'Our biggest weakness is a lack of pension or retirement plan coverage in the country,' says Common Wealth CEO
The federal government’s recent $29.9 million investment to help personal support workers (PSWs) save for retirement is being welcomed as a meaningful start but whether it’s enough is another matter entirely.
Alex Mazer, co-founder and CEO of Common Wealth Pension Services, is at the centre of the pilot program. While he doesn’t hesitate to call the project a much-needed development, “is there more the government can do? Absolutely, both within the sector and more broadly,” he said.
While the immediate goal is to get 5,000 personal support workers saving and build up approximately $40 million in retirement assets, he believes sustained progress will require more than one-time funding.
“There’s about 11 million Canadians that don’t have a retirement plan. Additionally, there’s about half a million small businesses with more than five employees that don’t have a retirement plan… Ideally, there should be an ongoing employer contribution as part of those plans as well,” he added.
He argues that funding workplace retirement plans is a smart business move for plan sponsors, pointing to clear benefits like employee retention, productivity, and recruitment. He wants stakeholders to recognize that “the ROI on retirement plans is high. Not everybody understands how cost effective it can be.”
Beyond the business case, Mazer advocates that every working Canadian should have access to a decent retirement plan through their job. While he acknowledged the value of CPP, he insists it's not sufficient for most people. He believes supplementary workplace savings are essential and largely missing.
According to Mazer, most of the federal funding - more than 90 per cent - will go directly toward incentivizing personal support workers to save. This includes an upfront bonus for opening an account, matching contributions, and other rewards designed to encourage smart financial behaviours and consistent saving habits.
Meanwhile, a smaller portion of the budget, roughly 8 per cent, will go toward education, outreach, and technology. That includes developing accessible, mobile-first platforms so PSWs, many of whom don’t have desktop access and work irregular schedules, can easily enroll and manage their accounts on their phones.
The program is designed around a matching contribution structure, where savings are incentivized by government funds instead of employer dollars. Mazer believes that if the program can prove its value, particularly in improving retention and encouraging long-term savings, it could lay the groundwork for more consistent employer involvement down the line.
The ultimate goal is to remove barriers and ensure that participants can understand how the program works and fully benefit from it. Mazer stressed the importance of clear communication, bilingual access, and streamlined digital tools. There’s also a modest allocation for program administration to support member services and financial education, he noted. While it’s front-loaded to give workers a needed boost, the intent is to establish habits that stick.
Mazer highlighted two specific policy options that could complement or follow the current program. The first is a savings incentive modelled after the US Saver’s Credit, which he explained as a tax credit for people that are below a certain income threshold and who save in Roth IRAs. Common Wealth notably proposed this in Canada as the "Canada Saver’s Credit" back in 2019. The second would target small and mid-sized businesses through a tax credit for offering retirement plans.
With over 400,000 PSWs across Canada, Mazer is underscored that “if the pilot works well, I could definitely see an expansion of a program like this,” he said.
Before the federal government got involved, the retirement savings initiative for PSWs began as a collaboration between Common Wealth and SEIU Healthcare, the latter of which represents around 65,000 frontline healthcare workers. Mazer noted how many PSWs lack any pension coverage or employer-sponsored retirement plan, especially those working in non-hospital settings like home care.
The team developed a plan specifically for these lower-income workers using the Tax-Free Savings Account (TFSA) structure, since many would eventually qualify for the Guaranteed Income Supplement and couldn’t risk losing those benefits due to registered retirement income, explained Mazer.
“We wanted to make sure they didn't have those benefits clawed back, hence using the TFSA… We've been working with the union over a number of years to grow that plan through collective bargaining and getting people to sign up as individuals. It's really meant to be like a portable plan that people can take from job to job, because a lot of PSWs will change jobs frequently. Because a lot of these workers don't have employer matching [benefits], they don't have existing savings so it was important to see if we could find a way to kick start their savings,” explained Mazer.
Mazer emphasized that the immediate focus is execution and making sure the pilot delivers on its promises. He noted that strong communication and education efforts will be critical to the program’s success.
Mazer urged plan sponsors, especially those who don’t currently offer a retirement plan, to reassess their approach considering growing evidence that retirement benefits play a critical role in attracting and retaining staff. If the federal government is treating retirement savings as a strategy for workforce retention, he argued employers should be paying attention.
“If an employer sees talent attraction and retention is a key challenge… I think they should take a second look, or maybe a first look, at setting up a retirement plan,” he said. “We see a lot of plans out there that have low participation. They have tools, but only 10 per cent of people at most have used them.”
He also pointed to recent CAP Guidelines as a reason for sponsors to review whether their plans are delivering on key outcomes like employee engagement, retention, and financial readiness.
“It's a big opportunity for us to expand coverage in Canada. Every study that's been done of Canada's retirement system shows that our biggest weakness is a lack of pension or retirement plan coverage in the country," said Mazer.
