Canadians don’t take advantage of benefits offered by group RRSPs, says Sun Life

Many eligible Canadians are failing to take advantage of the group RRSPs offered by their employers.

According to data from Sun Life Financial, of the nearly 500,000 Sun Life members eligible for employer-sponsored RRSP programs, only 230,000 take advantage of them. Since many of these plans include company matching of employee contributions, this means Canadians are leaving money on the table.

“Sun Life wants to remind Canadians to look at their overall retirement picture when considering RRSP investments,” said Mary De Paoli, senior vp, group retirement services, Sun Life Financial Canada, in a news release. “Eighty-four per cent of our clients offer their employees a group RRSP plan, yet less than half of those eligible actually participate. There are also many Canadians who don’t take advantage of their employer’s offer to match their contributions. That leaves millions of Canadians who aren’t reaping the benefit of programs their employers provide.”

In addition to retirement savings, Sun Life says group RRSP plans offer a number of additional benefits to employees:

• Group RRSP contributions are deducted pre-tax.
• Employers often receive a volume discount through group RRSP programs, meaning fund fees are often much lower than retail mutual fund rates.
• Through their employer, employees gain access to a broad set of funds, many of which are available only to the high net worth market.
• Many employers offer a matching program, meaning the employer will match employee contributions. Matching programs can range anywhere from 25% to 150%, providing employees an immediate and guaranteed return on investment.

Sun Life Financial is the leading provider of defined contribution, group RRSP and Deferred Profit Sharing Plans in Canada with group assets of over $33 billion.