More expect to delay retirement

More Canadian employees expect to retire later than originally planned, according to the Canadian Payroll Association’s (CPA) sixth annual National Payroll Week Research Survey.

The report finds that 79% of employees expect to delay retirement until age 60 or older, up from 70% over the past three years. The main reason is insufficient savings.

Employees also continue to raise their expectations about the retirement income they will need for a comfortable lifestyle. Only 18% of Canadians now agree that savings under $500,000 will suffice, compared with an average of 21% over the past three years. And 68% of employees think they will need between $500,000 and $2 million to retire comfortably—up from an average of 60% over the past three years.

Despite these upward adjustments in expectations, the vast majority of survey respondents are far from reaching their goals. Seventy-five percent say they have squirrelled away less than a quarter of what they will need during their golden years—up from an average of 73% over the past three years. And even among employees closer to retirement (age 50 and older), almost half (47%) are still less than a quarter of the way there.

The report finds that half of all surveyed employees are saving just 5% or less of their pay. Over the past three years, an average of 47% said they were saving that percentage.

Of those who say they are trying to save more today than a year ago, fewer are able to do so—65%, down from an average of 67% over the past two years. Part of the reason for the low savings rate is that 44% of respondents are spending all of—or more than—their net pay. The top reasons for increased spending include children, home renovations and education.

Canadians enjoy good mental health

The majority (76.9%) of Canadians age 15 and older have flourishing mental health (defined as feeling good about and functioning well in daily life). That’s according to Statistics Canada’s 2012 Canadian Community Health Survey – Mental Health.

Another 1.5% of Canadians have languishing mental health (low positive emotions and low positive functioning), while 21.6% are in moderate mental health (neither flourishing nor languishing). When these mental health classifications are combined with information about the presence or absence of a mental illness, 72.5% of Canadians (19.8 million) are considered to have complete mental health. That means they’re flourishing and don’t meet the criteria for any major mental disorders, such as depression and bipolar disorder.

The figures also show that men and women are equally likely to have complete mental health: 72% and 73%, respectively. But other factors, such as age and marital status, also contribute to mental health.

Mental health tends to increase with age: 65% of people between the ages of 15 and 24 report complete mental health, compared with almost 80% of those age 65 or older.

Having a partner also boosts mental health. While 77% of people with a partner have complete mental health, the figure drops to 72% among widowed, separated or divorced individuals, and to 64% among single people.

Lower income and education levels are associated with less complete mental health. Only two-thirds of people in the lowest household income quintile are in complete mental health, compared with more than three-quarters of those in the highest household income quintile. Also, while 69% of people who haven’t completed their post- secondary education are in complete mental health, the figure is 74% among those who have done so.

Additionally, spiritual people are more likely to be in complete mental health than those who aren’t: 76% versus 66%, respectively.

Finally, people who live with pain that prevents most activities are less likely to be in complete mental health than people with no pain (55% versus 75%).

Meet an Advisory Board Member: Vic Medland, CEO, Ontario Teachers Insurance Plan

What are some of the highlights of your career in benefits so far?
Without a doubt, the highlight of my career was becoming CEO of OTIP—one of the most meaningful, robust and member-centric organizations in the Canadian insurance landscape. That was in September 2012.

What is one scary trend in Canada’s benefits industry?
The constant shift in benefits costs from public sector funding to private sector funding is a real spooky trend that is scary for the future of our plans. Direct cost-shifting of covered services, along with items such as oral cancer prescriptions versus in-hospital injections, make this even spookier. These significant shifts will apply pressure to both group plans and individual Canadians faced with an array of financial constraints associated with acute and ongoing medical issues.

Describe the best Halloween costume you’ve ever had.
I once went out for Halloween as an insurance salesman; the irony still haunts me today. The costume was a bit of a spoof, with a suit, my dad’s briefcase, fake glasses and teeth, a fedora and various name tags. It was related to a TV commercial that was airing at the time.

5 Scary Benefits Trends

  1. Rise of biologics
  2. Aging workforce
  3. Growing skills gap
  4. Low interest rates
  5. Employees not saving enough for retirement

Mental Health Summit

  • Nov. 5, 2014: Hôtel Omni Mont-Royal, Montreal
  • Nov. 12, 2014: Fairmont Royal York, Toronto
  • Dec. 3, 2014: Four Seasons Hotel, Vancouver

Stress, depression and anxiety are often invisible but take a toll on both employees and their companies’ bottom lines. Employers often understand the importance of employees’ mental health and its impact on productivity, but they may lack the tools to move from awareness to execution. This event will help sponsors to bridge that gap.

The 2014 Mental Health Summit will bring together Canada’s leading innovators in the mental health space to discuss how employers can put mental health high on their agendas and implement an action plan around it. The event will also provide tips on enhancing the psychological health of any organization.

Find more information on this and other industry events at

This Month in Numbers

68% of Canadian women feel confident when making investment decisions, compared with 83% of men — 2014 BMO InvestorLine study

Market Watch

Great-West Life has launched an interactive virtual resource centre for sponsors offering group retirement and savings plans. The centre simplifies the way sponsors can track whether their plan meets regulatory requirements and whether it helps members meet their retirement income goals. The centre provides enhanced reporting that illustrates member behaviours, helping employers to better understand member investment decisions.

Telus Health, an electronic medical records provider, recently acquired ZRx Prescriber, an electronic prescription technology, from Quebec-based ZoomMed. ZRx Prescriber allows physicians to access a patient’s insurance coverage information while writing a prescription. ZRx Prescriber also gives physicians access to contextual drug information from pharmaceutical companies about new drugs and drug substitutions. With the acquisition, Telus Health has become the first Canadian healthcare technology company to offer insurance coverage validation nationally at the moment of prescription.

The Empire Life Insurance Company has partnered with Express Scripts Canada to provide pharmacy benefit management services to its group customers. The agreement will take effect Feb. 1, 2015. The goal is to help sponsors better manage drug plan costs in response to greater use of costly biologics by plan members. The new offering will allow employers to provide comprehensive and cost-effective drug benefits, according to Empire Life.

Unigestion has started the Private Asset Allocator, a tool that aims to help institutional investors tailor their allocations to their specific objectives. The new tool helps investors to define the goals they want to achieve with private assets and rate these goals in order of importance. The tool then offers an allocation recommendation across the different types of private assets and calculates the key characteristics of the proposed portfolio.

Green Shield Canada has launched Change4Life, an initiative that uses advanced analytics based on extended health and drug claims data to target plan members diagnosed with chronic conditions, as well as members at the risk of developing them. Change4Life includes educational campaigns about chronic illnesses and programs that connect plan members with health providers in their communities.

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