New survey results suggest employees are starting to recognize the value of an employer-sponsored pension plan, with more workers saying they’d sacrifice a portion of their pay for a secure pension plan and others saying it’s a top factor to consider before joining an organization.
In Retirement Programs Hold New Appeal for Canadian Workers, a recent retirement attitudes survey from Towers Watson, 53% of DB plan members in their 40s and 71% of members 50 and over said they would be willing to pay a higher amount out of their paycheck each month to ensure they have a guaranteed retirement benefit. Forty-five percent of DC plan members in their 40s and 54% of those 50 and over said the same thing.
“As financial insecurity becomes more widespread, Canadian workers are increasingly interested in a secure rewards package with retirement benefits they can count on” says Ian Markham, retirement innovation leader with the firm. “While Canadians have traditionally looked to employer-sponsored retirement plans as one part of their financial future, the fact that so many workers are willing to trade pay increases or bonuses for enhanced retirement security points to the significant unease that many employees hold towards financial planning for their retirement years.”
Key hiring tool
Almost half (46%) of employees in their 40s with a DB plan said the company’s retirement program was an important reason for them to join the company. Fifty percent of those 50 and over said the same thing. From a retention standpoint, 71% of those with DB plans said the retirement program is an important reason for them to stay with the company.
The results suggest that while DC plans don’t seem to be as important for attraction and retention, many employees in these plans still value them. Of respondents in their 40s with DC plans, 28% said it helped them make the decision to join their current company and 41% said it’s a key factor in staying. Those numbers rise to 33% and 50%, respectively, for employees 50 and over.
“In both good and bad economic times, building and keeping a talented workforce remains a critical business need. The survey findings reinforce the idea that organizations sponsoring DB plans can achieve a more stable workforce than those offering a DC plan,” said Markham. “Understanding worker preferences toward their reward programs creates an opportunity for employers to highlight the value of their retirement plans to current and prospective employees—a potential advantage for any business that places a priority on retaining talent and organizational experience.”