Sponsors of DB plans continue to struggle with oversized pension costs, according to Morneau Shepell’s annual compensation survey.
Seventy percent of large organizations offering DB plans say this is their top issue for next year.
In the last couple of years, nearly 50% of these organizations have either elected for funding relief measures made available in various Canadian jurisdictions or adopted plan changes aimed at reducing the employer pension cost.
And 15% of those who have not yet implemented employer cost reduction measures intend to do so next year.
“Such a high level of activity is simply unprecedented,” says the survey.
On the DC side, plan sponsors are concerned about participants’ ability to adequately plan for their retirement.
Sponsors are strongly promoting financial education for plan members, including making available sophisticated decision support tools, and simplifying the suite of investment options available in order to facilitate the plan members decision-making process.
The survey also found that Canadian employers expect salaries to rise by an average of 2.6% in 2014.
This is similar to the increase expected for 2013 and also in line with increases actually granted in 2013. This 2.6% average includes expected salary freezes and excludes promotional or special salary adjustments.
Overall, respondents expect 2014 to be pretty flat in terms of revenue growth, profitability and staffing level.
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