TORONTO, ON--(Marketwired - June 23, 2016) - Aon Hewitt, the global talent, retirement and health solutions business of Aon plc (
Aon Hewitt's Hot Topics in Retirement - Canada survey polled employers covering nearly 1.5 million pension plan members, and revealed six key trends in the way employers are addressing the challenge of helping employees achieve their retirement and financial well-being:
- Canada Pension Plan: 87% of respondents prefer an expanded CPP over Ontario Retirement Pension Plan (ORPP) as a better and more efficient vehicle to boost retirement savings for Ontario employees.
- Financial well-being: Almost three-quarters (71%) of employers are likely to create or focus on employees' financial well-being in ways that expand beyond retirement decisions. The top three financial wellness tools employers would like to offer are education on the basics of financial markets, financial planning and healthcare planning.
- Decumulation: 47% of capital accumulation plan (CAP) sponsors are likely to encourage lifetime income, whereby they would support the process of allowing participants to convert account balances to lifetime income. Increased uptakes are expected in the future.
- Income adequacy: 43% of CAP sponsors intend to measure the projected retirement income adequacy of their plans-an 18% increase since 2013. When it comes to all plan sponsors, almost half (49%) say they plan to measure members' income adequacy in retirement.
- Focus on competitiveness and design: 63% of employers said that they are likely to measure the competiveness and design of their retirement program - a 10% increase since 2013.
- Defined benefit plans sponsors are in it for the long haul: 75% of DB plan sponsors are not expecting to make any design changes to their current plans.
"Effective management of risk begins with awareness of the issues and a commitment to understanding them," said William da Silva, Senior Partner and National Retirement Practice Leader, Aon Hewitt. "While this year's survey shows that plan sponsors are concerned, it also demonstrates their commitment to measuring plan effectiveness and retirement outcomes, as well as educating plan members. This is a huge leap forward, and bodes well for the financial security of Canadian pensioners in the future."
"Many respondents have indicated employee financial well-being is top of mind and any changes to the fundamental core of retirement will undoubtedly become important to these same employers," said Deron Waldock, Partner, Legal Practice, Aon Hewitt. "This week's historic federal-provincial finance meeting in Vancouver resulted in an agreement in principle to begin expanding CPP in 2019. Pension plan sponsors will have to carefully assess the impact of CPP expansion -- before it begins in 2019 -- on their overall retirement strategies."
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