Want to attract and retain top talent? Offering the right mix of group savings accounts can make all the difference. Read on to learn how to build a plan your employees will love.
What keeps your employees up at night? For some, it's saving for a down payment on a house. For others, it's their retirement portfolio. For the true insomniacs, it could be both. You can help your employees reclaim their beauty sleep.
What are group savings plans, anyway?
A group savings plan is an employer-sponsored program that helps employees save through automatic deductions from their pay cheques into special investment accounts. Many employers also offer contribution matching as an added benefit of employment.
There are different types of accounts you can offer, which serve distinct purposes. Some are focused on retirement savings, while others offer more flexibility for things like buying a first home or building an emergency fund. The value comes from combining them in ways that support your employees' many financial goals.
What should shape your group savings strategy?
Choosing the right mix of savings plans isn't a decision you want to make without proper planning. First, let's look at the key factors that should shape your strategy.
How do employee demographics affect the plan?
To pick the right plan, you can look at:
Age distribution across your organization
Dispersion of income levels
Life stages and financial priorities
Geographic location and cost-of-living realities
How much should your company budget for matching?
Assess your financial resources:
What level of matching contributions can you sustainably offer?
How might your budget evolve as your company grows?
What's the right balance between retirement and other savings incentives?
It's better to start conservative and scale up than to overpromise and have to claw back.
How complex is it to administer?
You need to make sure your plan works for you. Take inventory of the following things:
Current payroll and HR team capacity
Your HR tech stack and available integrations
Employee education and support resources
Reporting and compliance requirements
When working with a partner (like us!), you should determine how well they can match your needs. Can they plug into your current HR systems? How much educational material do they provide? What do management fees look like?
What are the tax implications — for you and your employees?
Not even your accounting team likes talking about taxes, but they need to be in the conversation for both your organization and your employees.
For your organization:
Tax treatment of employer contributions
Payroll tax considerations
Compliance and reporting obligations
For your employees:
Tax advantages at different income levels
Immediate versus deferred tax benefits
Impact on government benefits
Which account types should you offer?
To keep things straightforward, we're going to focus on the four most common types of group savings accounts. If competition for talent is really stiff, there are even more options you may want to consider, including the Deferred Profit Sharing Plan (DPSP).
Account | Tax treatment | Contribution limit | Best for |
|---|---|---|---|
| Group RRSP | Tax-deferred; contributions cut taxable income now | Annual RRSP limit set by the CRA (income-based, room carries forward) | Retirement saving; the usual plan foundation |
| Group FHSA | RRSP-style deduction and TFSA-style tax-free withdrawals | Set annual and lifetime limits (CRA); must be closed within 15 years, or by the year the holder turns 71 | First-home savers |
| Group TFSA | Tax-free growth and withdrawals | Annual TFSA limit set by the CRA; withdrawn room restored the next year | Flexible, emergency, or supplemental savings |
| Group Non-Registered | No special tax treatment | No limit | High earners who've maxed registered options |
Group RRSP
The foundation of many corporate savings programs, Group Registered Retirement Savings Plans (GRRSPs) offer tax-deferred retirement savings with the convenience of automatic payroll deductions.
Key benefits for you:
Powerful tool for attracting and retaining talent
Tax-deductible matching contributions
Simpler to administer than traditional pension plans
Helps employees build long-term financial security
Employee advantages:
Immediate tax relief through payroll deductions
Potential employer matching
Lower management fees than individual RRSPs (in most cases)
Tax-deferred investment growth
Implementation considerations:
Decide on matching contribution levels (we see average matching between 3% and 5%)
Choose between restricted and unrestricted withdrawal options
Plan for regular employee education and engagement
Consider vesting periods for employer contributions. Vesting means employees earn full ownership over time rather than right away. A Group RRSP can't do this on its own, so if you want it, pair the Group RRSP with a Deferred Profit Sharing Plan (DPSP) — it's built to do exactly that.
Group FHSA
Introduced in 2023, a First Home Savings Account (FHSA) combines RRSP-like tax deductions with Tax-Free Savings Account (TFSA)-style tax-free withdrawals for first-time home purchases, with set annual and lifetime contribution limits.
Key benefits for you:
Attracts younger employees focused on homeownership
Demonstrates support for major life goals
Complements existing retirement savings options
Positions your organization as forward-thinking
Employee advantages:
Tax-deductible contributions up to the annual FHSA limit set by the CRA
Tax-free withdrawals for first home purchases
Flexibility to transfer unused funds to an RRSP
Combined benefits of RRSP and TFSA features
Implementation considerations:
Best offered alongside other savings options
Clear communication about eligibility requirements
Education about the account’s time limit — it must be closed by the end of the 15th year after opening, the year the holder turns 71, or the year after their first qualifying withdrawal, whichever comes first
Strategy for employees who already own homes
Group TFSA
Group TFSAs are a flexible option for short- or long-term savings goals, with unused contribution room carried forward each year. They offer accessible, tax-free savings for major life expenses, emergencies, or supplemental retirement income.
Key benefits for you:
Appeals to employees across all income levels
Complements retirement-focused options
Simple administration and setup
Supports diverse financial wellness goals
Employee advantages:
Tax-free investment growth and withdrawals
Flexible access to funds when needed
No impact on government benefits
Contribution room restored after withdrawals
Implementation considerations:
Determine whether to offer employer contributions
Plan for educational support about optimal usage
Consider integration with other savings options
Develop a strategy for encouraging consistent contributions
Group Non-Registered Account
A Group Non-Registered Account provides additional savings capacity beyond registered plans, with no contribution limits but no special tax treatment.
Key benefits for you:
Simple administration
Attractive to high-income employees
Complements tax-advantaged options
Employee advantages:
Unlimited contribution potential
Complete flexibility for withdrawals
Access to the same investment options
No age restrictions
Implementation considerations:
Usually best as a supplemental option
Clear communication about tax implications
Integration with other group plans
Focus on high-income employee needs
How to build an optimal plan for your team
Now that you understand the different group savings accounts, it's time to build your plan.
Based on our experience designing financial benefits programs for thousands of companies, here's how to build one effectively:
Know what your organization needs. Before implementing any plans, lean on real data.
Survey your team to understand their financial goals and preferences.
Research what similar organizations in your industry and region offer.
Determine what you can reasonably afford, both now and in the future.
Design your plan structure. Most successful companies start with a Group RRSP (with employer matching) as their foundation, then add complementary options like TFSAs or FHSAs. If this seems like too much to do all at once, consider a staged rollout of your full program. For example:
Year 1: Group RRSP with 3% matching
Year 2: add a Group TFSA option
Year 3: introduce an FHSA and potentially increase RRSP matching
Determine how much you can afford to offer employees, and which option you want to use. Wondering what contribution level to set? Wealthsimple for Business employers we work with, that offer matching, are offering between 4% and 5% on average, with the median being 4%.
Create a communication strategy. To make your plan effective, you have to prioritize education. Make sure new and current employees alike know about, and enroll in, your plan. Make it a touchpoint within onboarding, and regularly reach out to employees who aren't enrolled. If you notice certain employees keep saying they're going to enroll but don't, focus on education. Even simple guidelines can empower employees, driving enrollment by helping them choose the right account. For example, you could share the following direction for employees based on their savings goals:
No specific savings goals: go with the account with employer matching
Aspiring homebuyers: prioritize the FHSA
Building emergency funds: focus on the TFSA
Within peak earning years: maximize RRSP contributions
Optimize administration. Time can often be the biggest barrier to creating good financial benefits programs — administrators' time, specifically. You can address this by:
Choosing providers with integrated platform solutions
Streamlining enrollment and contribution processes
Leveraging technology for employee self-service
Setting up automatic monitoring for participation and satisfaction metrics