NEWS RELEASE
New addition provides tax efficiency and talent retention benefits while streamlining plan administration
Toronto, Canada – April 5, 2022 – Common Wealth, Canada’s first low-fee, group retirement platform that supports plan members for life, announced today the launch of Deferred Profit Sharing Plans (DPSPs) as part of its suite of account types available in its award-winning digital group retirement plans.
With this launch, employers of for-profit companies can benefit from tax advantages and vesting features that encourage employee retention by using a DPSP as part of a group retirement plan. Common Wealth’s DPSP is unique in the market in that its platform streamlines the setup and maintenance of multiple account types, helping employers minimize the plan’s overall cost and administrative burden.
“At a time when employee retention is an ongoing challenge for business leaders and financial well-being is increasingly top of mind for employees, we’re excited to provide a solution to help employers balance the needs of their business with giving their employees a benefit they value,” said Jonathan Weisstub, co-founder and co-CEO of Common Wealth.
“Supporting multiple accounts within a single, streamlined onboarding process is just one way we make it easy for employers to use retirement benefits to their competitive advantage, while demystifying DPSPs for plan members” said Alex Mazer, co-founder and co-CEO of Common Wealth
Supporting retention and cost efficiency in challenging times
Employee retention is a big problem for many employers, especially in fast-growing sectors. A recent global survey by McKinsey & Company found that more than half (53%) of employers were experiencing higher turnover than in previous years, and nearly two-thirds of these expected the problem to persist or worsen.
DPSPs typically restrict the employee’s access to contributions during a vesting period. This allows employers to use their group plan as a retention incentive, which can be especially beneficial in high-turnover sectors. If employees leave the company before the vesting period ends, the account value is returned to the employer.
Because DPSP contributions are tax-deductible for the employer and exempt from federal and provincial payroll taxes, this can add up to tax savings over time. For example, an Ontario company with 50 employees contributing $1,200 a year per employee, can save more than $5,000 per year in taxes.
Plan enhancement responds to partner feedback
Common Wealth launched the DPSP in response to feedback from its growing network of distribution partners, including benefits advisors and payroll and HR system providers.
“Our advisor partners stressed the importance of DPSPs for clients who use retirement benefits as a key part of their recruiting and retention strategy,” said Mr. Weisstub. “By providing a plan with low fees, flexible design, low administration effort and payroll integration, Common Wealth is an ideal solution to help employers meet their HR priorities, while giving employees more confidence in their financial future.”
Media Contact
Janette Luu
jluu@commonwealthretirement.com
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About Common Wealth
Common Wealth is Canada’s first low-fee, digital group retirement platform that supports plan members for life. In its mission to provide all Canadians with financial security in retirement, the company provides businesses of all sizes and not-for-profit organizations with an award-winning, streamlined retirement planning and saving experience that is powered by a user-friendly digital platform and backed by partnerships with world-class asset management, group annuity providers, and custodial and trust services. To learn more, visit commonwealthretirement.com.
