More and more employers are worried about their staff members’ financial health, according to a Willis Towers Watson survey.
Among the 122 Canadian employers polled, 58 per cent of those that offer a defined contribution plan only see their employees’ preparedness for retirement as a significant risk. To tackle the issue, 81 per cent of respondents will focus on boosting employee engagement and communication over the next two years.
“In the private sector, the shift to DC plans is prompting employers to devote more resources to promoting retirement readiness,” Jeff Kissack, a senior retirement consultant at Willis Towers Watson, said in a news release.
Willis Towers Watson also found that the funds employees needed to have to retire at 66 in 2014 would be sufficient today only if they kept working until 69.
“Given the current market volatility, securing a comfortable retirement is going to take some Canadian workers more time to achieve,” said Karen Burnett, a senior retirement consultant at Willis Towers Watson. “As such, employers run the risk of having an increasing number of retirement-eligible employees who are working out of necessity rather than by choice.”
Future generations, however, will see their retirement boosted by the expanded Canada Pension Plan, and employers are starting to consider how to integrate the additional benefits and costs into their own rewards programs, Willis Towers Watson noted.
“Any changes employers implement should be consistent with efforts to mitigate the risks inherent in their pension and savings plans, while assisting employees to plan and save for their retirement,” Burnett said.