Morneau Sobeco Income Fund

Morneau Sobeco Income Fund

March 10, 2008 17:38 ET

Morneau Sobeco Income Fund: TFSAs an Election Issue for Many Employers

TORONTO, ONTARIO--(Marketwire - March 10, 2008) - Nearly a quarter of employers polled would consider Tax Free Savings Account (TFSAs) an important campaign issue if a federal election were called before enabling legislation was passed. This is according to the latest Morneau Sobeco 60 Second Survey (TSX:MSI.UN), which received responses from 270 employers. 23% of employer respondents said it would be a major campaign issue, 61% said no, and 16% did not have enough information on TFSAs yet to assess it. The results on this question were fairly uniform across the country.

On the question of whether their organization was likely to set up an employer-sponsored TFSA, 40% of the 193 participants who expressed an opinion said that it was likely or definite. When broken down by region, the most interest was in Ontario and Quebec, and there was less interest in both Atlantic Canada and Western Canada. "The positive interest at this early stage is already very high. We think it is likely that interest in an employer-sponsored TFSA will rise further in the months ahead as more employers become comfortable with the concept and learn how TFSAs can be factored into their organization's overall retirement and savings programs," says Greg Hurst, Morneau Sobeco's National DC Practice Leader.

When asked how they would use a TFSA personally, 45% of the 237 participants with an opinion said they would maximize their RRSP contribution room first before contributing to a TFSA. Only 8% said they would contribute to a TFSA before contributing to an RRSP. The other 47% said they would contribute to both. Hurst noted: "It took a while for the idea of RRSPs to catch on. Judging from the 55% who say they would give TFSAs at least the same priority as RRSPs, it seems that TFSAs will take much less time to become popular. Our early research indicates that TFSAs may be more effective as a retirement saving tool than some people might currently think."

Morneau Sobeco is the largest Canadian-owned pension and benefits consulting and outsourcing firm, providing services to organizations across Canada and in the United States. With over 1,100 employees in offices in 12 cities across North America, Morneau Sobeco has focused on the integrated design and delivery of pension and benefit plans for over 40 years. Morneau Sobeco's Web-based "60 Second Survey" seeks instant input from pension and benefits plan sponsors on high profile issues.

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