By Sheryl Smolkin

A pension from the Canada Pension Plan (CPP) is an important foundation on which most Canadians will build their retirement income. Therefore it is important to understand how much you will be entitled to at retirement.[i]

The maximum monthly amount you can receive if you retire at age 65 in 2015 is $1,065. Service Canada reports that in October 2014 the average pension for new beneficiaries was $610.57. That’s because applicants only got a full pension if they contributed the maximum amount up to the Yearly Maximum Pensionable Earnings (YMPE) for at least 40 years between ages 18 and 65.

The YMPE in 2014 was $52,500 and it increased to $53,600 in 2015. Therefore this year the maximum CPP contribution for both employers and employees is $2,479.95. Self-employed people must remit up to $4,959.90. If you earn more than the YMPE you will notice a “salary bump” part way through the year once you have made maximum CPP (and Employment Insurance) contributions.

CPP offers protection against periods where you had reduced or zero earnings for general reasons (up to eight years) or child-rearing  by automatically dropping a number of months of your lowest earnings when calculating your CPP benefit. You can start collecting CPP at age 60 but your annual pension will be reduced by .58% per month prior to age 65 (rising to .6% per month in 2016). If you take an early CPP pension and go back to work, you must continue to pay into the plan until at least age 65. CPP contributions for working Canadians over age 65 are optional until age 70.

When you are already receiving a CPP pension, contributions between ages 60 and 70 increase your benefit by a lifetime Post-Retirement benefit (PRB). The maximum annual PRB you can earn in 2015 is $319.56 and it will be added to your benefit payments in the next year.

CPP uses a Statement of Contributions to keep a record of your pensionable earnings and your contributions to the Plan. The Statement of Contributions can assist you in your retirement planning.

Your statement shows your total CPP contributions for each year and the earnings on which your contributions are based. If you contributed the maximum there will be a letter “M” beside the year. In addition, it provides an estimate of what your pension or benefit would be if you and/or your family were eligible to receive it now.

You can view and print a copy of your Statement of Contributions online. You will need to request a Personal Access code that will be sent to you by mail.

You can also request a hard copy of your statement from:
Contributor Client Services
Canada Pension Plan
Service Canada
PO Box 9750 Postal Station T
Ottawa ON K1G 3Z4

Table 1: CPP Contributions and Benefits

CPP	2014	2015
CONTRIBUTION AND BENEFIT LEVELS
Year’s Maximum Pensionable Earnings	$52,500.00	$53,600.00
Contribution Rate – Employee/Employer	4.95%	4.95%
Maximum Contribution – Employee/Employer	$2,425.50	$2,479.95
Year’s Basic Exemption	$3,500.00	$3,500.00
Pensionable Earnings*	$49,000.00	$50,100.00
RETIREMENT BENEFIT MAXIMUM
Monthly pension on retirement during the year at age 65	$1,038.33	$1,065.00
OTHER BENEFIT MAXIMA
Monthly Survivor’s Benefit
Spouse age < 65	$567.91	$581.13
Spouse age = 65	$623.00	$639.00
CPP Flat Rate Component: Survivor’s Benefit	$178.54	$181.75
Monthly Disability Benefit
Maximum	$1,236.35	$1,264.59
Flat rate component	$457.60	$465.84
Lump Sum Death Benefit	$2,500.00	$2,500.00
Deceased/Disabled Contributor’s Child Benefit	$230.72	$234.87
INDEXATION RATE	0.9%	1.8%

* This figure represents the Year’s Maximum Pensionable earnings minus the Year’s Basic Exemption.

Also read How to Calculate Your CPP Retirement Pension

[i] Disability benefits and survivor benefits are also payable from CPP. See Table above.

By Sheryl Smolkin

This week we picked up a series of interesting blogs from both bloggers who have previously appeared in this space and several who are new to us .

I was particularly interested in Four reasons you should still take CPP early from Jim Yih at Retire Happy. In his example comparing twins, one who takes CPP early and one who waits until age 65, he calculates the “break even age” as 74.4. Keeping in mind that the earlier years of retirement are when retirees spend the most, he thinks that money in hand now is better than money received later in life.

Eric Ravenscraft’s blog on Lifehacker suggests that you treat savings like a tax so you do it. In other words, have your savings taken off at source by your financial institution so you don’t get a chance to spend the money on something else first.

The Froogal Student’s guest blog Setting goals like the wealthy on the Canadian Budget Binder recommends that you set goals, plan ahead, have career goals and anticipate failure in an interview. While life is far too complex to predict, he says adversity hits everyone. The difference between success and failure lies in preparation.

What I Learned About Money from My Wife by Barry Choi on Money We Have is intended to make it easier for people in relationships to talk about money. For example, Barry likes to put every expense on a credit card to get the points. However he respects his wife’s decision to spend cash wherever possible because she says this approach helps her to control her spending.

Finally, on Our Big Fat Wallet, Dan discusses the pros and cons of prenuptial agreements. While anticipating a possible future divorce may take the shine off your sparkling new ring, the fact is the divorce rate in Canada is about 40%, so it doesn’t hurt to think about how you would deal with your financial affairs in advance if the marriage doesn’t last forever after.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information with us on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

By Sheryl Smolkin

If you are turned down for life insurance by one company, the odds of another carrier agreeing to cover you are slim. So it’s important to understand when life insurance coverage may be denied and what options are available if that happens.

When your application reveals you have or had a serious or life-threatening illness such as diabetes, HIV/AIDS, cancer, heart disease or Lou Gehrig’s disease (ALS), the insurer may charge you higher premiums or postpone coverage for specific conditions until you can show the condition has stabilized. Or, the insurer may refuse to cover you.

Insurance broker Chantal Marr of LSM Insurance* says when she thinks one of these circumstances may apply to a client, she first submits a preliminary inquiry on a no-name basis. Based on the insurance company’s response, she may recommend the client apply for a more expensive “simplified issue policy” that may have a less rigorous screening process.

There are other reasons why a life insurer may red-flag your file when you fill out a preliminary questionnaire. Here are some of them:

1. Obesity: For example, life insurance for a six-foot-tall man weighing 320 pounds will probably be declined, particularly if he has other underlying conditions such as high blood pressure or diabetes.
2. Uncontrolled blood pressure: Erratic blood pressure will typically trigger refusal of your application. If your blood pressure is high, but controlled by medication, most insurance companies will underwrite you.
3. Travel: An insurer can decline your application if you plan to travel to a region it views as dangerous or unstable. Your option is to exclude your trip from the policy or start your policy once you are back.
4. Alcohol use: Three or four beers a day will probably bump up your premiums. More than that and coverage will likely be refused, depending on the carrier.
5. Drug use: Use of illegal drugs such as cocaine, crack or heroin is a no-go. Marijuana users will be treated as smokers and pay twice the premiums of non-smoking applicants.
6. Dangerous recreational activities: Are you a rock climber or skydiver? Some providers offer a high-risk insurance policy that includes such activities.
7. Dangerous occupation: People with dangerous jobs such as miners, pilots and members of police bomb squad teams may need to seek coverage from specialized carriers or available workplace group coverage.
8. Careless driving or DUI: Careless driving or driving while impaired by alcohol or drugs can pose a life-threatening situation. Therefore, some insurers will either deny a life insurance application or cancel an existing policy if you have a record of such behaviour.

In some cases, lifestyle changes will improve your insurability. You can get into better physical shape and stop smoking, drinking or taking drugs.

But if your application is likely to be declined for other health-related reasons, you may improve the odds by applying for a simplified issue policy based on a less complex questionnaire and no medical examination.

“Simplified issue insurance is more expensive and has lower maximums,” Marr says. “So if you need $500,000 in life insurance, we may have to cobble together coverage from a number of carriers,”

Guaranteed policies (often referred to as funeral policies) may also be a partial solution. They require no health information whatsoever but coverage is typically limited to small amounts up to $25,000. There may also be a waiting period (usually two years), so if you die within that period, your beneficiaries will only receive a return of premiums.

Application acceptance outcomes for all types of policies can vary across numerous life insurers. As a result, it can help to work with an experienced insurance broker who regularly deals with many life insurance companies and understands their policies and practices.

Also, where you are eligible for group life insurance at work, make sure to apply for the non-evidence maximum benefit available to you, regardless of your health.

—

*LSM Insurance Brokers is located in Markham, Ontario. They have a working relationship with Delorie Jacobs and Gord Martens affiliates with the Sentinel Financial Group headquartered in Saskatoon.

By Sheryl Smolkin

If you max out your SPP contributions each year, you know your money is invested in an easy to understand balanced fund. However, when you top up your savings with contributions to either workplace retirement savings plans or your personal RRSP, it is often challenging to figure out how to invest your money.

On Tangerine Bank’s blog Forward Thinking, Preet Bannerjee suggests Parking your RRSP contributions to beat the deadline. The money just sits there, “parked” inside an RRSP as a low-risk investment until you’re ready to figure it out. Some people may not realize that investments inside an RRSP can be changed later.

In My 2014 (and final) Portfolio Rate of Return Boomer & Echo’s Robb Engen admits his dividend stocks did not match average market returns last year so he finally bit the bullet and sold “his babies,” replacing them with an easy two-fund solution.

With another take on passive investing, Holy Potato released his “Canonical Portfolio,” a simple recipe of four funds or ETFs for your portfolio. He presents a portfolio of four funds (bonds plus three equity classes) with a simple rule-of-thumb to determine the main split.

Sarah Milton specifically addresses the investment dilemma facing people saving in group retirement plans on Retire Happy. She presents 3 Investment options for passive group investors including guaranteed investments, asset allocation funds and target date funds.

And finally, Gail Vaz-Oxlade’s post How Do You Stack Up? refers readers to a tool on the Royal Bank website that measures how you stack up against your region and Canada in general when it comes to your income and net worth. Although it’s nice to get a benchmark of how you’re doing, she says that comparing your results to someone else’s means nothing if you aren’t dealing with similar circumstances.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information with us on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

By Sheryl Smolkin

I like a bargain as much as the next person, but I must confess I have a long way to go when it comes to browsing flyers for competitive prices and making sure I am in the right place at the right time to pay the lowest price for the groceries and household items we use regularly.

I never had the time to carefully peruse every sale supplement that is stuffed into my mailbox and since we cancelled print copies of the newspaper and signed up for the Toronto Star Replica Edition and Globe2Go Digital Replica Edition, I don’t even see most of them regularly.

That’s why I was intrigued by the reference by Squawkfox, one of my favourite bloggers to the Flipp app which allows users to browse the brands they love, clip items straight to their shopping list, and highlight top deals across flyers. The app is available for Apple (The App Store), Android (Google play) and BlackBerry (BlackBerry World) phones and tablets and can be downloaded for free.

I recently added the app to both my BlackBerry and my iPad. I was asked to enter my postal code and to give the app permission to update regularly even when I am not using Flipp. This ensures that the online flyers displayed relate to places in my geographical area where I might typically shop.

Just for fun, I put in the Saskatchewan Pension Plan’s postal code, SOL 1S0. This sent me to a screen with thumbprints of 62 current flyers. In the top right hand corner it noted that the list was updated 26 minutes ago. You can open any flyer to full screen size to see exactly the same pictures and information as in the flyers stuffed in your daily newspaper.

The first thing I noticed was that the majority of the stores were familiar national chains such as Toys ‘R Us, Hudson’s Bay, The Source, Pet Smart and M&M meats. Since SPP is located in Kindersley Saskatchewan, anyone living there would have to drive about 200 km to Saskatoon to take advantage of specials at Hudson’s Bay or Pet Smart, but The Source does have an outlet in Kindersley. Also Hudson’s Bay has online shopping for some sale items.

When it comes to groceries, there is a Walmart, Extra Foods and a Co-op in Kindersley, but again to shop at the Real Canadian Superstore consumers would have to hit the road. And the IGA in Leader, Saskatchewan about an hour away isn’t currently listed at all. But I was able to request that it be added to my list.

In order to create a list of items you want to buy, all you have to do is open a flyer, press on the item which will then be circled in yellow. When you go back to the flyers screen and touch “clippings,” it will send you to a screen where your clippings appear under the name of each store.

You can edit the list by tapping “edit” on the top right hand corner of the screen and then a “trash can” will appear on your clipping and by touching it, the item will disappear. You can even ask to be notified when clippings will expire soon and when you are near a store with specials you have clipped.

Although I originally downloaded Flipp to my BlackBerry, I much prefer using it on the iPad because it has a much bigger screen. However, that means in order to effectively take advantage of the app I would have to carry the iPad around with me most of the time. That’s not really convenient because it doesn’t fit in my purse, it is breakable and it can easily be stolen. Also, I don’t have an iPad data plan, so unless there is free wifi where I shop, I’m out of luck.

Nevertheless, I think Flipp on a smartphone could be very useful for people in larger urban centres where there are a broad range of stores that regularly send out flyers. For example, I put in my Toronto area code and my two favourite grocery stores Longos and Sobeys were listed along with other major chain and specialty stores.

Whether you use Flipp occasionally when you are looking for particular items at a good price or when you make your weekly grocery list, it is an easy to use, practical app. Of course if your perennial favourite is Costco (which is not on the list), you can check their website, sign up for emails or enjoy an old-fashioned stroll around the store munching on free samples while you compare prices.

By Sheryl Smolkin

 

Hi, today I’m kicking off the 2015 SavewithSPP.com expert podcast interview series. I’m delighted that Gail Vaz-Oxlade has made time in her busy schedule to talk us.

Gayle is truly Canada’s money maven. She has worked in the financial services arena for 25 years as a writer, reality-television host, public speaker and corporate spokesperson. Over the last several decades she has published 15 personal finance books, four of which were on the best-seller list at the same time in January 2012.

She has also filmed almost 200 episodes of her television programs, Til Debt Do Us Part, Princess and Money Moron. In addition, she regularly blogs and answers questions from readers on gailvazoxlade.com.

But, what I’d like to talk to her about today is mymoneymychoices.com, an online financial literacy program she founded just over a year ago.

Welcome Gayle.

Hi, thanks for having me.

Q: So Gayle, how do you define financial literacy? How big an issue is lack of financial literacy in this country? 
A: The issue itself is huge because most people already know most of what they need to know but aren’t doing it.

Q: You describe mymoneymychoices.com as Canada’s first comprehensive financial literacy program designed to raise the money IQ of Canadians by drawing on community support, a solid financial roadmap and gamification for reinforcement. How did you come up with the concept?
A: I was actually between television shows. I had a big whack of time off and I read about an organization in the U.S. that that used positive peer pressure in order to change behavior. So I laid out this roadmap of everything you need to do in the order I think you need to do it in, to build a rock solid financial foundation.

Q: What are your goals for the program?
A: Really what I want people to do is stop saying “I don’t know where to start.” If you go to mymoneymychoices.com and register – it’s absolutely free – and you just take the steps as they are given to you in the program, then you will work your way to being financially healthy. I want people to come together in communities and support each other, teach each other and work together in order to increase their community’s financial literacy. 

Q: You say the first level is the hardest. Why?
A: In the first level, which I say has all the heavy lifting; you have to do your six-month spending analysis. You also create a debt repayment plan to get your consumer debt paid off in 3 years or less. You have to build a budget and you do your first net worth statement.  And very often I find that people don’t understand why the pieces are necessary. I say to people all the time, if you do the net worth statement today and it looks really bleak, it’s irrelevant, because it’s not where you are today. It’s how different it will be when you do it in six months for the second time.

Q: Do you have any sponsors or partners? Or, are you solely responsible for the development and maintenance costs of the site?
A: I would love sponsors to support us, but the thing is that, whenever you affiliate with anyone, typically what happens is they then have some say in what you do. And so I bore the costs of the development of the site myself and I set up the My Money My Choices Foundation, where I’m taking donations. In late 2014 I ran an Indiegogo campaign and raised $3,785.

Q: Is My Money My Choices, aimed at any particular age or demographic?
A: No it’s not. The reality is it doesn’t matter if you are 23 or 43. If you’re not aware of where your money is going then that’s the first place you have to start. If you’ve done all those things already you can just pick through those on the program until you get to the level where you are implementing something new for yourself. For example, it might be the level in which you investigate disability insurance and life insurance

Q: Give me briefly how the program works. I see there is a leader board and different prizes and levels.
A: The prizes are really icons. They are what you can use to show the world where you are and how you are progressing through the steps.

Q: What is the community element? From what I read on the website, you can’t do this on your own. You’ve got to be part of a tribe or a team.
A: You can do it on your own because anyone can use the roadmap. However if you are working within a tribe then what happens is you benefit from the support that comes along with that. When you have a whole community cheering you on, or kicking your butt depending on what you need that day, you’re much more likely to get back on the horse if you get bucked off.  That’s part of the purpose of the community.

The other part is that some people within a community are very good at some things and other people are very good at something else. And, when you bring it all together you create cohesion, together with process, together with management skills. When you bring all those things together you make it much stronger than each individual trying to do all the pieces alone.

Q: What role does the watcher play?
A: The watcher is the first guy to do the teaching. Typically the watcher is someone who has some money expertise whether it is official or not. And that person’s job is to help the first few people go through level one, and then guide those same people through the various other levels and encourage them to bring more people into the tribe so that they can become teachers and mentors to their own protégés. Ultimately, the watcher will manage the whole process and say “okay, this is how we’re doing as a community.”

Q: If a group of people want to get together and participate in your game on your website, do they have to have a watcher or does someone become a watcher because they are the first one who gets through the levels?
A: I’ll give you an example. I was invited to speak to a church community in Thornhill a few weeks ago, and I agreed as long as they set up a My Money My Choices tribe as part of the process. A gentleman named Emilio who is well along the way because he’s been following me for years became the watcher for that church community. He set up a Facebook page so people could communicate with each other. He made sure that there were books in the library so that the resources were available if people needed help making a budget or doing a spending analysis. He did all the administrative and support stuff to make sure that as people started coming into the program they didn’t get sidelined by small issues.

Q: That’s really cool. So it’s 23 levels. Can you give me some examples of what participants learn as they progress through the various levels?
A: Sure. The very first level, as I said is the hard one because what’s it’s laying the ground work for everything else. Once you’ve done level one you move on up to the point where you are putting process in place. You’re using a spending journal. You’re posting to your budget every single month. You know where your money is going. As you move up you also start allocating money to savings. You get your debt paid off. Ultimately, the reason there are 23 steps is because I don’t expect people to go from 0 to 100 in 12.2 seconds. It takes time.

Q: So you say you’ve had 8,000 people register on the website. How many of them have progressed through all the levels?
A: Nobody yet.  Because at the last level you are maximizing your RRSP, you have paid off your mortgage, you are maximizing your tax-free savings account, and you’ve got all your consumer debt paid off. This is a process. You are incrementally improving your financial position all the way along in very, very small steps.

Q: There are ways to earn extra points. What do you do with those points? What do they do for you? 
A: This is a very interesting phenomenon. One of the pieces of research shows that the points in and of themselves are what people want. They don’t care what the points translate into. It’s human nature. We like to gather things. We like to accumulate things. We measure our success in points. We like the point system.

Q: What kinds of things do people do to earn extra points?
A: It’s the idea that every time you post to your spending journal or push your spending journal to your cash flow budget you acquire more points. The reward system is based on action. If you are actively participating, you keep accruing points.

Q: Do you have any plans to changing or enhancing the program,?
A: I’m not going to touch the My Money My Choices program as it currently exists. I worked on it for about two years before I actually put it up. I think it covers all the bases. If people send me good resources to supplement it, I will add those resources over time once I have vetted them. But really, I don’t have to reinvent stuff if it’s okay and it’s working. What I want to do is use some of the Indiegogo money to create more of a presence on the internet that helps people find the program.

Q: You always seem to have dozens of projects on the go. Is there anything new and exciting still in the developmental stage you can tell us about?
A: I have a new book coming out in January 2016 called “Money Talks, When to Say Yes and How to Say No.” And that will deal with all the relationship side of money. How do you have those really difficult conversations that people just seem to be avoiding? Whether it is the conversation you have before you get married or the conversation you have with your parents because they keep hitting you up for money and you are dead sure they don’t have a retirement plan. So it’s all about having these difficult conversations and how best to position them.

Q: Thank you so much for taking the time to talk with me today Gayle.
A: Oh, my pleasure.

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You can find out more about mymoneymychoices.com and how to play the game here. All of Gayle’s books are listed here and can be ordered from Indigo or Amazon.

By Sheryl Smolkin

By now we have all taken the leap from the old year to the new, but during the transition, some of our favourite bloggers analyzed the year gone by and offered suggestions for the days and months ahead.

In 2014, Mark Seed at My Own Advisor made some financial predictions. In  2014 Financial Predictions Final Update he revisits these predictions as compared to how things actually played out. He forecasted that the Dow Jones Industrial Average would finish the year at 16,700 but in fact it rose to 17,823.07. He also suggested that the Canadian Dollar would end the year at $0.90 compared to the US Dollar but by December 31^st it had dropped to $0.86. But he did correctly anticipate dividend increases from Fortis, Telus, Walmart and AT&T.

On Boomer and Echo, Robb Engen asks What Will It Take For You To Save More This Year? He suggests the 52-week money saving challenge that was all the rage in 2014. Save $1 in week one, $2 in week two, $3 in week three, and so on until you have about $1,400 saved by the end of the year. Or, increase the degree of difficulty and try to put away $10 in week one, $20 in week two, $30 in week three, and so on until you’ve saved nearly $14,000.

Adam on Modest Money offers 3 Reasons to Start Small with Online Investing. By starting small you can get comfortable with both your broker and the investment tools offered and also decrease your risk.

Retire Happy blogger Sarah Milton proposes boosting your financial fitness by creating a positive relationship with money, making good money management a habit and cutting yourself some slack.

And finally, as part of the Masters of Money series on Get Smarter about Money, Rob Carrick asks Dividend stocks for retirement income – can you handle it? A well-chosen portfolio of dividend stocks can reasonably be expected to give you a far more generous annual cost of living increase than even an indexed pension, while also delivering solid long-term capital gains. But the bottom line is that they are still equities and if the bottom falls out of the stock market it could take your investment portfolio with it.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information with us on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

By Sheryl Smolkin

A recent survey of Canadians revealed that whether or not they currently have a workplace pension plan, the majority would gladly trade off other benefits for any retirement savings plan or a better pension plan at work.

These data were collected by the Conference Board of Canada in a June 2014 comprehensive study into the experiences and perspectives of employers and individual Canadians. Conducted with the support of Aon Hewitt and the National Association of Federal Retirees, the study focused on a variety of issues related to workplace and public retirement savings/pension plans and retirement readiness.

Both employers and individual Canadians across the country were polled. The survey of individuals was completed by a panel of 1,656 Canadians aged 18 and over weighted by gender, region and age.

Who have retirement savings/pension plans?

About 57% of the employed survey respondents indicated they have some form of retirement savings/pension plan such as a Group RRSP, a defined benefit plan or a defined contribution plan at work. Thirty-nine percent said they don’t have a workplace plan and a little over four percent of the total number of respondents “did not know” whether they had one or not.

Respondents in the not-for-profit and private sectors were less likely to report having any form of workplace retirement savings or pension plan, while those working in government were most likely to report having plans. Size of organization and union status were also important predictors of whether or not respondents had a workplace retirement/savings/pension plan.

Indeed, unionized workers were over 1.5 times more likely than those not in a unionized position to have workplace plans. And, more employees of large companies with a staff of over 5,000 reported having a retirement savings plan or a pension plan.

Employees with retirement savings/pension plans 

Who would trade benefits for enhanced pensions?
Forty-three percent of men versus only 28% of women said they would likely trade some aspects of their total rewards for a greater employer contribution to their plan. Also of note, women were roughly three times more likely than men to say they “did not know” whether they would trade or not.

Over 40% of those aged 35–44 and 45–54 said they would likely trade some aspects of their total reward package — while only about 30% of those 65 years of age and over said the same thing. Those 25–34 are about equally divided on this question.

As household income rises, so too does the likelihood that Canadians would consider trading some aspects of their total rewards package for a greater employer contribution to their plans.

Private sector employees are more likely than those in other sectors to indicate that they would trade some aspects of their benefits/rewards for a greater contribution into their plan by their employers. That said, it is of interest that over 30% of those in the government sector would also make a trade for a greater retirement savings contribution .

What benefits would they trade?
Employed survey respondents were asked if given the option, how likely they would be to trade parts of their total rewards package (pay, training, benefits, etc.) to receive greater retirement savings plan/pension plan contributions at work.

A significant minority (37%) indicate it is likely they would make a change. Slightly fewer (33%) say it is unlikely. The remainder are on the fence (i.e., they answered that they are neither likely nor unlikely).

Among those who reported that they would make a trade, or who answered in the “neither” category, anywhere from one-third to one-half would trade a specific item for a greater contribution to their retirement plans.

“Training/learning and development opportunities” was the item most likely to be given up. Nearly 56% indicated that they would make this trade-off. Salary increases were least likely to be considered for a trade.

Table 1: Likelihood of trading specific workplace benefits/rewards for greater employer retirement plan contributions

	Likely
Training/learning and development opportunities	55%
Incentive pay (bonuses etc.)	48%
Vacation days	23%
Certain health benefits	38%
Salary increases	35%

Totals may not add up to 100% due to rounding. SOURCE: THE CONFERENCE BOARD OF CANADA

Employed Canadians without a retirement savings plan

How many are interested in participating in a workplace retirement savings/pension plan? 
Almost 7 in 10 employed respondents currently without a retirement savings/pension plan would be interested in participating in such a plan if it were offered. Only a small proportion of respondents (16%) were not interested in participating. The remainder (16%) noted they don’t know whether or not they’d participate if they were offered the opportunity.

With 109 mentions, DB plans topped the list of desired plans. TFSAs were a close second and DC plans came in third.

Who would trade benefits for pensions?
Almost 4 in 10 survey respondents without a retirement savings/pension plan indicate they would be willing to trade parts of their total rewards package to receive any form of retirement savings/pension plan from their workplace. One-quarter said they would be unlikely to do so, and the remainder (36%) are sitting on the fence — i.e., they indicate that they would be neither likely nor unlikely to make a trade.

Of interest, this subset of survey respondents shares similar preferences as those who currently have a plan and would trade for an increased contribution to their plans (see Table 1 above). Further, the proportion of each group indicating that they would be likely to make a trade on each of the items listed is almost the same.

For those currently without a plan the list of potential trades and the % stating that they’d be likely to trade the benefit/reward is as follows:

Table 2: Likelihood of employees trading specific workplace benefits/rewards for participation in a retirement savings/pension plan

	Likely
Training/learning and development opportunities	56%
Incentive pay (bonuses etc.)	47%
Vacation days	42%
Certain health benefits	38%
Salary increases	31%

Totals may not add up to 100% due to rounding SOURCE: THE CONFERENCE BOARD OF CANADA

What this means

One facet of the current study explored the role of retirement savings/pension plans in attracting and retaining employees. Without fail, survey respondents said the top three items that attracted them to their current employer/workplace and those that keep them there are:

• The work environment.
• The type of work done.
• Work-life balance.

While 65% of those currently employed cite the organization’s retirement savings/pension plan as being important or very important to their attraction, it only ranked 9th out of 12 potential items.

However, these plans moved up in importance as a tool for retention. In fact, 69% of respondents rate retirement savings/pension plans as important/very important—and with this increase, the relative ranking of these plans  moved from 9th place as an attractor to 6th place out of 12 as a means to retain staff.

This suggests that while employees may not be as concerned about the nature of retirement savings/pension plans or even if one is available when they are first hired, it’s one of the factors they consider later on when a recruiter or another company come knocking.