(Source: Benefits Canada) A majority of Canadian DB plan members are confident that their company’s pension plan will pay them a sufficient income in retirement, according to a survey released today by RBC Dexia Investor Services and Grant Thornton.
According to the survey of 879 employees who are enrolled in their company’s DB plan, 83% trust that when they retire their organization’s DB plan will have sufficient money to pay them, and 74% say that their DB plan will provide the majority of their retirement income. (Respondents indicated that they expect 55% of their retirement income, on average, to come from their plan.)
Despite concerns and challenges with DB pension plans making news recently, only 5% recalled hearing about underfunding problems or deficits in DB plans, and 4% say they’ve heard that DB plans are beginning to be phased out by a number of employers.
“Belief in the promise of a competitive pension payout remains strong in the minds of Canadian DB plan members,” said Scott MacDonald, head, pensions, insurance, financial institutions product, with RBC Dexia. “Even with the well-documented and highly publicized challenges DB plans have faced, this research shows that plan members both rely on and trust that their retirement income will be there when they are ready to stop working.”
Survey results further indicate that 49% believe they have an excellent or very good grasp of how much money they will receive in retirement from their DB plan. And the majority of respondents indicate that they will need to carefully manage their funds in order to live comfortably in retirement: 43% said that careful budgeting should allow them to do some things in retirement that they don’t do now, such as travel, and 37% said that careful money management should allow them to live independently and pay bills.