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Company-paid services related to an employee’s retirement counselling are a tax deductible expense for an employer but are not considered a taxable benefit to the employee. Retirement planning can be a way to compensate an employee on a tax-free basis, while supporting their financial literacy and security.
Employee assistance programs (EAPs) have become more robust in recent years, including a focus on financial wellness, credit counselling, and other money matters beyond the traditional therapy services historically offered by providers.
One in two Canadians report their performance at work is impacted by stress caused by their personal finances according to the Canadian Payroll Association. This should cause senior management to look for ways to help employees for the good of their business, let alone to support their staff.
It may be debatable whether employers should bear the primary responsibility for the financial literacy and security of their employees. Individuals must be responsible to a degree as well. It is, however, clear that companies are in a unique position to help their workers, and in some cases, the benefits, even to the employer, can outweigh the costs. Government incentives, proactive HR managers, and employee initiative can all lead to a more financially savvy and secure workplace that can benefit everyone.
Jason Heath is a fee-only, advice-only Certified Financial Planner (CFP) at Objective Financial Partners Inc. in Toronto, Ontario. He does not sell any financial products whatsoever.