Can a $7,500 bonus over two years move the needle on PSW retirement savings?
Canadian retirement provider Common Wealth has spent the better part of a decade trying to crack a problem most of Canada's retirement industry has been content to ignore: how do you build a savings plan for workers who can barely afford to save?
The answer, or at least the beginning of one, arrived last week when the fintech firm and its union partner SEIU Healthcare launched a federally funded savings bonus program for personal support workers through its My 65+ retirement plan.
The program offers up to $7,500 in bonuses over two years to PSWs who contribute to their retirement savings – workers who, in many cases, have never had access to a workplace pension. The program is funded by the Government of Canada's Personal Support Worker Retirement Savings Innovation Program pilot through a previously announced $29.9 million investment.
"We've been working together with SEIU to try and increase retirement security for PSWs now for almost a decade," says Alex Mazer, co-founder and CEO of Common Wealth. "A lot of them have not had the opportunity to be part of a workplace retirement plan. A lot of them have not saved much for retirement they would like to save. Many of them, when we did research with the group, have a strong interest in saving and a willingness to sacrifice, but they've struggled to be able to do that on their own, as many Canadians do. So the reason for getting the government involved fundamentally was that we felt there was an important role for government in boosting their savings.”
Since then, the team has been building the technology, educational resources, and service model behind the program, which launched last week as "a combination of making it very, very easy to claim bonuses and to get the most out of the program through the digital experience as well as a marketing education campaign," noted Mazer.
When asked whether the $7,500 can make a meaningful difference as a starting point, Mazer believes “it can make a big difference in getting people started.”
“It's a meaningful amount, especially if you think about compounding over several decades. It's not going to be sufficient, I don't think, for people to get to retirement security on its own,” he added. “It has to be accompanied by additional savings and ideally additional contributions from employers as well.”
Mazer breaks the bonus program down into four components. The first is a $1,000 sign-up bonus, which requires only a minimum $25 contribution. After that, the program matches contributions dollar for dollar, functioning much like an employer match, whether the contributions are recurring or one-time. A third bonus rewards sustained saving – contributing as little as $300 over 12 months triggers an additional $1,000.
The fourth component offers up to $500 for transferring in an outside account, which Mazer said is designed to help PSWs consolidate savings and move away from higher-fee, lower-quality investment products.
He argues the structure compares favourably to what most Canadians have access to.
"It's a pretty low barrier to entry that we think makes saving a lot easier than typically saving on your own for an RRSP where there's no incentive," he said, adding that even against employer-matched programs, elements like the sign-up bonus and continuous savings bonus are "quite unique.”
The broader goal is to use the program as leverage to get more employers offering matching contributions. He also notes the savings threshold PSWs need to hit for the maximum bonus is modest compared to other incentives on the market, calling it "a fairly robust incentive," he said.
According to Mazer, the program is aimed first and foremost at PSWs who don’t already have meaningful pension coverage through work - or for that matter, workers who are currently outside a robust workplace retirement system. That includes people in home care, disability support, and some long-term care roles, provided they meet minimum hour requirements and work for at least one employer that offers little or no retirement matching.
He also emphasized that the program is limited by both time and funding. Enrollment has opened to the first 4,000 eligible PSWs, with the broader goal of reaching 5,000, after which Common Wealth will assess whether another intake is possible. That’s why he believes eligible workers, as well as employers, colleagues, and advocates in the sector, should help spread awareness so more PSWs have a chance to participate.
Additionally, Mazer noted how ease of access has been a major priority. The sign-up process is designed to be quick, mobile-friendly, and simple enough for workers to complete without having to speak to an advisor, which matters in a sector where many workers do not have a computer or a fixed workplace.
At the same time, the organization has been backing that digital process with webinars, group enrollment sessions, and outreach through SEIU to make sure support is available and the program reaches as many PSWs as possible.
To that end, the My 65+ retirement plan was built on a TFSA structure rather than a traditional registered pension plan because PSWs earning typical wages are likely to qualify for the Guaranteed Income Supplement in retirement, Mazer explained, and a pension would trigger “clawbacks effects” on that benefit.
The plan is portable, open to frontline healthcare workers regardless of employer, and functions as a union-established, multi-employer model designed to fill the coverage gap for PSWs who have been shut out of conventional workplace pensions, Mazer noted. Top of FormBottom of Form
Still, Mazer argues that the retirement gap facing PSWs reflects a much broader coverage problem in Canada, where millions of workers still lack access to workplace retirement plans. He acknowledged that PSWs are concentrated in groups that have historically been less likely to receive pension coverage, including frontline workers, women, people of colour, and private sector employees.
Even among unionized workers, who tend to fare better than non-unionized staff, employers have often been hesitant to provide meaningful matching contributions.
He links that lack of retirement support to the sector’s high turnover, which he says can reach 40 per cent and creates strain for workers, employers, care recipients, and the healthcare system more broadly. According to Mazer, the program isn’t just about helping individuals save more; it’s also meant to test whether stronger retirement support can improve retention in a workforce that many PSWs remain deeply committed to.
He suggests that most do not leave because they dislike the work itself, but because low wages, weak benefits, and the absence of retirement security make it hard to build a sustainable future in the job. He sees the initiative as part of a wider workforce strategy aimed at strengthening senior care by making PSW roles more financially viable over the long term.
“It's quite challenging to make ends meet and to meet your financial goals on a relatively low wage with no retirement plan and kind of relatively meager benefits,” said Mazer. “So this is part of a broader workforce strategy in the healthcare sector to try and improve that part of our senior care system.”
