Insurance companies offer the best group retirement plans
Insurance companies really understand products for a mass group of people. They have been in the benefit business the longest and the Group RRSP or Pension is simply a natural extension of the life, health and dental benefits they provide.
Low fees and no loads
Insurance companies have very competitive plans where there is no front or back end loading like the mutual fund industry. Their plans are usually “no-load” and they have much lower management fees in their group offerings than the mutual fund companies and even the banks.
Does size make a difference?
There are four main companies that administer group RRSP plans: insurance companies, mutual fund companies, banks and self-directed trustees. The biggest players in the group RRSP market are the insurance companies as they have been doing it the longest.
Combined, Sun Life, Great West Life, Standard Life and Manulife have over 70% of the total market share. The insurance cos are also key players in the non-financial group benefit market. Each group and strengths and weaknesses so choose wisely.
Broad investment options including guarantees
Because they have been at this so long, insurance cos offer a wide range of investment options including low fee passive index options, socially responsible options, target date funds and guaranteed segregated options. While banks and mutual fund companies also have a wide range, not all financial institutions offer guaranteed options.
Website and administration
Because of the size and market share dominance of these insurance companies, they really have the support systems necessary to serve a large group of members. If you think about it, the biggest employers all use one of the big four insurance players for their Group RRSP, Defined Contribution Pension or Defined Benefit Pension plan. Their dominance has given them the edge when it comes to web access and education for both the members and the employers.