Deirdre Getty

Deirdre Getty

May 18, 2023


Employee Benefits


Let’s begin with any time an employer helps employees save for retirement, it`s a good thing, no matter the type of plan. Retirement benefits play a crucial role in attracting and retaining talent, and companies recognize the importance of offering suitable options to meet the diverse needs of their workforce. While both Defined Contribution (DC) pension plans and Group Registered Retirement Savings Plans (RRSPs) are valuable retirement savings drivers, the current economic landscape and financial demands on younger workers can make Group RRSPs a more suitable option for younger employees. 

The Importance of Retirement Benefits 

Retirement benefits remain a cornerstone of employee compensation packages, providing long-term financial security and promoting employee well-being. Both DC plans and Group RRSPs enable employees to accumulate funds and create income for their post-employment years. 

Recognizing the Financial Demands on Younger Workers 

Today's younger workforce faces unique financial challenges. They often carry significant student loan debt, struggle with rising living costs, and contend with unpredictable job markets. Given these circumstances, the flexibility and adaptability of Group RRSPs can offer a more suitable solution for younger employees compared to traditional DC pensions.  

Group RRSPs Include Flexibility 

Group RRSPs provide the necessary financial flexibility for younger workers to address immediate financial demands while planning for retirement. These plans allow employees to allocate contributions towards student loan repayment, emergency savings accounts, and other short-term financial goals. The ability to manage changing priorities enhances financial well-being and empowers younger workers to take control of their financial futures. 

The Dual Importance of DC Plans 

While Group RRSPs may be more aligned with the financial needs of younger employees, it is essential to recognize that DC plans remain valuable retirement savings options. They provide a standardized approach to retirement planning and serve as a reliable foundation for future retirement readiness. For employees with fewer immediate financial demands or those who prefer a more traditional retirement savings structure, DC plans are a viable and advantageous choice. 

Balancing Retirement Options 

In a perfect world there would be no need to choose between a DC plan and a Group RRSP. Companies could enhance employee financial wellness by offering a range of retirement options that cater to different employee preferences and financial circumstances. Some companies can and do offer this balanced approach. Most businesses in Canada, however, must choose between the two to ensure inclusivity and provide employees the plan that best aligns with their individual needs. 


Both DC pension plans and Group RRSPs are valuable retirement benefits that contribute to the financial security of employees. While DC plans offer a standardized approach to long-term retirement savings, the current economic environment and financial demands on younger workers make Group RRSPs an attractive option. Group RRSPs provide the flexibility necessary to address immediate financial challenges while planning for retirement, making them well-suited for younger employees. It is important for companies to recognize the unique needs of their workforce and offer a balanced array of retirement options to meet the diverse financial goals of their employees.