How many employees do you need to offer a group retirement plan?

Most owners I talk to assume a group retirement plan only makes sense at 50 or 100 employees. That used to be close to true. It isn’t anymore.

Why owners think they’re too small

For decades, group retirement plans were sold mainly by large insurers and built around large payrolls. Small employers could get a plan, but it came with higher fees and very little service. The economics were simple: a plan with a few hundred thousand dollars in it didn’t earn the provider much, so it got whatever attention was left over.

What changed

Digital providers rebuilt the model. Today a business of five people can give its employees the same plan structure a much larger company offers:

• the same kind of investment options,
• the same contributions deducted from payroll,
• the same employee app and planning tools.

Pricing changed too. I cover what small plans pay now in how much group plan fees cost your employees.

Where Canada stands

Fewer than one in five Canadian employers with 5 to 499 employees offer any workplace retirement plan. In the United States, nearly half of comparable employers do. That gap is the opportunity. When most of the businesses you compete with for staff don’t offer a plan, offering one makes your job posting stand out.

Source: C.D. Howe Institute, “Spreading the Benefits: A Targeted Tax Credit Is Needed to Expand Retirement Plan Coverage in Canada’s Private Sector,” March 2026.

What you get as the owner

A benefit your employees value. A real plan with real accounts, not a promise to “look into it.”

A line in every job offer. Candidates compare the whole package, and a match is easy to put a number on.

A plan for yourself. You can join the Group RRSP alongside your team. One caution: if you own 10% or more of the company’s shares, you can’t be a member of a DPSP. More on that in Group RRSP vs. DPSP.

If your business is in Quebec

Quebec is the one province where offering a plan can be mandatory. Employers with five or more eligible employees must offer a Voluntary Retirement Savings Plan (VRSP) unless they already offer a qualifying workplace plan, such as a Group RRSP with payroll deductions. Check Retraite Québec’s current rules before you decide, because the eligibility details matter. Outside Quebec, private employers aren’t required to offer a plan.

Who can be included

You decide the eligibility rules when you set up the plan. Common choices are a waiting period of three to six months after hiring, and whether part time employees are included. Whatever you choose, write it down and apply it consistently to everyone it covers.

Sources: C.D. Howe Institute (March 2026), as cited above; Retraite Québec, Voluntary Retirement Savings Plan employer obligations. General information only.

Common questions

How many employees do you need for a group RRSP in Canada?
There is no minimum in the tax rules. The minimum is set by the provider. Many modern providers accept plans with two employees.

Can a business with two employees have a group retirement plan?
Yes. A business with two employees can set up a Group RRSP, and a DPSP if the employees are not 10% or more shareholders and the company has profits.

Do I have to offer a group retirement plan?
Outside Quebec, private employers are not required to offer one. In Quebec, employers with five or more eligible employees must offer a VRSP unless they already offer a qualifying workplace plan.

Can part time employees join a group retirement plan?
They can if your plan’s eligibility rules include them. You set those rules when the plan is created, and they must be applied consistently.

Are group plans more expensive for small businesses?
Historically, yes. Small employers often paid the highest fees. Newer platforms now price small plans much more fairly, so it’s worth comparing quotes.