Retirement Savings Plans That Support Employee Retention

Build a compensation plan that gives employees more reasons to stay

The Smart Way to Improve Employee Retention

Workplace retirement savings plans give Canadian corporations a practical, tax-efficient way to improve employee retention while supporting long-term financial security. Contributions are made through payroll, helping employees build savings automatically over time.

Employers can enhance the plan by adding profit-sharing contributions, which are tax-deductible and not subject to payroll taxes. Employee contributions grow on a tax-deferred basis, creating meaningful long-term value.

This structure allows businesses to control costs, reward loyalty, and offer a benefit that strengthens over time. Whether used on its own or alongside a benefits plan, it provides predictable budgeting and a clear reason for employees to stay.

How Retirement Savings Plans Help You Retain Employees

1. The Employer Sets the Structure

Your company decides how the plan is designed — including contribution levels, matching structure, and eligibility. This can vary by employee class or tenure, giving you full control over costs and incentives.

2. Employees Contribute Through PayrollEmployees contribute a percentage of their pay directly into a retirement savings plan. Contributions are automatic, making it easy to build savings consistently over time.

3. Employer Contributions Build Long-Term Value

The company can add matching or profit-sharing contributions, which are tax-deductible and not subject to payroll taxes. Funds grow tax-deferred, creating meaningful long-term value for employees while reinforcing retention.

The Tax Benefits of a Deferred Profit Sharing Plan

Deferred profit sharing plans offer a highly tax-efficient way for employers to reward employees while controlling overall compensation costs. Employer contributions are fully tax-deductible and are not subject to payroll taxes such as CPP, making them more efficient than salary increases or bonuses.

For employees, contributions are not taxed when made and grow on a tax-deferred basis until withdrawn, typically in retirement. This allows the value of the benefit to compound over time, making it more meaningful than immediate cash compensation.

Deferred profit sharing plans can also include vesting provisions, meaning employees earn the right to employer contributions over time. This creates a clear retention incentive — employees who stay longer receive more of the benefit — helping align compensation with long-term commitment.

A Great Plan Strengthens People and Purpose

Stronger Retention
When staff feel secure with coverage for themselves and their families, more likely to stay, reducing costly turnover in your nonprofit.

Improved Well-Being

Access to health and wellness programs helps employees stay healthier, cutting down on stress and absenteeism while boosting energy.

Simple Access
Mobile and online tools make it easy for your team to check their benefits, submit claims, and get answers anytime, anywhere.

Clear Oversight

Regular reporting and plan reviews keep you in control, ensuring your nonprofit’s investment delivers maximum value.

The Ideal Pension Plan for Employee Retention

Explore a Pension Approach in More Detail

For employers looking to go beyond traditional retirement savings plans, there is a more structured approach that combines predictability, long-term value, and professional investment management.

The Ideal Canadian Pension Plan (ICPP) is designed to deliver a more pension-like outcome — helping employees build reliable retirement income rather than just accumulating savings.

For employers interested in going beyond traditional retirement savings plans, there are structured pension solutions designed to deliver more predictable long-term outcomes.

The is a multi-employer, professionally managed pension structure designed to improve retirement income while reducing administrative burden for employers.

Unlike typical workplace plans, it focuses on:

Lifetime retirement income, not just account balances
Lower fees through pooled assets (less than 1% in many cases)
Professional investment management with no employee decision burden
Minimal employer administration and no fiduciary responsibility

This type of structure is designed to address a key gap in traditional plans — employees often don’t convert savings into reliable retirement income.

Why Consider a Pension Structure Like ICPP?

Lifetime income focus
Moves beyond savings accumulation to provide predictable retirement income
Professional investment management
Assets are pooled and managed with a long-term strategy
Low, transparent fees
Lower costs can lead to better long-term outcomes for employees
No balance sheet risk for employers
Employers contribute a fixed amount with no future funding liability

Where It Fits

An ICPP-style structure works best for employers who:

Want to offer something stronger than a basic retirement savings plan
Are focused on long-term retention and employee stability
Have an established team and want to build a more permanent compensation structure

How It Complements Your Plan

Many employers start with a workplace retirement savings plan and evolve over time.

Start with: Workplace retirement savings (flexible, simple)
Evolve to: Pension-style structure (more stability, stronger retention)

This creates a clear path as your business grows.

Is This the Right Fit?

This isn’t for every employer — but for the right group, it can significantly strengthen your overall compensation and employee retention strategy.

Attract dedicated talent

Compete with larger employers by showing you care.

Retain staff and volunteers

Benefits create loyalty and reduce costly turnover.

Boost morale and performance

A cared-for team is a stronger, happier team.

Maximize limited resources

Smarter design means fewer wasted dollars.

Stay compliant

We help you manage requirements and keep your coverage up-to-date.

When you choose Nick Godfrey Insurance, you get a partner who understands small business and protects both your people and your mission.

Why Choose Nick Godfrey Insurance

With over 30 years of experience, we design employee benefit plans for organizations across Ontario. Our team understands the unique needs of small businesses and nonprofits—limited budgets, growing expectations, and the challenge of supporting people while managing costs.

We create group benefits that deliver meaningful health, dental, life, and wellness coverage without straining resources. Whether you’re a charity or a community organization, our tailored group insurance solutions help you offer affordable protection that strengthens retention, morale, and overall well-being.