The federal government is investing $29.9 million in the Service Employees International Union Healthcare’s retirement savings program to strengthen retirement security for Canada’s homecare workers.
The funding, announced earlier this month by SEIU Healthcare and Common Wealth alongside Minister of Jobs and Families Patty Hajdu, will provide more than 5,000 personal support workers and other homecare staff with access to the plan.
Eligible workers will receive a $1,000 enrolment bonus and up to $3,000 annually in dollar-for-dollar matching contributions. The initiative aims to build more than $40 million in retirement savings over the next two years, while tracking results to help industry and government shape future policy support for personal support workers and signalling that their work is valued.
Read: How SEIU Healthcare is making retirement planning accessible for members
Unlike hospital and long-term care staff who have access to pensions, homecare workers often face precarious hours, lower wages and little or no retirement coverage. SEIU Healthcare created a digital, portable platform that allows workers to carry their savings across employers. The plan includes both registered retirement saving plan and tax-free savings account options, protecting benefits such as the guaranteed income supplement, and invests contributions through low-fee, professionally managed target-date funds.
“Healthcare workers often move between employers and sectors,” notes Tyler Downey, president of SEIU Healthcare. “Portability ensures that when a [personal support worker] changes jobs, their retirement savings go with them — no complicated cash-out process, no disruption to contributions, no starting over in a new plan. And with low fees, their contributions grow faster than in traditional products.”
The federal investment is not only helping workers begin to save but also supporting workforce stability, Downey adds. “This investment kick-starts savings, keeps workers out of retirement poverty and proves what we’ve always known: when employers provide retirement security, they retain their workers. For members, the program provides dignity and the peace of mind that comes with knowing their futures are supported after a lifetime of caring for others. In the long term, the plan is designed to grow, scale and demonstrate to employers the retention benefits that come with providing retirement security.”
Turnover in the homecare sector can reach as high as 40 per cent annually, according to the SEIU. The union argues that offering access to retirement savings will help level the playing field with hospitals and long-term care, where pensions are more common. SEIU maintains this has the potential to improve recruitment, retention and ultimately the quality of care for seniors and vulnerable Canadians.
The program also offers lessons beyond homecare, Downey points out. “Unions built pensions for hospital and nursing home workers and now this funding levels the playing field for homecare. However, this cannot be just a union initiative. It must be a partnership between unions, government and employers. Employers also have a role to play by supporting workers. Too many in homecare still offer nothing toward retirement.”
Read: Pension dashboard could support Canadians’ retirement readiness: report
Common Wealth, which administers the plan, emphasized the broader retirement gap in Canada. The organization points to data showing that 11 million Canadians lack access to a workplace retirement plan and more than half have less than $5,000 saved for retirement. The federal government’s support for the retirement saving program is intended to demonstrate how portable, low-cost plans can be scaled to meet the needs of workers in sectors where traditional pensions aren’t accessible.
With Ottawa’s investment, the program is set to expand its reach, allowing thousands of homecare workers to save for retirement while testing new approaches to retirement inclusion and workforce stability.