I already offer benefits and want to add retirement savings.
Small business benefits pillarRetirement is usually layered onto an existing benefits plan, so the benefits design comes first.
Group Retirement Pillar
Group Retirement Plans Ontario | Group RRSP, DPSP & Pensions
Direct answer
AEC Benefits is an Ontario brokerage placing both group benefits and group retirement plans. A group retirement plan in Ontario is usually a group RRSP, a DPSP, or a combination of the two, set up so employees save through payroll and employers can add matching or profit-based contributions. For most construction and small-business employers it is the natural companion to group benefits: benefits protect people now, group retirement helps keep them for the long run.
Key Takeaways
- •The three common structures are group RRSP, DPSP (deferred profit sharing), and pension plans, and many Ontario employers combine a group RRSP with a DPSP for flexibility and retention control.
- •Employer contributions to a DPSP are not subject to payroll taxes the way salary is, which often makes a group RRSP + DPSP pairing more tax-efficient than a straight raise.
- •Group retirement works best designed alongside benefits, not bolted on later, so eligibility, vesting, and contribution rules match how your workforce is actually built.
How to use this page
The real group retirement decision is structure, contribution strategy, and how it pairs with your benefits plan.
Most Ontario employers researching group retirement are deciding between a simple payroll-savings group RRSP and a more retention-focused group RRSP + DPSP design, then asking how it fits next to their existing group benefits.
What is the simplest place to start?
A group RRSP is the simplest start: employees contribute through payroll, the employer can match, and it is easy to administer. It is a strong first step for teams that want a retirement benefit without complexity.
When does a DPSP make sense?
A DPSP makes sense when an employer wants contributions tied to vesting and retention, wants to avoid payroll tax on the employer contribution, and wants more control than a plain group RRSP match offers.
How does this connect to group benefits?
Group retirement and group benefits solve different halves of the same retention problem. The strongest plans are designed together so contribution budget, eligibility, and employee communication line up across both.
I am weighing a raise against employer contributions.
Raise vs benefits calculatorA DPSP or RRSP match is often more tax-efficient than salary, and the calculator frames that tradeoff.
I run a construction or trades company.
Construction benefits pillarConstruction retention pressure is exactly where a benefits-plus-retirement combination pays off.
| Decision | Best next page | Why it matters |
|---|---|---|
| I already offer benefits and want to add retirement savings. | Small business benefits pillar | Retirement is usually layered onto an existing benefits plan, so the benefits design comes first. |
| I am weighing a raise against employer contributions. | Raise vs benefits calculator | A DPSP or RRSP match is often more tax-efficient than salary, and the calculator frames that tradeoff. |
| I run a construction or trades company. | Construction benefits pillar | Construction retention pressure is exactly where a benefits-plus-retirement combination pays off. |
How group RRSP, DPSP, and pension plans compare for Ontario construction and small-business employers, what they cost, and how to pair them with benefits.
| Criterion | Option A | Option B |
|---|---|---|
| How it works | Group RRSP: payroll-deducted employee savings, optional employer match | DPSP: employer-only contributions tied to profit and vesting |
| Payroll tax on employer contribution | Yes, treated like salary | No, exempt from payroll taxes |
| Vesting / retention control | Immediate, employee owns it | Can require vesting period to retain employees |
| Best use case | Simple, flexible first retirement benefit | Tax-efficient, retention-focused employer contributions |
Why group retirement belongs next to your benefits plan
Most Ontario construction and small-business employers come to retirement plans after they already offer benefits, or while they are setting benefits up for the first time. That is the right instinct. Group benefits protect employees against health, dental, disability, and life risk today, while a group retirement plan helps them build long-term security and gives them a reason to stay.
When the two are designed together, the employer can balance one contribution budget across both, keep eligibility and waiting periods consistent, and communicate a single, clear total-rewards story to the team instead of two disconnected programs.
The three structures Ontario employers actually use
- Group RRSP: the most common starting point. Employees save through payroll, the employer can match a percentage, and contributions reduce employees taxable income immediately.
- DPSP (Deferred Profit Sharing Plan): employer-only contributions that can be tied to vesting, often paired with a group RRSP. Employer contributions are exempt from payroll taxes, which makes the pairing tax-efficient.
- Registered Pension Plan (RPP / PRPP): a more formal pension structure, usually for larger or more established employers that want a defined, ongoing commitment.
Why a group RRSP + DPSP is often more efficient than a raise
When an employer gives a straight salary increase, both the employer and the employee pay payroll taxes on it, and the employee only sees the after-tax remainder. When the same money goes into a DPSP, the employer contribution is exempt from payroll taxes and lands directly in the employee retirement account.
For a construction or trades business trying to keep skilled people without inflating fixed wage costs, that difference matters. It is one of the clearest cases where a well-structured benefit beats cash on a dollar-for-dollar basis, which is exactly the comparison AEC Benefits helps employers run before they decide.
Reviewed by Steffen deGraaf
Steffen brings 20+ years in insurance and group benefits, construction job-site roots, and architectural technology training at Mohawk College. FSRA-regulated insurance broker specializing in Ontario group benefits.
View founder profileLast updated: May 1, 2026
FSRA Regulated
Ontario Insurance
Ontario construction benefits experience
Construction is in Steffen's blood: job sites as a teenager, architectural technology at Mohawk College, and 20+ years in insurance and group benefits for Ontario employers.
Meet Steffen and learn how AEC Benefits worksFSRA Regulated
Ontario Insurance Broker
Sources & References
Sources support the definitions, eligibility context, and regulatory references on this page. Carrier-specific pricing, eligibility, tax, and plan-design decisions still require current quote and advisor review.
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Frequently Asked Questions
What is the difference between a group RRSP and a DPSP?
A group RRSP is funded by employee payroll contributions with an optional employer match, and the employee owns it immediately. A DPSP is funded only by the employer, can be tied to a vesting period, and the employer contribution is exempt from payroll taxes. Many Ontario employers combine the two.
Do small construction companies in Ontario actually offer group retirement?
Yes, increasingly. A group RRSP can be set up affordably for a small team, and pairing a modest employer match or DPSP contribution with a benefits plan is a practical way for a 5 to 50 person construction company to compete for skilled people.
Is a DPSP contribution really more tax-efficient than a raise?
In most cases yes. Salary increases are subject to payroll taxes for both the employer and employee, while employer DPSP contributions are exempt from payroll taxes and go straight into the employee retirement savings. The raise vs benefits calculator helps you see the gap for your own numbers.
Should I set up retirement before or after my benefits plan?
Usually benefits come first because they cover immediate health, dental, disability, and life risk, but the strongest approach is to design them together so one contribution budget, eligibility rule, and communication plan covers both.
Related Pages
Want to talk through your options?
If you want real numbers instead of generic plan talk, AEC Benefits can pressure-test pricing, structure, and fit for your team.