An open dialogue about diversity, equity and inclusion is vital for raising the resilience and overall wealth of pension plan members, said Ryan Weiss, vice-president of group customer national accounts at Canada Life, during a session at Benefits Canada‘s 2022 DC Plan Summit.
Also speaking during the session, Elisha Ribeiro, the insurer’s national sales director of group customer and national accounts, cited a Mercer survey that found women have to work two years longer than their male counterparts to be ready for retirement. And once they overcome that barrier, women also retire with 30 per cent less wealth than their male counterparts.
“That is a significant gap. Pre-pandemic, this was changing for the better. But with the pandemic, many women were forced to either reduce their hours or leave the workforce to provide at-home schooling or care for family members.”
Read: Women retiring two years later, with 30% less wealth, than men: report
In addition, Weiss referred to the government’s 2016 census, which found 33 per cent of white seniors’ incomes came from private pension sources compared to 25 per cent of Indigenous seniors and 21 per cent of racialized seniors. And citing another study by the University of Waterloo, Ribeiro said people who identify as part of the LGBTQ2S+ community felt less certain about retirement and were more likely to plan, while they also had a higher likelihood of seeking out financial advice.
Fortunately, Canadian employers recognize the role they play in positive outcomes for their plan members, she noted, with many implementing multi-year DEI strategies and planning to review their group retirement plans through a DEI lens in the near future.
As well, some plan members may have other financial priorities, said Ribeiro, sharing the example of an employee with disabilities who may need to spend thousands of dollars to make a vehicle wheelchair accessible. “It’s likely that member would be tempted to dip into their [registered retirement savings plan] to pay the bill, but that doesn’t lead to long-term generational wealth. You can offer an alternative such as a tax-free savings account . . . or a non-registered savings plan to help these members keep some of their savings accessible when they need it the most.”
Read: Editorial: DEI more than a buzzword
With people’s basic costs rising significantly due to high inflation, racialized groups have added factors that could compound this problem, said Weiss, suggesting plan sponsors incorporate more financial support programs via their defined contribution pension plans.
“People can’t start thinking about long-term savings [like] retirement . . . if they’re worried about paying their rent for the next month. In fact, I’d humbly submit if they’re worried about paying for rent in the next month, they’re probably bringing additional mental and potentially physical issues into the worksite and, most importantly, not being able to engage and be the most productive people they can be there.”
Ribeiro suggested DC plan sponsors ask whether their communications reflect membership or whether it could be more inclusive. “Including examples in your materials that reflect your member’s incomes is also very important and helps them connect with the plan and understand the plan is created for them.”