Employers with a group savings plan or those considering adding one are unsure whether they have a provider with the right capabilities, investment lineup, and fees.
The group savings market has shifted in recent years, and the provider your organization chose years ago may no longer be the best fit. Especially with newer entrants, there’s a higher bar for better capabilities and fees.
Here’s a plain-language breakdown of who the players are, what sets them apart, and how to decide between them.
Are the Top 3 an Obvious Choice?
The top three providers, measured by assets under management, have remained consistently the same in Canada over the last decade: Sun Life Financial, Manulife and Canada Life. Together, they hold about 80% of Canada’s non-Defined Benefit assets, such as DCPPs, RRSPs and DPSPs.
It’s tempting to stick with choosing one of the top 3, because they bring tangible benefits:
- Account types: They can handle all of the major group savings account types, including Defined Contribution Pension Plans, RRSPs, Deferred Profit Sharing Plans, TFSAs, and Non-Registered accounts.
- Fund lineup: Established providers excel at offering a full range of investment styles, including passive vs. active, value vs. growth, and specialty options such as real estate. This also makes moving providers easier, as an established provider can accurately match the features of the previous fund lineup.
- Complex Plan Rules: Many employers require matched contributions to remain in the savings plan for actively employed members, but allow withdrawals of “unmatched” or voluntary contributions. Established providers have systems in place to cater to these scenarios as well as vesting schedules.
- Client Care: The established providers have dedicated toll-free customer care centres available every weekday, typically 8 am to 8 pm ET.
That said, “capable” and “optimal” are not the same thing. Choosing one of the top three can be the right call — but only if you’re getting capabilities to manager your plan design along with a competitive investment lineup.
Fees, fees, fees.
| A 0.25% difference in fees, compounded over a 25-year career, can mean tens of thousands of dollars in a single employee’s retirement savings. |
Every group savings investment option carries an Investment Management Fee (IMF): the annual percentage charged on the value of each fund. It’s roughly equivalent to the Management Expense Ratio (MER) you’d see on a retail mutual fund.
Fees are never standard and can vary significantly between providers. Providers quote based on a range of factors:
- The size of your employee group and average account balances
- The contribution formula — how much the employer contributes on behalf of employees
- The overall mix of investment options selected for the plan
- The consulting relationship — providers are consistently more competitive for consultants who bring them meaningful, ongoing business
That last point matters more than most plan sponsors realize. Because Leslie Consulting Group works with providers across hundreds of Canadian employer relationships, we’re consistently able to negotiate fee levels that most employers cannot access on their own. The difference between a well-negotiated IMF and a standard quoted rate can mean thousands of dollars in additional retirement savings for each of your employees over the course of their career.
The newer entrants: competitive on price, still evolving
In recent years, Wealthsimple and Commonwealth have entered the group savings space and have been aggressively competing for new clients, particularly among small and mid-sized employers. Their pitch is straightforward: lower fees, simpler technology, and a modern digital experience.
For some organizations, this is a genuinely compelling option. But there are important limitations to understand before making the switch:
| Provider Type | Typical IMF Range | Investment Choice | Complexity Handling |
| Established (Sun Life, Manulife, Canada Life) | Negotiable — varies by plan size | Broad — all major asset classes and investing styles | Full — including withdrawal restrictions, and account types |
| Newer Entrants (Wealthsimple, Commonwealth) | Highly competitive — often lower | More limited / curated | Improving — some restrictions not yet supported |
How should you choose? Five questions worth asking.
There’s no universal right answer, and the best provider depends on your organization’s size, plan complexity, culture, and employee demographics. But these five questions can help guide your decision:
Single Sign on for Savings and Benefits: Approximately one third of plans combine group benefits and group savings plan with one provider, citing financial perks, smoother plan member experience, and simpler admin.
How much investment choice do your employees want? Employees who want to self-direct their savings need a broad lineup. Employees who prefer simplicity may be well-served by a curated, lower-cost option. Knowing your workforce helps you match the right solution. Newer entrants, such as Wealthsimple and Commonwealth, have fixed fund lineups heavily tilted towards passive investing.
How complex are your plan rules? If you have employer matching with vesting schedules, in-service withdrawal restrictions, or multiple contribution tiers, you need a provider who can handle that without workarounds. Not all providers can — yet.
What are the fee differences between providers? We don’t recommend chasing the cheapest option for the sake of the lowest fees, especially when the difference is minuscule, e.g., 2-3 basis points on equivalent funds. But as the fee difference increases, it materially affects the value of employees’ balances. The question to ask is whether the fees are appropriate given the value that you are receiving.
If you want to review your current group savings plan or want to consider setting one up, talk to us. You can reach out to us at hrcovered@lesliegroup.com.
