In a Nutshell: Blog Highlights
- Employees want more flexibility in how they save through workplace plans
- Short-term goals like home ownership are influencing savings behaviour
- The solution is not withdrawals but better plan design, including TFSAs
- Programs like the Home Buyers’ Plan are helping bridge short- and long-term goals
The Deeper Dive
The Evolving Role of Group Retirement Savings Plans
For many years, group retirement savings plans were designed with a singular purpose: helping employees build long-term financial security.
However, employee expectations are evolving.
Today, employees are looking for flexibility. They want their workplace savings programs to support not only retirement but also key life milestones along the way. Importantly, this does not mean treating retirement plans as short-term cash flow tools. Instead, it means designing plans that offer the right mix of savings options to meet a range of needs. As a result, many employers are beginning to rethink how their programs are structured.
A Shift in Financial Priorities
To begin with, Canadian employees are balancing more financial priorities than ever before.
According to the 2025 Benefits Canada Employee Savings Survey, while 85% of employees still identify retirement as a key savings goal, nearly as many prioritize building emergency savings and saving for other life events.
At the same time, competing pressures continue to shape behaviour. The same survey found that:
- 73% of employees prioritize daily expenses
- 60% prioritize housing costs
- 50% prioritize debt repayment
This tells us something important. Employees are not stepping away from retirement savings. Rather, they are trying to balance it with real, immediate financial goals.
Flexibility Without Compromising Retirement
This is where the conversation needs to shift.
When employees look for flexibility, it can be tempting to think about access or withdrawals. However, from a plan sponsor perspective, that approach introduces complexity, administrative risk, and potential long-term consequences for retirement readiness.
Instead, the most effective solution is thoughtful plan design.
For example, adding a group Tax-Free Savings Account (TFSA) alongside a group RRSP or pension plan allows employees to save for shorter-term goals without disrupting their long-term retirement savings strategy.
This approach aligns with broader Canadian savings trends. According to the Canada Life 2026 Group Retirement Benchmark Report, employees are increasingly prioritizing flexible savings vehicles, with TFSAs continuing to grow in popularity due to their accessibility and tax advantages. In other words, flexibility is not about changing how retirement plans work. It is about expanding the tools available within the program.
Supporting Home Ownership Through the Home Buyers’ Plan
One area where flexibility already exists within the retirement system is the Home Buyers’ Plan (HBP). The HBP allows eligible Canadians to withdraw up to $60,000 from their RRSP to purchase or build a qualifying home, without immediate tax consequences, provided the funds are repaid over time.
This is a powerful example of how retirement savings can support short-term goals without undermining long-term outcomes.
For younger employees in particular, the HBP can make participation in a group RRSP more meaningful. Rather than viewing contributions as locked away for decades, employees can see a clear connection between saving today and achieving a major life milestone like home ownership.
Given that housing affordability remains a significant concern, this matters. According to the 2025 HOOPP Canadian Retirement Survey, 60% of Canadians report having little to no disposable income, making it more difficult to save for both retirement and a home.
Positioning the HBP within your group retirement program can help bridge that gap.
Why This Matters for Employee Engagement
Importantly, when employees see how their savings plan connects to real-life goals, engagement improves.
Research consistently shows that employees are more likely to participate in workplace savings programs when they understand the relevance to their current financial situation. The Benefits Canada survey highlights that employees are looking for programs that support both immediate needs and long-term financial security.
By introducing complementary savings options like TFSAs and educating employees on programs like the Home Buyers’ Plan, employers can make their retirement offerings more relatable and actionable.
What This Means for Plan Sponsors
So, what should employers take away from this trend?
Simply put, employees are not asking for access to their retirement savings. They are asking for flexibility in how they save. Many employers are responding by:
- Offering both group RRSPs and group TFSAs
- Educating employees on programs like the Home Buyers’ Plan
- Framing retirement plans as part of a broader financial strategy
- Helping employees align savings with different life stages
Importantly, this approach protects the integrity of the retirement plan while still meeting employees where they are.
Final Thoughts
Ultimately, the role of group retirement savings plans is expanding.
Employees still value retirement security. However, they also want to see how their savings connect to the goals that matter today, especially major milestones like buying a home. For employers, the opportunity is clear. By enhancing plan design and focusing on flexibility through the right savings vehicles, you can deliver a program that supports both long-term outcomes and real-life financial needs.
Contact us to learn more.
Danielle Roberge-Soke, B.Comm.
Group Retirement Consultant
