Group retirement complements group insurance and keeps this company competitive
When Lan Shi went in search of a robust group retirement plan for TAM International Canada in 2011, one of her primary goals was to equip employees with greater control over their financial futures. The financial controller of the Calgary regional office of Houston-based TAM International also wanted to make sure her employees had a program comparable to the one offered by the parent company.
A mother of two engaged in planning for her family’s future herself, she says everyone at TAM Canada agreed the decision to offer a group retirement plan was solid. “This way, you take a little bit each month from payroll and you don’t even notice it,” she explains. “I think everybody feels safer that they’re putting away something.”
The case for group retirement plans
In a survey of small and medium-sized company decision-makers conducted by Environics Research Group for Standard Life in 2012, nearly all said their firm offered a group insurance plan to executives (94%) and non-executives (95%). The numbers for group savings and retirement plans, however, were much lower: 67% had a plan for executives and 64% had a plan for non-executives.
That’s despite widespread agreement among the decision-makers on the benefits of group savings and retirement plans:
- 87% agree they make it easier to attract new employees
- 86% agree they help maintain a competitive position within their industry
- 81% agree they help retain skilled employees
- 81% agree they increase employee loyalty and engagement
As a smaller employer in the highly competitive oilfield service industry, TAM Canada’s management group knew the company had to offer something beyond salary to attract and retain employees. So Lan approached TAM Canada’s longtime group benefits advisor with a mandate to implement retirement benefits that would complement the company’s generous insurance benefits and help set TAM Canada apart from its rivals.
Finding “the one”
After a detailed discovery process, Lan’s advisor conducted a diligent audit of available group programs that matched her requirements. The finalists included a variety of pension and RRSP options from several carriers – but one plan stood out.
The advisor recommended a group RRSP from Standard Life in which employees would contribute 6% of their regular wages, while TAM Canada would match 25% of those contributions. It would be a solid addition to the company’s group insurance offerings, which included 100% paid medical and drug benefits, dental, life insurance set to three times an employee’s regular wages, critical illness coverage and short-term and long-term disability insurance.
“Since TAM has an RRSP matching policy, it’s one of the attractions for new potential candidates,” Lan explains. “Also, since our plan allows employees to cash the savings out at any time, some employees use it as a house down payment option. It’s a great way for employees to save.”
Making the plan a success
Lan met with Standard Life’s representative, who demonstrated a deep understanding of the investment offering and explained the product, service commitment and next steps. Once the program was in place, an education specialist met with employees to introduce them to the plan, guide them through enrolment and lead them through the “go-live.”
Support from the supplier – ranging from educational seminars and a call centre for employees to administrative assistance for Lan’s team – has been integral to the plan’s success. Today, 50% of TAM Canada’s 48 full-time employees (as of September 3, 2014) are enrolled and actively setting aside funds for a more financially secure retirement.
Lan advises other small to medium-sized businesses to consider providing a similarly comprehensive benefits package if management is willing to invest in staying competitive. “It’s an employee retention initiative. It also helps employees save for their future – not only for retirement purposes, but also for rainy days,” she says.
For additional insights and tips, visit standardlife.ca/mySME