How much should I contribute as an employer?

This is one of the most common questions employers ask. There are a few different ways to answer it.

  • How much can you afford? This is a question for you and your finance team to work out. One way to increase your contribution within budget is to take some of your initial retirement plan contribution from the salary pool. Recent surveys have shown that a majority of Canadians would accept a lower salary in exchange for a good workplace retirement plan.1

  • How much is enough for employees to retire? While this depends on a variety of factors, most Canadians need to save somewhere between 10-20% of their pay to be able to maintain their standard of living in retirement – assuming they are saving in a good plan. If your team’s average earnings are close to the Canadian average (a little over $50,000), then an employer match of 5% would give most of them a good chance of being retirement-ready, assuming that they save this amount consistently throughout their career. As provider of the Common Good Plan, Common Wealth Retirement provides each of your employees with personalized guidance about how much to save to achieve their retirement goals.

  • How much are peers/competitors contributing? Sun Life reports that among the minority of employers with under 100 employees that offer a plan, the average member contribution is $3,535 per year and the average sponsor contribution is $3,065 per year.2 However, the amount can vary widely by industry and sector, so it can be useful to check with peers to see what they are doing.

You can learn more about choosing a group retirement plan by downloading our guide for HR leaders.


1 Healthcare of Ontario Pension Plan, “Research finds Canadians choose greater retirement security over more pay” (September 29, 2020).
2 Sun Life, “Designed for Savings 2019: The benchmark report on capital accumulation plans in Canada” (2019). These figures are based on Sun Life provided plans only.

Making the case for a group retirement plan

If you’ve downloaded our guide on choosing a group retirement plan, you already know more than most Canadian employers. Hats off to you! You are doing your homework and are well on your way to choosing a plan you and your employees can trust. 

An important step in choosing a plan is to get your colleagues on board. Depending on the organization, this can include the board of directors, the executive team, finance, your employees, or some combination of these. 

Here are some tips for securing buy-in: 

  • Make a business case. This is especially important for boards, executive teams, and finance departments. Include the costs (external and internal) and benefits (attraction, retention, reduced stress, productivity) of the program. Compare offering a retirement program to other forms of compensation, including salary increases or other kinds of benefits. Include data about what peers in your industry are doing, and how offering a program can help you be an employer of choice, attracting and retaining the best talent and differentiating yourself from the competition. 
  • Show you understand the market. Especially if this is the first time you’ve offered a retirement plan, boards and executives will want to know that you’ve done your homework. You understand the landscape, the providers, the plan design options, and you’ve landed on a solution that will work best for your organization and your employees. 
  • Consider the cost of not providing a plan. When an employer chooses not to offer a retirement plan, employees are left on their own to save for retirement. The outcome of this approach is typically not good. For example, the median savings of Canadian households age 55-64 without pensions is a mere $3,000. While the cost of providing a plan may seem large, especially for a smaller organization, the cost for employee financial health and productivity of not providing a plan can often be much higher. 

Don’t worry: you don’t have to do all of this yourself. Most providers, including Common Wealth, have invested in research and tools (including our guide!) to help employers articulate the value of a good retirement plan. Don’t be afraid to ask your provider or advisor for help in filling in your business case, understanding what has worked with other employers, and supporting you as you navigate the internal decision-making of your organization.