Employers and employees have very different views on who bears the responsibility for ensuring employees retire successfully, according to Benefits Canada’s 2016 CAP Member Survey.
The survey found a vast majority (96 per cent) of employer respondents believe it’s their employees’ responsibility to take an active role in their capital accumulation plans to ensure they retire successfully, while just half (50 per cent) of employee respondents believe that, ultimately, their employer is responsible for ensuring they retire with enough funds to live on.
Fortunately, 75 per cent of employers agree their employees are actively involved in their employer-sponsored retirement savings plan. This is up significantly from the 57 per cent that said the same in the 2015 survey.
Read: 2016 CAP Member Survey: Deconstructing how different employees view their retirement
On the other hand, 64 per cent of employee respondents admit they don’t spend as much time on their plan as they should. “It’s not enough to just look at retirement planning,” says Diana Godfrey, vice-president of human resources services at Fidelity Investments Canada and a member of the survey’s advisory board. “As plan sponsors, we need to accept that there is more for us to do in providing assistance. Communication and education is important, but it is just not enough.”
Among employer respondents, 88 per cent said it’s important to their organization that employees retire with adequate retirement income. This figure is down very slightly compared to previous years, from 91 per cent in 2015 and 92 per cent in 2014.
And 80 per cent of respondents believe the financial security of employees who retire from their organization is a reflection of the company, up significantly from 64 per cent of respondents who said the same in 2014.
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According to the survey, another significant majority (97 per cent) of employers believe their organization is responsible for providing employees with tools and resources to help them make sound decisions regarding their employer-sponsored retirement savings plan.
But Jill Kennedy, senior defined contribution and savings consultant at Mercer, says providing too many tools can overwhelm employees. “Today, we’re offering smart defaults and really trying to define what retirement adequacy is about. But we need to challenge ourselves to go to the next level of looking at financial wellness in general,” she says, noting that the key is to make the communications more meaningful to employees.
Roman Kosarenko, director of pension investments at George Weston Ltd., agrees. “We try very hard with communications and advice, but it doesn’t take hold, for some reason,” he says. “It is probably the plan design that has to evolve, and probably with some help from regulators, because plan sponsors, [by] themselves, don’t have enough tools to do that.”
Read more findings from the 2016 CAP Member Survey