Sun Life Financial data shows Canadians don’t take advantage of the benefits offered by group RRSPs
TORONTO, Feb. 14, 2007 – While Canadians tend to focus on individual RRSP contributions, many neglect a critical part of their overall retirement savings – group RRSP contributions.
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 Vice President, Group Retirement Services, Sun Life Financial Canada. “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, 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 per cent, providing employees an immediate and guaranteed return on investment.
“At Sun Life, we encourage Canadians to save at home, save at work and save through the government,” said De Paoli. “While the Canadian government has made provisions to provide financial assistance during your retirement years, it’s still important to take a broad view of retirement planning. We encourage Canadians to save on their own, and to save at work through their group RRSP programs.”
Sun Life Financial is the leading provider of defined contribution, group RRSP and Deferred Profit Sharing Plans (DPSP) in Canada with group assets of over $33 billion. Sun Life Financial is a leading international financial services organization providing a diverse range of protection and wealth accumulation products and services to individuals and corporate customers. Chartered in 1865, Sun Life Financial and its partners today have operations in key markets worldwide, including Canada, the United States, the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China and Bermuda. As of December 31, 2006, the Sun Life Financial group of companies had total assets under management of CDN$436 billion.
Sun Life Financial Inc. trades on the Toronto (TSX), New York (NYSE) and Philippine (PSE) stock exchanges under ticker symbol SLF. www.sunlife.com
