Most Canadian employers have yet to take action to prepare for the incoming changes to the Canada Pension Plan and Quebec Pension Plan, according to a survey by Aon.
The survey found just 17 per cent of the 325 organizations polled have started to make plans to accommodate the changes. More than a third (37 per cent) said they expert to start preparations this year and 32 per cent said they don’t know when they will make changes.
“With just months to go before the CPP/QPP changes kick in, it’s a bit surprising to see that so few employers have taken steps to prepare,” said William da Silva, senior partner and retirement practice director for Aon Hewitt, in a press release.
“The reasons aren’t clear, but it appears that many employers might be underestimating the impact these legislated changes could have on their organizations and employees, including contributions and benefits under their current retirement programs.”
Two-thirds (68 per cent) of employers are concerned about the higher organizational costs associated with the enhancements, while 53 per cent are worried about the higher costs for employees and 46 per cent are concerned about the impact on their retirement programs.
While just over half (57 per cent) of respondents said they understand the overall payroll costs resulting from the CPP and QPP enhancements, 69 per cent said they don’t know how they will manage the financial impact. As it stands, just six per cent of employers have communicated about the coming changes to employees, but more than half are planning to do so before the end of the year.
“The good news is, employers still have time to address the new rules proactively,” said Andrew Hamilton, partner and Ontario retirement practice leader for Aon. “Beyond preparing for increased costs – a key concern, according to our survey – they should develop strategies for incorporating the changes into their employee communications, their existing retirement plans and their overall benefits philosophy.”