Retirement plans deserve a spot among SMEs’ benefits roster

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working-retirement2Even though studies show that employee attraction, retention and engagement can be greatly enhanced with a group retirement plan in place, more than three-quarters of Canadian small business owners don’t have retirement plans for themselves or their employees.

Despite the customary constraints of time, budget and bandwidth, Greg Pallone, managing director of TRG Group Benefits, says small business employers should think about what happens to long-term employees when they leave employment. “Employee benefits, including health and retirement savings plans, have long been recognized as just good business. It’s part of the fabric of Canadian business.”

With changing times, Boomers may well be the last generation of workers to believe in the sacrosanct nature of benefits in the workplace. “But we can see Gen X starting to view employer-sponsored benefits as an important part of their compensation packages,” Pallone adds.

Bev Moir, associate director and senior wealth advisor at Scotia Wealth Management, also believes thinking of employee wellbeing throughout their work tenure, and into retirement, is the humane thing to do. It also makes business sense. “Well treated, well regarded and happy employees will represent your company better than disgruntled employees.”

Moir grants that very small businesses may not have the scale or wherewithal to deal with it. “But even if they can’t put plans in place, they can be committed to generating awareness; propagating retirement readiness.”

Moir suggests bringing in occasional speakers on the topic; approaching a trusted advisor; or drawing on some of your bank’s resources to bring in experts.

Pallone agrees. “There’s a significant knowledge gap among employees about what to expect at retirement. When combined with fairly low financial literacy, the years approaching retirement can be quite stressful.” A common refrain he hears at his retirement workshops is that it’s “just too late to properly prepare for retirement” and they wish they knew then, what they know now.  

Pallone too appreciates that adding a retirement plan to a roster of existing benefits can be prohibitive for small-scale employers. Small business enterprises, he says, have challenges of their own trying to keep even their health plans sustainable.

Transcontinental Media G.P.