With so many things to spend your money on, do you need to join your employee pension plan? Agreeing to have money withheld from your paycheque each month may not sound enticing.  

But passing up an opportunity to join a pension plan is a financial mistake. This is especially true if your employer offers to match some of your contributions. 

Group retirement consultant, Jim Yih of the Retire Happy blog weighs in on essentially saying no to free money. “Is your plan voluntary and you’re not taking advantage of free matching money from your employer? Then you’re missing out on a huge opportunity,” says Yih.  

So, before you decide you can’t afford to contribute right now, ask yourself: “Can I afford not to?”  

7 reasons you should be contributing to your employee pension plan

To help make your decision, here are 7 things to consider: 

1. Start contributing to your pension plan right away  

If you’re a new employee, the time to join your employee pension plan is now. The earlier you start saving and benefiting from your employer’s contributions, the more you’ll have at retirement. 

2. There’s no catch to participating in the plan  

Some employers have a matching program. This means your employer will add a percentage* of your contribution to your account. This will help your savings grow faster. It’s that simple. 

(*Whatever your employer agrees to and is in the terms of your pension plan). 

3. You’ll save tax by participating 

Contributions to and growth within a registered plan are tax-deferred until you withdraw the money. This means you don’t pay tax until you take money out.  

Plus, if you make your contributions through payroll deduction, you’ll also get immediate tax savings. How? Because you make pre-tax contributions. Just like in an RRSP, your contribution reduces your taxable income. 

4. Convenience

With automatic payroll deductions, you can contribute money regularly, without lifting a finger. It’s also far easier for you to review and research an investment fund than choosing individual stocks and bonds on your own.

5. A little saving today means more money tomorrow 

Workplace pension plans require that you save regularly. It may surprise you to see how much a small contribution each month can add up over time. 

 Monthly savings with a   rate of return of 6%

 5 years

 14 years

 20 years













6. Choose the risk

Most workplace pension plans allow you to choose where your contributions are invested. A variety of options gives you the flexibility of making choices that best fit your investment risk level.

7. It’s never too late to start contributing  

The earlier you start and the more you contribute, the bigger your savings. However, you can still benefit no matter when you join the employee pension plan.   

Read more: How to make the most of your pension plan

Need help understanding your retirement savings options?  

Joining your employee pension plan can help you make the most of your retirement savings. But, if you don’t have an employee pension plan, you can create your own retirement savings plan.  Whatever the case, a Sun Life advisor can help.  

Most advisors now meet with Clients virtually. Find an advisor now.  


This article is meant to only provide general information. Sun Life Assurance Company of Canada does not provide legal, accounting, taxation, or other professional advice. Please seek advice from a qualified professional, including a thorough examination of your specific legal, accounting and tax situation.