COLLECTED WISDOM™ on Canadian Pension and Retirement Plan Issues

More retirement plan advisors are dealing with Canadian plan issues. We track many of those subjects here.

This archive contains not only the most current material on the topic, but also older items that are still relevant, provide background, perspective or are germane to the topic.

If you find a broken link or an items that you feel is outdate, irrelevant or no longer appropriate, please let us know.

Missing Pension Plan Members in Canada

The National Institute on Ageing has released a significant report titled "Missing Pension Plan Members in Canada," which addresses the issue of individuals who cannot be contacted by pension plan administrators due to outdated contact information or other complications. With Canada's aging population, the issue has become increasingly concerning, particularly in Ontario, where nearly 200,000 pension members are considered missing, totaling $3.6 billion in unclaimed benefits. The report highlights these challenges and explores potential solutions to help reconnect Canadians with their entitled retirement benefits.

Source: Niageing.ca, December 2024

How Canadian Employers Are Supporting Plan Members' Investment Decisions Amid Rising Cost of Living

In 2023, Hofmann-La Roche Ltd. assessed the financial wellness of its multigenerational workforce in light of the rising cost of living following the pandemic. They recognized the need for increased flexibility to help employees better manage and save for retirement. This insight was shared by Rana Kassab, the company's director of rewards and recognition, during a panel discussion at Benefits Canada's 2024 Defined Contribution Investment Forum.

Source: Benefitscanada.com, November 2024

HOOPP and Abacus Data Release the 2024 Canadian Retirement Survey

When people talk about their retirement, it often focuses on freedom from work, spending time with friends and family, and perhaps traveling the world on luxury cruises. But the retirement dream may never be realized for millions of Canadians who are woefully unprepared for their post-work years, according to new research from the Healthcare of Ontario Pension Plan and Abacus Data which suggests a bleaker future could be ahead, especially for women.

Source: Pensionpulse.blogspot.com, June 2024

What Can Canadian DC Plans Learn From U.S. Pension Legislation?

Features such as automatic enrolment in 401k savings plans are helping U.S. employees become retirement-ready, said Mark Iwry, a non-resident senior fellow at the Brookings Institution. As a result of auto-enrolment legislation, millions of workers who wouldn't be saving for retirement are now participating in a workplace retirement plan, he said. Adding the expansion of auto features in the Canadian retirement landscape would likely have a similar impact.

Source: Benefitscanada.com, June 2024

Seven Steps Toward Better CPP/QPP Claiming Decisions: Opportunities and Obstacles to Shifting the Paradigm

More than a thousand Canadian baby boomers are making the CPP/QPP claiming decision every day. An overwhelming majority (9 in 10) choose to claim benefits by age 65, whether due to natural human bias, general lack of awareness of how CPP/QPP programs work, or common financial planning practices. In this paper, Dr. Bonnie-Jeanne MacDonald, Director of Financial Security Research for the NIA, explains why people claim these benefits earlier than they should, why better-claiming behavior is important, the obstacles to progress, and what a paradigm shift would look like.

Source: Niageing.ca, April 2024

Canadian Plan Sponsors More Vigilant of Cybersecurity Risks When Dealing With Third-Party Vendors: Expert

Data management and transference are key areas of risk for pension plan sponsors as the vulnerability of engaging with third parties creates opportunities for cybercriminals, says Jillian Kennedy, a partner at Mercer. According to an online brief published last year by Ernst & Young, third-party service providers hired by public pension plan sponsors tend to be desirable targets of cybercriminals. Vulnerabilities can be found in plan sponsors' websites and member portals, said the report, noting investment organizations are also at risk due to the handling of investment operations conducted by its staff.

Source: Benefitscanada.com, January 2024

Survey Finds 74% of Canadian Workers Say It's Important for Employers to Offer Retirement Savings Options

Roughly three-quarters (74 percent) of Canadian employees say it's important for their employer to offer a retirement savings option, according to the latest mental-health index by Telus Health. The survey, which polled 3,000 respondents, found that 70 percent reported not knowing or being unsure of how much savings they'll need to maintain their desired standard of living in retirement. Forty-four percent said they're concerned about being able to purchase or rent a home and 30 percent said they want benefits packages with financial planning solutions.

Source: Benefitscanada.com, October 2023

Canadian Women Are 16% Less Confident About Retiring Than Men: Survey

Just over half (52 percent) of Canadian women say they feel financially confident about retiring at their target age, compared to 68 percent of men, according to a new survey by the Bank of Montreal.

Source: Benefitscanada.com, March 2023

Canadian Employees Delaying Retirement Due to Rising Cost of Living: Survey

Nearly two-thirds (62 percent) of Canadian pre-retirees say the rising cost of living is preventing them from retiring when they'd like to, up from 56 percent in 2021, according to a new survey by Fidelity Canada. The survey, which polled more than 1,900 Canadians aged 45 and older, found 55 percent said a lack of savings is holding them back from retiring, while 45 percent cited the performance of their investments.

Source: Benefitscanada.com, November 2022

Report Urges Pension Plan Fiduciaries to Focus on Finance When Considering ESG Factors

A new report from the C.D. Howe Institute says pension plan fiduciaries shouldn't ignore climate change and other environmental, social, and governance factors that are relevant to financial purposes. However, when plan fiduciaries use ESG factors to prioritize social or environmental concerns, such as those expressed by plan members, they put themselves on shaky legal ground, said the report.

Source: Benefitscanada.com, November 2022

Canada's Retirement System Remains Strong, but DC Pension Plans Facing Inflation Risks: Report

While Canada's pension system continues to rank well globally, the current economic environment poses particular risks for defined contribution pension plan sponsors and members, according to a new report by the CFA Institute and Mercer.

Source: Benefitscanada.com, October 2022

Canadian Employers Embracing Innovation, Flexibility in DC Plan Design

With inflation reaching its highest level in four decades and people facing several competing financial priorities, including simple day-to-day expenses, Canadian plan sponsors are bringing flexibility to their programs as they focus on catering to different needs and expanding the scope of their savings options.

Source: Benefitscanada.com, August 2022

58% of Canadian Pre-Retirees Contributing to Retirement Savings: Survey

While more than half (58 percent) of employees within 10 years of retirement are contributing to retirement savings, only about a third (30 percent) have established a thorough financial plan, according to a new survey by Age Wave and Edward Jones Canada. The survey, which polled more than 1,000 Canadians aged 45 or older who were retired or within 10 years of retirement, only a third (33 percent) of retirees said they're in great shape financially. On average, retirees started saving at age 37 but wished they had started saving at age 28.

Source: Benefitscanada.com, July 2022

Canadian Plan Sponsors Uncertain About Balancing ESG Factors, Fiduciary Responsibilities

Defined benefit pension plans and defined contribution pension plans are uncertain about how to incorporate environmental, social, and governance issues into their investment processes in a way that's consistent with fiduciary duties, according to a new white paper from the Association of Canadian Pension Management.

Source: Benefitscanada.com, June 2022

30% of Canadians Relying on Workplace Pension as Primary Source of Retirement Income: Survey

Almost a third (29 percent) of Canadians believe their employer-sponsored pension plan will be their primary source of retirement income, while 15 percent said they're relying on government pension plans, according to Lifeworks' latest financial well-being index. The survey, which polled 3,000 Canadian employees, found the overall financial well-being score decreased slightly to negative 2.4 from negative 2.3. Two-thirds (67 percent) said they're questioning how much money they'll need in retirement and, among these respondents, 44 percent said they're unsure and 23 percent said they didn't know.

Source: Benefitscanada.com, April 2022

Survey Finds Pandemic Is Impacting Canadians' Ability to Save for Retirement

Almost half (44 percent) of Canadians agreed the coronavirus pandemic has negatively impacted their ability to save for retirement and, as a result, 31 percent have changed their financial priorities, according to a new survey by Edward D. Jones & Co. The survey, which polled more than 1,500 adult Canadians, also found 33 percent of respondents said they're planning to contribute to their registered retirement savings plan, while 52 percent said they plan to forego their RRSP contribution and another 15 percent are undecided.

Source: Benefitscanada.com, February 2022

Fitting Liquid Alternatives Into Canadian DC Investment Portfolios

With DC plan members facing significant hurdles in managing their own investment portfolios, what role can alternatives play in alleviating these challenges? In his session at Benefits Canada's 2021 DC Plan Summit, Michael Sager, vice-president of multi-asset and currency management at CIBC Asset Management Inc., set out to answer this question.

Source: Benefitscanada.com, February 2022

Survey Finds 40% of Canadians Maintaining Retirement Savings Despite Pandemic

Despite the financial challenges experienced by Canadians throughout the coronavirus pandemic, 40 percent said they've continued to save for retirement, according to a new survey by life insurance provider PolicyMe Corp. More than half (54 percent) of survey respondents said they're adding to their emergency funds, while 48 percent are paying down debt and 45 percent are making regular contributions to their savings.

Source: Benefitscanada.com, January 2022

Tips for Evaluating a Target-Date Fund

Since target-date funds were introduced to the Canadian market in the early 2000s, they've become the dominant investment choice for defined contribution pension plan members. The funds, which are balanced with dynamic asset mixes that adjust as members approach retirement, are offered in a series with each fund designed to offer an optimal asset mix for investors with similar time horizons to retirement. But there are key differentiating factors to consider when evaluating different TDF options.

Source: Benefitscanada.com, August 2021

2021 Canadian Retirement Survey

New research from HOOPP and Abacus Data show two of three Canadians have saved nothing for retirement during COVID, retirement tops list of worries. Most Canadians have not set aside anything for retirement in the past year (63%) which is up 5% since last year. The survey also found a widespread belief that better access to workplace pensions is needed to avoid a retirement crisis.

Source: Pensionpulse.Blogspot.com, June 2021

Impact of COVID-19 on Pensions and Benefits in Canada

The COVID-19 pandemic has had significant implications for workplaces across the world. These implications extend into the realm of employee benefits, where employers and their workers must make difficult decisions regarding their retirement, health, and paid leave benefits. This International Foundation benchmarking survey captures a snapshot of current conditions.

Source: Ifebp.org, May 2021

Value Taking Centre Stage When It Comes to DC Investment Fees

Anyone flipping through a prospectus for an employer's DC pension plan or group registered retirement savings plan will notice a recurring theme when it comes to statements on investment fees: "Better than retail!" they might as well scream. It's a familiar refrain from both capital accumulation plan sponsors and providers trumpeting the lower rates available with group offerings, but it doesn't do much for Michelle Loder, a partner in DC solutions at Morneau Shepell Ltd. "It's a very low bar to clear," she says. "There's not much cause for celebration when you realize that Canada is one of the worst places in the world for retail investment fees."

Source: Benefitscanada.com, January 2021

Pandemic Impacts Canadians' Retirement Plans

A recent CIBC survey finds that the pandemic has impacted Canadians' savings and their anticipated lifestyle in retirement. Four out of 10 (40 percent) respondents worry about the effect of COVID-19 on their savings and retirement plans, with almost a quarter (23 percent) unable to contribute to their retirement nest egg since the pandemic began.

Source: Pensionpulse.blogspot.com, November 2020

Canadian Pension Plans Outperform Their Global Peers: Study

While Canadian pension plans hold quiet confidence, it turns out they do outperform their international peers when it comes to asset performance and liability hedging, according to a research paper from McGill University and CEM Benchmarking.

Source: Benefitscanada.com, August 2020

Canadians Reducing Retirement Savings Due To Coronavirus

More than a third (40%) of pre-retirees have a negative outlook on their life in retirement, the highest rates of negative retirement perception among survey respondents since 2014, according to the latest annual survey by Fidelity Investments Canada. The same percentage said their salary or earnings have decreased due to the coronavirus pandemic. Among those negatively impacted, 50% are reducing the amount of money they're able to save and the amount they're able to invest, compared to last year.

Source: Benefitscanada.com, June 2020

Ontario Employers Permitted to Suspend DC Pension Contributions, Says FSRA

The Financial Services Regulatory Authority of Ontario has confirmed it will permit a suspension of employer contributions to defined contribution pension plans temporarily. However, any change to either employer or employee contributions can only be on a go-forward basis and must be supported by an amendment to the plan text.

Source: Benefitscanada.com, April 2020

Canadian Millennials Facing Challenges Around Saving for Retirement: Survey

Among all survey respondents, 77 percent said they expect there will be a significant shortfall in retirement savings. A majority also said more Canada Pension Plan/government benefits will be required to support income needs (82 percent), that the federal government must do more to protect pension plans (89 percent) and that Canada will need to overhaul public and private pension and retirement savings (83 percent).

Source: Benefitscanada.com, December 2019

Canadians Increasingly Putting Retirement Savings on Back Burner

As Canadians struggle to make ends meet and manage growing debt, they're increasing putting their future financial plans -- including retirement -- on the back burner, according to a new survey by BDO Canada. The survey, which polled more than 2,000 Canadians, found more -- 39 percent compared to 31 percent in 2018 -- said they have no retirement savings, including 32 percent of baby boomers and seniors.

Source: Benefitscanada.com, October 2019

As DC Pension Plans Come of Age, Enrollment Is Key

While the process has been slow to date, it's clear the migration to defined contribution pension plans will continue in Canada. In light of these changes, how can DC plans operate more effectively? One key factor is strong enrollment.

Source: Benefitscanada.com, April 2019

Risks to Canada's Retirement System

Canada's multi-pillared approach of providing universal government programs, combined with a tax system that promotes voluntary pension and savings programs continues to provide Canadians with a strong retirement system. The key risks are low pension coverage among private sector workers, rising debt and healthcare costs, which will prove challenging as the population ages.

Source: Pensionpulse.blogspot.com, October 2018

Canada's Pensions in Great Shape?

In a post-financial crisis world, many US public pension plans are finally beginning to see a light at the end of the tunnel, but others are still at their wit's end on how to crawl out of their obligatory holes. Canada, on the other hand, is doing just fine with most of its pension plans at either fully funded status or close to it.

Source: Pensionpulse.blogspot.com, August 2018

Research Finds Low Prevalence of Retirement Wealth Among Ontarians

Some 61 percent of Ontarians said they have or anticipate having low liquid retirement assets, according to new research by the Canadian Institute of Actuaries. One in 10 respondents said they have or expect to have less than $25,000 in liquid retirement assets and don't own property. Another 40 percent of survey participants said they have or expect to have liquid retirement assets under $100,000.

Source: Benefitscanada.com, June 2018

The Shifting Landscape for Variable Benefits From Canadian DC Plans

There has been a lot of talk about variable benefits from defined contribution pension plans recently. Ontario has changes in the works to allow them, while a number of provinces have moved on the issue in recent years. And while it's not yet common for plan sponsors to offer variable benefits, some organizations have had the option in place for some time.

Source: Benefitscanada.com, May 2018

Financial Literacy Isn't Financial Wellness for Canadian Employees

Mercer announced findings of its Inside Employees' Minds Financial Wellness survey. More than 1,500 employees across Canada were asked about their financial attitudes, preferences and behaviors to identify steps employers need to take to help workers achieve it. Findings suggest that although financial literacy levels are high, knowledge is not translating into action and financial security and wellness.

Source: Mercer.ca, May 2018

Of Canadian Gen-Xers, 28% Have No Retirement Savings

More than a quarter of generation Xers in Canada haven't saved anything for retirement, a new survey from Franklin Templeton has found. While the 28 percent of Canadian gen-Xers who are in that position suggests a significant gap in retirement savings, the number compares favorably to the United States. In that country, 37 percent of gen-Xers haven't started on retirement saving.

Source: Benefitscanada.com, May 2018

Canadian Plan Sponsors Favoring Group RRSPs, DPSPs Over DC Plans

Canadian employers in search of simpler retirement products for their workers are looking to group registered retirement savings plans and deferred profit-sharing plans as a solution, say experts at capital accumulation plan providers.

Source: Benefitscanada.com, December 2017

Canadian Plans Sponsors Not Measuring Impact of DC Pensions

Few Canadian employers are tracking the impact of their DC plans or measuring their outcomes, according to new research by Willis Towers Watson. It found only 26 percent of survey respondents measure the retirement readiness of their employees at least every three years, while 30 percent monitor it periodically and 40 percent take no action at all.

Source: Benefitscanada.com, December 2017

Canadian Xennials Worried About Retirement Savings: Survey

Canadian xennials, those aged 34 to 40, are finding that the pressing expenses of daily life are getting in the way of saving for retirement, according to a new survey by TD Canada Trust. The survey polled Canadians of all ages, including this micro generation between generation X and millennials.

Source: Benefitscanada.com, December 2017

Majority of Canadians Worried About Level of Retirement Savings

A survey, which polled more than 1,500 Canadian adults, found the vast majority (85 percent) agreed they need to save more money, but 64 percent aren't making it a priority. The top obstacles to saving are: not earning enough income (46 percent); getting derailed by unexpected expenses (29 percent); and struggling to pay everyday expenses (24 percent).

Source: Benefitscanada.com, November 2017

Report Suggests Raising DC, RRSP Contribution Limit to 30%

The current environment is simply too difficult for Canadians to save adequately for retirement, given increased longevity and the low yields on appropriate investments, according to a new report by the C.D. Howe Institute that suggests raising contribution limits to retirements savings plans to 30 percent per year.

Source: Benefitscanada.com, November 2017

A Primer on Reviewing Statements of Investment Policies and Procedures

For Canadian plans sponsors that haven't comprehensively reviewed their statements of investment policies and procedures in a while, it may be time to refresh the document to ensure it correctly reflects the details of the plan and is in line with current regulations.

Source: Benefitscanada.com, September 2017

Employers Looking to "DBification" of DC Plans as Industry Matures

As the defined contribution pension industry continues to mature, Canadian employers are considering ways to improve their DC plans by introducing elements of defined benefit plans, according to an industry expert.

Source: Benefitscanada.com, September 2017

How to Deal With Canadian DC Pensions in an M&A Transaction

In the course of a merger or acquisition, there are a number of balls to juggle, not the least of which are the changes to employees' benefits packages. Article discusses some of the key considerations when it comes to defined contribution plans.

Source: Benefitscanada.com, April 2017

Are You Getting the Right Return on Your Retirement Plan Investment?

According to data from Willis Towers Watson, the average employer-provided value in a DC plan in Canada is 6.3%, assuming employees take advantage of the full company match available. It's a significant number for most organizations, so how can an employer measure if the retirement plan is providing the right return on the company's investment?

Source: Benefitscanada.com, March 2017

Over Half of Canadian Employers Provide Access to Financial Advice in Their Group Retirement and Savings Plan

Fifty-seven percent of defined contribution plan sponsors and 61 percent of group registered retirement savings plan sponsors say they provide their members with access to professional financial advice, according to the 2016 Capital Accumulation Plan Benchmark Report.

Source: Greatwestlife.com, February 2017

Fewer Canadians Contributing to RRSPs

Between 2000 and 2013, fewer and fewer 25- to 54-year-olds used registered retirement savings plans, a study from Statistics Canada has found. The number of individuals using the savings vehicle dropped by 16 percent to 4.2 million, and the total value of annual contributions fell by 26 percent to $22.5 billion.

Source: Benefitscanada.com, February 2017

Five Steps to Setting up a Canadian DC Pension Plan

You've decided to launch a defined contribution pension plan for your employees, but you don't know where to begin. What's the answer? How do you decide what's right for your organization? This article takes a five-step approach.

Source: Benefitscanada.com, February 2017

Mercer Unveils Canadian Retirement Outlook for 2017

Mercer launched its 25th Annual Retirement Outlook and Fearless Forecast series with an event in Toronto, projecting the retirement industry is poised for change in 2017 as more employers look at new approaches to meet the evolving pension landscape and employee demands.

Source: Mercer.ca, January 2017

Five New Year's Resolutions for Canadian DC Plan Sponsors

In the spirit of New Years' resolutions, here are five "resolutions" that defined contribution pension plan sponsors can undertake in 2017 to ensure their program is even more successful in the year ahead.

Source: Benefitscanada.com, December 2016

Canada's Great Pension Debate?

It's not just Canada's pension debate, it's a global pension debate and policymakers around the world better start thinking long and hard of what is in the best interests of their retired and active workers and for their respective economies over the long run.

Source: Pensionpulse.Blogspot.com, November 2016

Witness the Creation of Ontario's Modern Pension Regulator

To remain relevant and effective, industry regulators need to stay current. They must be attentive to economic realities, adapt to new technology and evolve with the industries they regulate. Ontario's pension regulator is overdue for a major overhaul that will bring it into the 21st century.

Source: Employmentandlabour.com, November 2016

Canada's OSFI Releases New Guides for DC, DB Disclosure Requirements

Canada's Office of the Superintendent of Financial Institutions has published updated guides for the disclosure requirements of defined contribution and defined benefit plans. The new guides incorporate changes set out in the Pension Benefits Standard Act and the Pension Benefits Standards Regulations.

Source: Benefitscanada.com, October 2016

Top Canadian DC Plans Report: A Look at the Latest Governance Trends

DC plan governance is a growing concern for plan sponsors. With all of the changes in mind, here are six key governance trends for employers to be aware of.

Source: Benefitscanada.com, September 2016

Employer Liability Relating to Fees in Employer-Sponsored Retirement and Savings Plans

Employers who sponsor retirement and savings plans for their employees should ensure that the fees paid by their employees within the plans are reasonable and adequately disclosed. Lawsuits in the U.S., and a recent regulatory undercover investigation in Canada, serve as a reminder of the risk of employer liability regarding fees. This article describes the risks for Canadian employers, and suggest a few simple things that can be done to reduce those risks.

Source: Employmentandlabour.com, August 2016

U.S. Employers Targeted by Lawsuits Claiming Excessive Fees in Retirement Plans: Could It Happen in Canada?

Legal risks have been emphasized by several lawsuits filed against U.S. employers in the last few months. This article provides a brief update on litigation activity in the U.S. which should give pause to Canadian employers who sponsor capital accumulation plans for their employees.

Source: Employmentandlabour.com, August 2016

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