Employee Retention. Solutions for building and retaining a productive workforce. May 21st, 2014 Tyler Ray RBC Group Advantage

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1 Employee Retention Solutions for building and retaining a productive workforce May 21st, 2014 Tyler Ray RBC Group Advantage Information included within is current as of April 2013, is for informational purposes only and does not constitute financial or other advice. TM 1

2 Current Employment Marketplace Industry leaders understand the importance of building and maintaining a strong team Key factors in achieving this: Attracting and retaining top talent Providing more value for money spent on employee benefits Promoting financial wellness Being creative with R&R 2

3 Attracting and retaining top talent 3

4 Attracting and retaining top talent Turnover can cost your company 50-75% of the employee s salary Low Mid High SOURCES: Aon Hewitt, Bersin & Associates, Gallup, Globoforce, McKinsey, Towers Watson, 2010 Right Management Survey 4

5 5 Attracting and retaining top talent

6 Employee Benefits - Value for Money Industry Trends Employees prioritize benefits in order of: 1. Wages 2. Comprehensive Insurance Benefits 3. Retirement Benefits Employers are reviewing their offerings in these categories to assess value for money/cost effectiveness as well as employee engagement 6

7 Employee Benefits - Value for Money Retirement Benefit Plans Industry Trends 1. Defined Benefit Pension Plans -> Defined Contribution Plans 2. DC Plans -> Group RSP Plans 3. Future Pooled Retirement Pension Plan? Reasons for change are reduced employer cost, reduced employer risk and increased employee engagement in company plan 7

8 Group Retirement Savings Plans What is it? A collection of individual RRSP accounts Members make contributions from their payroll Who regulates it? Individual accounts adhere to the Income Tax Act Plan is registered with the Canada Revenue Agency How are assets accumulated Plan Options and Investments Restrictions or Vesting CAP Guidelines define sponsor, member and administrator responsibilities Employer and/or employee contributions Personal and Spousal plan Investment options selected by employees based on choices available within the plan. Employer and/or employee contributions 8

9 Group Retirement Savings Plans Contribution Limit Tax Consequences for Company Tax Consequences for Members Withdrawals by Members Termination and Retirement 18% of the employee s previous year s earned income (up to $23,820 in 2013) plus or minus other adjustments. Should consult CRA Notice of Assessment from previous year. Employer contributions are considered part of an employee s salary, are considered tax deductible as an expense, and are subject to payroll taxes (e.g. CPP, EI, etc.). Payroll deduction contributions reduce income for tax purposes. Tax receipt issued for member and company contributions. Immediate tax savings through reduced withholding at source. Taxable as income unless transferred to another registered plan. Withdrawals are subject to withholding taxes. Assets can be transferred to an RRSP, RRIF. Assets can be taken in cash as a withdrawal from the plan. Assets can be transferred to a RRIF or used to purchase an annuity no later than age 71. 9

10 Promoting Financial Wellness Definition of FINANCIAL WELLNESS: The balance between having a healthy state of well being today while preparing financially for tomorrow. It is not necessarily about being wealthy, but it is a state of psychological well being in which one feels they have control over their current finances and financial future. 10

11 11 Promoting Financial Wellness

12 Creative Employee Benefit Best Practices Providing R&R programs that encompass benefits i.e. Bonuses to Retirement Plans for achieving milestones or goals, directing bonuses to plans achieve tax sheltering for employee etc. Enhancing employee benefit packages through other non-traditional means i.e. Using reward points earned through company credit cards for employee R&R, provide value add partner rewards at minimal or no cost to company 12

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