Small business owner’s account for 45% of Canada’s GDP and continue to be a leading source of economic growth in this country. Despite the massive impact they have in their communities and national economy, many small businesses are without an employer-sponsored group retirement package.
Canada’s economy depends on small businesses as they are a major source of employment. However, many employees may not have the ability to build a retirement nest egg at their current job. Which is why many top employees choose to work for a large company or for a government agency to ensure they have the means to retire comfortably. So what is stopping small business owners from offering a group retirement package? There are several common “barriers” that we would like to discuss in this article.
Myth #1: Cost
This barrier is number one for a reason, everything comes down to cost for most business owners. However, it is not as expensive as you may have been lead to believe. There are many affordable programs available to you, and depending on the type of program the cost could be as low as zero. Consider also the availability of wholesale pricing through the Western Canadian Buying Group, offering products such as Pooled Registered Pension Plans (PRPP). Programs like this relieve the cost burden on the owner of the business while providing attractive retirement saving options for their employees.
Myth #2: Administrative nightmare
A common myth in the industry is that a group retirement package may be attractive to employees, but extremely complex to implement. In today’s group pension plan environment, this is simply not the case. A competent advisor will take you step-by-step through the process, and really your only responsibility is signing up the payroll deductions. The most difficult part is deciding what type of plan you would like to implement, this again is the responsibility of your advisor to make sure all your needs are addressed.
Myth #3: Government compliance
There is a common belief that there is too much government involvement in group pension plans, the complexity of remaining compliant may be a major barrier for some business owners. The truth is your provider carrier much of the burden in terms of compliance and making sure the plan meets government requirements. All group retirement packages have fully managed investment platforms that are put through stringent securities compliance tests before they can be offered to any business owner.
If you are concerned about the complexities or cost of implementing a comprehensive group retirement package in your business, we strongly recommend you contact one of the group retirement experts at DENT Benefits for more information.
The information in this material is derived from various sources. Material is provided for general information and is subject to change without notice. Every effort has been made to compile this material from reliable sources; however, no warranty can be made as to its accuracy or completeness. Before acting on any of the above, please contact us for benefit, pension and insurance advice based on your corporate or personal circumstances.