Why insurers dominate group retirement
Group retirement plans in Canada have historically been sold alongside group health and dental benefits, and the insurance carriers that provide those benefits became the default retirement providers too. Today more than 80% of the market is held by three insurers. That concentration has given employers limited choice, and limited pressure on fees.
Where the extra cost comes from
Several structural features tend to push insurer plan costs higher. First, insurer plans are typically built on segregated funds, an insurance contract wrapper around the underlying investments that adds its own layer of cost. Second, fund lineups often lean on the carrier's own proprietary or sub-advised mutual funds, which carry higher management fees than index ETFs. Third, fees are layered: the fund manager's fee, the insurer's administration charge, advisor compensation, and HST. Finally, retirement pricing is often bundled with health and dental, which makes the true cost of the retirement plan harder to isolate and compare.
How big the gap is
Across major Canadian group RRSP providers, the all-in cost for a balanced portfolio is commonly well above 1% a year, and plans built on proprietary mutual funds tend to cost more. Small differences add up: on a $50,000 balance, a 0.50% difference in fees is $250 a year, and compounded over a 30-year career it can cost a member tens of thousands of dollars in retirement savings.
Why the fees are hard to see
Insurer fee disclosures often quote a 'fund management fee' that excludes operating expenses, HST, and administration charges. The number on the benefits summary can be well below what members actually pay. To compare fairly, ask your current carrier for the all-in cost, in basis points, for the portfolio most of your members hold. If it's hard to get a straight answer, that tells you something too.
How LINK is different
LINK holds low-cost ETFs directly, without an insurance wrapper, and is never locked to proprietary products. The platform fee, investment cost, and any advisor fee are disclosed separately, so you can see exactly what the plan pays. And because LINK's wholly owned subsidiary is a registered portfolio manager that manages member portfolios on a discretionary basis, every member gets a suitable portfolio from day one.
Breaking free: what switching looks like
Moving away from an insurer is simpler than most employers expect. Your retirement plan can be moved independently of your health and dental benefits, so you don't have to change everything at once. LINK reviews your current plan design and matching, a dedicated implementation manager handles setup and payroll integration, and LINK covers transfer fees when you migrate from an existing group retirement provider. Plans can be live on LINK in as little as two weeks.