November is Financial Literacy Month in Canada. The Financial Consumer Agency of Canada, the Canadian Foundation for Economic Education, the Investor Education Fund and other groups are making great strides with initiatives intended to improve financial skills and knowledge in schools, communities and workplaces. That’s a good thing.

For plan sponsors, financial literacy is seen primarily as a means of improving employees’ understanding of their plans so that they make better decisions and enjoy better outcomes. But, if that’s the goal, many sponsors would also do well to take a fresh look at their plan to ensure it’s designed with the end-users in mind—and doesn’t place unnecessary demands on the financial literacy skills of the employees it’s intended to serve.

Years of tax rule changes and new legislation have opened the door to an array of financial vehicles for retirement saving. Choice is a fundamental principle of our culture. And, generally speaking, the more choice we have, the happier we are. But when it comes to employee benefits, and especially retirement plans, choice is also a potential minefield that can paralyze members and hamper decision-making.

Video: Is your retirement plan a minefield?

In fact, it could be argued that the complex decisions most plan members face are beyond not only the financial literacy skills of most Canadians but also the knowledge of all but the most highly trained financial experts.

Tax rules and legislation aren’t the only culprits behind the current quagmire. Lack of guidance for plan sponsors is also to blame. It’s far too easy to accept a “technical” solution to a plan design challenge, especially if it’s presented by a trusted expert. If that solution allows you to tick the right boxes in terms of cost and compliance but offers too many options—or the wrong ones for your members—is it the right one for your plan?

Read: Communication: Impossible

So, what’s a plan sponsor to do?

Start with a clear understanding of your pension and benefits philosophy, including how it supports your business objectives and how pension and benefits are integrated into your broader rewards package. This involves reaching out to leadership to help shape guiding principles and ensure that you have their buy-in.

Invest upfront in the research you need to find out what matters most to your plan members and why. You may find, for instance, that they’re willing to contribute more to your plan than you expected, if it means having a more secure retirement income. Or, maybe they’d be prepared to accept a reduction in one area of your benefits plan to beef up another.

Use this knowledge to design a streamlined plan that promotes your core values and helps achieve business success. You can’t simply trust your own judgment on this. The only way to know if you’ve landed on a plan design that leadership will endorse and plan members can actually understand and appreciate is to ask them.

Finally, set up test teams or focus groups to assess your ability to explain the plan in plain language using your members’ preferred communication channels. Sometimes even small tweaks can make a big difference in how a plan is perceived or understood.

Yes, all this legwork will require time and money. But the process will help boost financial literacy levels across your organization. Your members will get a plan they can actually wrap their heads around and use to its full advantage—which is good for them, and for your organization as a whole.

Susan Deller is a principal with Eckler Ltd. and specializes in benefits communications consulting.

These are the views of the author and not necessarily those of Benefits Canada.

Copyright © 2020 Transcontinental Media G.P. Originally published on

Join us on Twitter

See all comments Recent Comments

Richard Turzanski:

Susan has delivered through her writings the most thorough and “easy to understand” explanations of retirement planning and design and communications considerations that I have ever read!!
Her articles are very helpful for both practitioners and employees and plan members.
Well done.

Wednesday, February 03 at 9:47 pm | Reply

Add a comment

Have your say on this topic! Comments that are thought to be disrespectful or offensive may be removed by our Benefits Canada admins. Thanks!

* These fields are required.
Field required
Field required
Field required