Employers can reinforce the value of their workplace retirement plans by communicating to plan members about the importance of having money later versus money now, according to a new report by the National Institute on Ageing at Toronto Metropolitan University’s Pension Centre of Excellence.
The report analyzed responses from an NIA survey of 6,000 Canadians aged 50 and older, as well as behavioural economics research and administrative data. It found many employees prioritize having cash today over deferred compensation during their working years, attributed in part to behavioural biases such as present bias, loss aversion and lump-sum bias.
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The report also identified recurring moments when workplace plans are misunderstood or undervalued, including job candidates focusing on starting salary rather than total compensation, employees failing to contribute enough to receive the full employer match and retirees opting for lump-sum payouts instead of secure lifetime pensions.
Notably, among Canadians receiving defined benefit pension income, 92 per cent said it was an important source of household income, including 66 per cent who described it as essential — something they couldn’t live without.
Retirement plans can be well designed and well governed, but they’ll still be underappreciated by members, said Barbara Sanders, co-leader of the NIA’s Pension Centre of Excellence and the report’s co-author, during a session at Benefits Canada’s 2026 DC Plan Summit last month.
“[The report] looks at why this is happening, what are the obstacles and it gets into the behavioural science behind it. It also proposes a number of solutions that plan sponsors [and] providers can take away to increase both understanding and appreciation [by plan members].”
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Those strategies include a shift from an accumulation to a decumulation mindset, making the full spectrum of value visible and providing integrated tools that show how workplace pensions, personal savings and public programs such as the Canada and Quebec Pension Plans translate into net spendable retirement income. Indeed, the report found while 87 per cent of Canadians believe they understand how the age at which they begin claiming CPP/QPP benefits impacts payout, focus groups showed very few could quantify the actual impact of claiming before age 65.