Canada Life has launched more flexible workplace savings options aimed at Generation Z employees, changing how group retirement plans can be set up for younger members.
Under the new options, announced on October 8, employees can direct their own contributions to short- and medium-term goals while the employer match or contribution is set aside for retirement. The insurer is also giving employers and plan sponsors a toolkit with an assessment, communications guidance, templates and short-form video, and it will run a campaign on TikTok encouraging young people to save for the long term.
Canada Life says employers that help younger workers see how savings serve near-term goals while building long-term security can better attract and retain talent. Julia McGillis, executive vice-president of workplace benefits and retirement, said that for many people retirement savings may need to feel different. Kate Nazar, senior vice-president of workplace retirement and savings, said asking young employees to plan decades ahead is hard when the next 10 years feel uncertain, and that Gen Z workers “can and do want to save” when options match their reality.
The launch follows joint research with Deloitte Canada into how the country’s youngest workers think about money and the future. According to the research, cost-of-living pressure is only part of the reason young workers struggle to save for retirement. Uncertainty about the future makes it harder for them to picture retirement at all.
The study drew on about 1,900 Canadian respondents, 40% of them Gen Z, using an experimental design, and Deloitte ran focus groups of 11 Gen Z corporate employees each. Gen Z respondents were twice as likely as the rest of the population to consume dystopian content several times a week, and significantly more likely to talk about existential concerns. Canada Life describes the link between consuming that content and lower ownership of long-term savings products as a correlation.
The paper puts numbers on the link. Gen Z spends about 74 minutes a day doomscrolling, roughly 70% more than the rest of the population, and each extra hour is associated with a 4.4% lower probability of setting up automatic contributions toward long-term savings. Deloitte’s Michelle Hilscher said thinking about the end of the world makes people 16% less likely to own and enrol in long-term savings, and that the finding holds across generations.
Young workers are saving, but they are also withdrawing more. According to 2024 Canada Life claims data cited in the paper, Gen Z employees withdraw 12% more from their RRSPs than millennials did at the same age, and 42% more than Gen X. Canada Life’s group retirement data also shows a 30-year-old today saves more and holds a higher RRSP balance than a 30-year-old did in 2018.
Traditional group retirement programs encourage employees to lock money away until retirement, which the research suggests many young workers find hard to relate to. Canada Life’s approach separates the two. The accompanying paper sets out five plan features: payroll deductions, a TFSA offered alongside the retirement plan so employees can make tax-free withdrawals for any purpose, personal contributions directed to shorter-term savings with employer contributions going to longer-term products, plan reviews every one to three years, and a match allocation tool that steers employer contributions toward longer-term vehicles.
The design carries a trade-off. Money directed to near-term goals is not being saved for retirement, which is the tension between employers who want young staff to value the benefit and sponsors who want plans to deliver retirement income. Canada Life has not said whether the flexible options carry additional fees, or which plans and employer sizes are eligible.
The communications findings are as specific as the plan changes. Testing showed Gen Z workers were generally unreceptive to headlines relying on fearmongering, dystopian framing or superficial pop-culture references, and responded better to messages built around resilience, agency and empowerment.
