measure up in your market.
Many companies design their benefits packages to be competitive in the industry and want to be known for how well they treat their staff. Your management team likely wants to use their retirement plan to help attract and retain employees, too.
If there’s a gap between your company’s values or leadership goals and what’s being offered to employees, tactfully shedding light on this may help shake your employer out of complacency and get things moving.
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4. Compile your review and recommendations
Data will back up your argument best, so be sure to provide specifics from your research. Then, write up your recommendations to present your findings clearly and concisely.
Remember to frame what you’ve learned from the perspective of your employer. They may not be moved to action just because you want a new group retirement savings plan, but they could be swayed when you point out how it affects the workplace. The 2021 Survey by the Canadian Payroll Association reveals that when employees are financially stressed, they’re distracted and less productive at work. They’re also more likely to leave their jobs.
The numbers aren’t insignificant either. For example, 30% of respondents in the survey felt financial stress and indicated it made them less motivated at work, and a striking 16% said it motivated them to find new employment.
Suddenly, your employer can see what they have to lose by keeping a group retirement plan that isn’t a good fit and how much they could gain by working with employees on a better solution.
5. Choose the best point of contact
Identify who is likely the best person to connect with in your organization. Most companies have specific lines of communication that are considered appropriate for human resource concerns. Respecting established pathways might help you gain ground faster, as you’ll seem more like a partner in finding a solution to a shared problem rather than someone stoking fires of discontent.
In some companies, your best point of contact could be your manager, or an HR or finance contact. Your organization may also offer an employee suggestion program or official means to collect feedback.
6. Share your idea with your chosen contact
Consider how best to share your idea for a new group retirement savings plan and what approach might get you the most traction. Go in with the attitude of making things better for everyone on the team. Your chances of success increase when you can show your employer how they’ll benefit from all the positive aspects a solid program can bring to an organization.
Have all of your research readily available for review and discussion, and be prepared to share and follow up with emailed documents. Book a convenient time to chat — this isn’t a conversation they’ll want to have in the staff kitchen as they heat up last night’s minestrone.
3 Ways to combat objections over switching plans
It’s possible that your employer will downplay your concerns at first, especially if this is the first time they’ve heard of any discontent with their current group retirement plan. (The adage stands — if something isn’t broken, why are you even fiddling with it?)
Here are a few things you could suggest to push back against any resistance you discover.
Employee survey. Suggest that your employer circulate a company-wide survey to see if other staff are experiencing similar issues. Once they hear numerous team members sharing worries and dissatisfaction, they may realize they have a problem that needs addressing.
Plan audit. It might be possible to suggest a plan audit to get unbiased feedback on your company’s current program. Your employer may simply need to see numbers or facts presented by someone outside of the organization to take it seriously enough to change things.
Be a champion. If you want to throw yourself into making change happen, offer to champion the new program with a core group of staff (here’s looking at you, internal communications team). Consider this approach like offering to be a cheerleader who can help smooth the transition to a new group retirement plan. Your employer might be more likely to agree to something new if they know they’ll have someone on the ground ready to boost it with the team.
Worrying about finances can affect your work performance. If those worries are caused in part by aspects of your employment, it’s hard to stay motivated.
However, if you can bring about positive change within your company, there could be a big boost in financial security for staff, and to employee productivity and retention for your employer. Plus, there could even be financial benefits for you if you refer your company to a new provider. For example, Wealthsimple offers a referral bonus that could make it worth your while.
Ready to dig in? At Wealthsimple, we’ve got resources and full transparency on how our group retirement plans work to help you prep for the discussions ahead.
Courtney is the Director of Sales at Wealthsimple Work. She and her team are on a mission to help all Canadians achieve financial freedom by enabling employers to provide innovative, simple, and low-fee group retirement programs.
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