The majority (84 per cent) of organizations in Canada’s non-profit sector said inconsistent revenue or funding is the biggest barrier to offering a pension plan, according to a survey by Common Good Retirement Initiative.
Three-quarters (73 per cent) of survey respondents said offering a plan would be too expensive, 59 per cent said it would be too financially risky, 46 per cent said their organization is too small and 43 per cent said they wouldn’t know which provider to partner with. This challenging environment corresponds with six in ten employers in the sector not offering any retirement benefits at all.
Read: Retirement program for non-profit sector seeking feedback on plan design
As for employees in the sector, many feel dissatisfied with their overall remuneration. While 61 per cent said they don’t feel they’re adequately compensated, close to half (48 per cent) said they’d favour a lower salary with retirement benefits over a higher salary without them.
Smaller employers are the least likely to offer retirement benefits, with only 18 per cent of organizations with 10 or fewer workers doing so. Medium-sized employers, with between 10 and 99 workers are far more likely (52 per cent), with even more doing so at larger workplaces with 100 workers or more (75 per cent).
Read: Savings incentives at 7-Eleven among ways to boost Mexico’s retirement outcomes
Matching contributions in a registered retirement savings plan of an employee’s choice is the most popular option for employers to offer (15 per cent), followed by group RRSPs (14 per cent), defined contribution pension plans (seven per cent) and defined benefit plans (four per cent).
The survey also found that, where plans are offered, they’re usually optional. About half (48 per cent) of respondents said it’s completely up to the employee to choose to opt in, while just 22 per cent offer mandatory plans. As for employees who don’t participate, the main barrier, cited by 50 per cent of respondents, is that organizations can’t offer the benefits to part-time or contract workers.
While employers in the sector face barriers, employees believe retirement benefits should very much be an employer priority (85 per cent), and most (82 per cent) said they’d participate in a retirement plan if their employer offered one.
Read: National retirement program for non-profit sector in the works