While plan members feel fairly confident about their retirement prospects, employers aren’t quite so optimistic, Benefits Canada‘s 2016 CAP Member Survey has found.

The biggest challenges facing employees around retiring successfully, according to employers, are insufficient savings (37 per cent) and insufficient understanding of their options (28 per cent), the annual survey found. Despite those concerns from plan sponsors, the survey found 73 per cent of employee respondents expect that, if they’re careful, they’ll be financially secure in retirement. At the same time, plan members expect an average annual rate of return of 17.3 per cent on their investments over the long term.

“There is a degree of self-confidence that seems to be completely turned on its head in the realm of expected returns,” says Christopher Goldie, retirement marketing at Franklin Templeton Investments and one of the survey’s advisory board members. “Individual plan members or investors simply don’t understand the nature of capital markets today or are very optimistic. I wish I could share their optimism.”

The survey also found nearly seven in 10 (69 per cent) employer respondents are more concerned about the potential legal risk of providing advice to their plan members. That compares to the 29 per cent that said they’re more concerned about the potential legal risk of plan members who retire with insufficient funds suing the organization for not ensuring they accumulated sufficient retirement income.

Read: What are the legal risks of CAPSA’s projected account balance guideline?

Taking a look at some of the trends for the future of the industry, the survey asked plan sponsors about their familiarity with and the likelihood that they would use robo-advisors. More than half (53 per cent) of respondents said they were familiar with robo-advisors, but only 25 per cent said they were likely to consider using them in some way as part of their workplace retirement savings plan.

Another hot topic this year was the agreement reached by federal and provincial finance ministers to enhance the Canada Pension Plan. The majority (82 per cent) of employer respondents support the proposed changes to the CPP, while 13 per cent oppose it and five per cent are unsure.

A majority (87 per cent) believe the changes to the CPP will ultimately improve retirement income levels for individual Canadians. More than half (57 per cent) said higher CPP payouts will result in Canadians not saving as much in workplace retirement savings plans. A quarter (24 per cent) of respondents said their organization was likely to reduce its contribution rate under its defined contribution or group registered retirement savings plan as a result of the higher CPP premiums.

Read: Actuarial report on enhanced CPP contains some interesting tidbits for plan sponsors

Dianne Tamburro, vice-president at Accompass Inc. and one of the survey’s advisory board members, noted that employer-sponsored retirement savings plans aren’t the only source of retirement savings for members. “Plan sponsors should explain to employees that their retirement savings plan is one piece of the puzzle and the members, along with government benefits, need to finish the other 70 to 80 per cent of the puzzle that the plan isn’t going to provide them in retirement,” she said.

“Plan sponsors are generally too shy to tell members: ‘This is what the plan is going to get you. Is that enough for you?’”

Read more findings from the 2016 CAP Member Survey

Copyright © 2017 Transcontinental Media G.P. Originally published on benefitscanada.com

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