Two-thirds (66 per cent) of employees are willing to take a job with a lower salary and a pension plan than one with a higher salary and no pension, according to a new survey by the Healthcare of Ontario Pension Plan.
The survey, which polled 1,700 Canadian adults, found while employees close to retirement age were most likely to prioritize a pension over a salary, 50 per cent of workers aged 35 and younger also agreed with this statement.
Among younger survey respondents, 19 per cent said a defined benefit pension plan is the most effective way to save for retirement, followed by a defined contribution plan (14 per cent), a registered retirement savings plan (15 per cent), a tax-free savings account (12 per cent), real estate investments (11 per cent), non-registered investment accounts (six per cent) and cryptocurrency investments (six per cent).
Only half (49 per cent) of respondents said they have any form of workplace pension and among those without a pension, 58 per cent believe it’s unlikely they’ll ever have one. More than two-thirds (70 per cent) of workers without a pension said rising inflation will reduce their ability to save enough money, compared to only 45 per cent of those with a pension. Similarly, two-fifths (38 per cent) of employees without a pension said they’re falling behind financially, compared to just 25 per cent with a pension.
Three-quarters (75 per cent) of respondents believe there’s an emerging retirement crisis, up from 68 per cent in 2021. Eight in 10 (83 per cent) agreed that without good pension plans, many retirees will experience poverty and 82 per cent believe all workers should have access to a pension that guarantees a percentage of their working income in retirement.
The survey also found 77 per cent of employees said employers should be required to contribute in some way toward pensions for all workers, while 76 per cent believe there’s a moral obligation to ensure future generations have access to pensions. Another 77 per cent said employees without pensions will become a burden on the taxpayer and 74 per cent said governments could save money by supporting pensions that are more efficient.
Nearly three-quarters (72 per cent) said saving for retirement is prohibitively expensive, up from 65 per cent in 2021, while 55 per cent said they’re concerned about having enough retirement savings, up from 49 per cent last year. If inflation continues to rise, 33 per cent said they won’t have much money to set aside for retirement and 25 per cent said they won’t be able to save any money.
In addition, 45 per cent of respondents said they’re relying on the sale of a home to set themselves up for retirement, a plan that’s becoming increasingly risky in the current economic environment, noted the report.
Two-fifths (38 per cent) of employees said they haven’t set aside any retirement savings in the last year and, among these respondents, 42 per cent said they’re living paycheque to paycheque. Among workers aged 35 and younger, 35 per cent have never saved for retirement, compared to 30 per cent of workers aged 35 and older.