Why Many Small Businesses Don’t Have a Group Retirement Plan

Many small businesses don’t have a group retirement plan, even though the benefits of offering such a plan are obvious. Studies have shown that employee attraction, retention and engagement are increased by a group retirement plan. Many small business owners realize they should put a plan in place, but the have never found the time or an appropriate plan for their employees.

Here are some of the main challenges that explain why many small businesses don’t have a group retirement plan:


Most business owners, general managers or even HR personnel are primarily focused on the day-to-day tasks of running a small business. Often in a small business, one person could be responsible for multiple departments, making it difficult to add another task that may not seem “crucial” to the business operation.

Setting up a group retirement plan is easier than most people think, especially with the many tools available with today’s technology.


This is perhaps the biggest barrier to starting a group retirement plan, the overall cost of the plan. Many providers are offering “group plans,” but the management fees are the same or comparable to an individual contributing to an RRSP at their own bank.

If the right choice is made, a low-cost plan with appropriate investment options can easily be implemented. An experienced advisor like DENT can provide you with several options that will benefit both the business and its employees.


Related to the time challenge mentioned above, administration of the plan can be a daunting task for the inexperienced. Business owners and manager have little time to administrate such a plan. Data entry and employee information changes can eat up valuable time that is better spent elsewhere.

There are group retirement plans available that provide an “autopilot” solution to administration headaches. Small business owners want to spend 20 min or less each pay period on their group retirement plan. With the proper plan set up and online tools available, this can easily be accomplished.

Many small businesses don’t have a group retirement plan due to the perceived cost and time involved with set-up and administration. These are valid concerns, but they should not stop businesses owners from taking advantage of the many benefits a group retirement plan offers to the business and its employees.

We encourage you to contact a DENT retirement benefit expert today to explore the many options available.  

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.

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