SPP: one of Canada’s largest multi-employer DC pension plans

Writing in Benefits Canada, Jennifer Paterson remarks on how the Saskatchewan Pension Plan has become one of Canada’s largest multi-employer pension plans.

She notes that defined contribution (DC) pension plans, such as SPP, have been evolving over the years.

“When my parents began their working lives in the early 1970s, they both had defined benefit (DB) plans, though the outcome for each was quite different. Since my mom retired, she’s been drawing down an income from the Ontario Teachers’ Pension Plan, while my dad spent the first decade of his retirement fighting for his pension after his employer Nortel Networks Corp. entered insolvency,” she explains.

(The difference between a DC plan and a DB plan is basically what’s defined. With DC, the contributions going into the plan are usually pre-determined, a set percentage of your pay sometimes matched by the employer. With DB, the pension coming out of the plan is what’s defined – contributions made by your and your employer can vary in order to deliver the “defined” benefit.)

Paterson writes that DB plans are “few and far between” in the private sector these days. Apart from a brief time belonging to a DB plan, she has “spent my career saving into either a DC plan or a group registered retirement savings plan.”

As boomers with DB plans retire, writes Paterson, “membership in Canada will continue to shift” to DC. “DC plan account balances are growing and the industry has to figure out how to improve both the accumulation and decumulation phases to meet this reality,” she explains.

While large public sector pension plans – she mentions the Healthcare of Ontario Pension Plan – tend to be “multi-employer” pension plans (MEPPs), meaning you can change jobs among participating employers and still keep the same pension plan, it’s rarer to see that in the DC sector, writes Paterson. “DC plans have traditionally been single-employer plans,” she continues.

But there is a DC plan that is also multi-employer, Paterson writes – the SPP.

“Consider MEPPs’ various benefits: economy of scale, pooled assets, reduced costs and shared risks. These benefits drew me to one of Canada’s largest MEPPs, the Saskatchewan Pension Plan, which is No. 21 in the 2023 Top DC Plans Report,” she writes.

Even if you change jobs, you don’t have to stop contributing to SPP – it travels with you as you move through your career.

“Since I knew it was unlikely I’d ever have the security of a public sector DB plan, I opted for the next best thing when I started building my family a couple of years ago. Through my workplace, I only have a group RRSP with a very low employer match, so I looked into saving in the SPP, which had recently expanded beyond Saskatchewan to open up to all Canadians,” she continues.

“Since I typically prefer to have some level of control over my finances, I’m still a bit surprised how comfortable I am as an SPP member, where I’ve set my investment choices, picked a monthly contribution that comes straight out of my bank account and basically stepped away. But there are many unknowns in the world and so much to manage, I appreciate that the SPP team takes the reins and I trust the work they’ve put into their investment options,” writes Paterson.

In addition to letting SPP handle the investment side, Paterson likes the options the plan offers on the trickier “decumulation” side, where retirement savings are converted into retirement income.

“The SPP’s focus on decumulation was another big reason I joined. For years now, I’ve been hearing about the Canadian pension industry’s very slow approach to solving this problem — and also saw how the SPP has been leading the way,” she writes.

“When I eventually retire, I want the comfort of keeping my savings in the same plan and the same investments, benefiting from the same pooling and risk-sharing I did in the accumulation phase. I’m not interested in the isolation and exorbitant fees of the retail environment — and I don’t think anyone near retirement who knows anything about finances should be comfortable with that transition,” writes Paterson.

She notes that members can now transfer all of their other savings – “my group RRSP, for example” – into SPP when they retire, in order to have all their assets in one account.

“Since I joined the SPP, I’ve been an advocate, promoting plan membership to all of my friends who either don’t have a workplace plan or have an inferior one like I do,” she concludes.

We can add one personal bit of SPP information – the “decumulation” options also include a lifetime monthly annuity pension that you can get within the plan. Here at our house, one of us is already receiving an SPP annuity, and we will both be doing so once this writer hits the big 6-5.

Great news! SPP’s flexible Variable Benefit option is no longer limited to those members living within the borders of Saskatchewan. Now all retiring SPP members across the country can take advantage of this provision, which puts you in control of how much income you want to withdraw, and when you want to withdraw it. You can also transfer in additional savings from other unlocked registered sources. For full details see SaskPension.com.

Check out SPP today!

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SPP’s Shannan Corey — “we get to impact individual members’ lives”

Recently, Shannan Corey, the Saskatchewan Pension Plan’s Executive Director, was interviewed by Benefits Canada magazine.

The article speaks to Shannan’s back story — her father was an actuary, the magazine reports, and “after earning her mathematics degree at the University of Saskatchewan, she became an associate actuary, spending a few years in consulting with a focus on pensions,” the article continues.

“What resonated with me from a young age was how you got to impact people’s lives. I saw the impact on individuals and on employers being able to [improve recruitment and retention] by offering a pension and it just felt like a strong connection for me,” Shannan tells Benefits Canada.

After her time as a consultant, Shannan “spent some time working in total rewards in the private sector,” the article notes. She later became a chartered professional in HR, the magazine reports, before a move to the public sector, the article adds — and in 2021 she joined SPP as its Executive Director.

“I feel like I’ve gotten to see many different avenues and I keep gravitating back towards that member perspective. So that’s why I ended up with the Saskatchewan Pension Plan. We get to impact individual members’ lives, not just in Saskatchewan, but for anyone across Canada who can join our plan. That really resonates with my personal value system,” Shannan states in the article.

Her role at SPP involves “overseeing the entire pension program, facilitating digital transformation and keeping the operations teams running,” Benefits Canada reports.

“The SPP is very regulated so there’s a lot of compliance. There’s no other plan like ours in the world, as far as I know, so we have a very unique and complicated governance structure. We spend a lot of time on governance regulations. Thinking about changing our products requires a lengthy foundation setting with the regulators in order to move towards changes. So that’s a big part of what I do,” she states in the Benefits Canada article.

Another key duty for Shannan, the magazine continues, is overseeing “business development and marketing, which is unique department to the SPP because it’s a voluntary plan and it actively recruits members,” the article notes.

Our former Executive Director Katherine Strutt is also quoted in the article.

“I noticed right away Shannan was a quick study, so that allowed her to do what she needed to take over in the brief timeframe,” says Katherine. “She’s very qualified and brings a wealth of experience to the position. And I’m grateful the board chose such a qualified individual to take over the SPP,” states Katherine, who was with SPP since 1990 before retiring a couple of years ago.

The article remarks on the fact that we are seeing more women in leading roles in the pension industry these days than in the “male-dominated” past.

“It certainly wasn’t a traditional field for women when I started out. I was fortunate to have great mentors and I think that’s key. Switch to today, the SPP has a primarily female workforce. I think it’s a great privilege and an important responsibility for me to hopefully continue with mentoring women and all the staff here,” Shannan tells Benefits Canada.

SPP has been helping Canadians save for retirement for more than 35 years. As the article notes, SPP is a voluntary plan — any Canadian with unused registered retirement savings plan room can choose to become a member. And once you do, SPP becomes a do-it-yourself retirement program, offering professional, pooled investing at a very low cost. At retirement, SPP will help turn your savings into income — including the possibility of a lifetime monthly annuity payment. Check out SPP today!

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98 per cent of workers say employers should offer a workplace pension

It’s unanimous! Or about as close as you can get to that.

An impressive 98 per cent of U.S. workers polled by Vestwell, Inc. say “it’s important for their employer to provide a retirement savings plan,” reports Benefits Canada.

The survey also found that “nearly half (47 per cent) of workers listed retirement as their number one savings goal,” the magazine reports, adding that paying off debt was seen as the top priority by 34 per cent of respondents.

There were some other interesting survey findings, Benefits Canada adds.

“While two-fifths (40 per cent) of employees said a higher salary would encourage them to contribute to a workplace retirement plan, others cited a higher employer-matching contribution (28 per cent), better financial education (eight per cent) and paying off personal debt (six per cent) as motivating factors. Just 12 per cent said nothing would motivate them and six per cent cited other motivations,” the magazine reports.

The vast majority of respondents (91 per cent) wanted employers to offer a program that offered “a guaranteed lifetime income stream, such as a deferred annuity.” Only 40 per cent of employers wanted their retirement programs to deliver guaranteed income.

It would seem that saving on their own is seen as difficult by American workers. Seventy-six per cent of those surveyed “reported some level of stress regarding their financial situation, including two-thirds (66 per cent) who agreed that inflation and market volatility has increased their previous levels of financial stress,” Benefits Canada reports.

Despite this, 48 per cent of employees agree they should be saving more.

Finally, 90 per cent of employees wanted their employers to deliver some sort of “retirement education,” and more than half (59 per cent) “agreed or strongly agreed that companies should have responded to the `Great Resignation’ with a more hands-on approach to providing retirement information,” the article notes.

It is very encouraging to see a survey report that retirement saving is seen as a top priority, and that employers should offer some sort of retirement savings program. This seems to us like a cry for help from workers on the whole retirement savings issue; it may be too daunting and complex for people to save on their own.

It’s also interesting that most respondents want some sort of guarantee around the income they get from their workplace retirement savings program. If your workplace retirement savings program doesn’t offer guaranteed income on retirement, but a lump sum, you can achieve a guaranteed income stream through the purchase of an annuity with some or all of the savings.

If you don’t have a workplace retirement savings program, the Saskatchewan Pension Plan may be able to provide some help. You can join SPP as an individual — the plan is open to any Canadian with registered retirement savings plan room. SPP will invest your savings at a low cost in a professionally managed, pooled fund, and at retirement your income options include choosing from a stable of lifetime annuities.

Alternatively, your employer can choose to offer SPP as a retirement benefit. If there’s interest at your organization, here’s where you can find out more details.

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There have been reports from around the world about The Great Resignation – how the stress and strain of working through the pandemic crisis has prompted many to opt out of the workforce altogether.

In Canada, reports The Globe and Mail, the primary way that Canucks are leaving the workforce is via retirement.

“Last week’s July employment report from Statistics Canada revealed that a record 300,000 Canadians have retired over the past 12 months,” writes columnist David Parkinson. “That’s up nearly 30 per cent from the same time last year, and nearly 15 per cent from the months leading up to the pandemic in early 2020,” he continues.

One might think that older workers leaving the workforce – boomers and near-boomers finally giving back their ID badge and parking pass – might be good news for younger workers.

However, the Globe continues, there may also be a downside to this “retirement frenzy.” The article quotes economist Stephen Brown as saying “the sharp increase in retirees this year presents downside risks to our forecasts for employment, and with gross domestic product (GDP) growth already faltering, further raises the probability that economic activity will contract.”

The article links today’s record-low unemployment rate with a less-good stat, a falling job participation rate. In plainer terms, less joblessness, yes, but overall, less people working. “All this poses downside risks for GDP, particularly if retirements increase any further,” notes Brown in the article.

A clearer example of The Great Resignation’s impacts can be gleaned from an article in Manitoba’s Thompson Citizen. In Northern Manitoba, the article reports, recruitment bonuses of up to $6,750 – bonuses that continue on after hire – are being offered to try and get nursing positions filled in remote First Nations’ facilities. A lack of healthcare staffing has sparked a crisis in the area, the newspaper reports.

In Northern Ontario, the CBC reports, the mining and supply industry is also seeing “a shrinking and aging labour force,” and a “scramble” to fill open jobs.

“You’re going to see businesses closing because they can’t find enough people. And then it could also be putting more pressure on the people that are currently working,” Reggie Calverson of the Sudbury Manitoulin Workforce Planning Board tells the CBC.

There, technology is being deployed to automate some jobs – more AI, more robots, self-checkouts and virtual customer service, the CBC report notes.

And the younger workers left behind as their older colleagues “resign” or retire are indeed finding it a strain to pick up the slack, reports Time magazine via Yahoo!.

Many, the magazine reports, are “quiet quitting,” which is “the concept of no longer going above and beyond, and instead doing what their job description requires of them and only that.”

Employers in the U.S. and elsewhere fear that while “quiet quitters” will avoid job burnout by leaving at quitting time and not dealing with after-hours emails and meetings, overall productivity could be impacted at a time when there are fewer workers in the job pool.

How to incent workers who feel “unengaged?” A Globe and Mail piece by Jared Lindzon suggests more bonus pay, such as commissions, or even retirement-related incentives.

Many employers are considering offering matching contributions to their company’s retirement program, or setting up new programs, the article says.

It’s interesting to read that for some experts, a wave of retirements is negative for the economy. Canadian research from a few years ago suggests that retired workers do give the economy a boost via their pensions, which they tend to spend on goods and services and taxes.

A study last year carried out for the Canadian Public Pension Plan Leadership Council (CPPLC) by the Canadian Centre for Economic Analysis found that “every $10 of pension payments generates $16.70 of economic activity and makes a total contribution of $82 billion to Canada’s economy annually,” reports Benefits Canada.

OK, a lot going on here. People are retiring in droves, particularly those aged 55 to 65. It’s harder to fill jobs. Those in jobs are feeling overburdened, perhaps thanks to the fact that older colleagues have left and have not been replaced. While some fear this Great Resignation will negatively impact the economy, others who feel retirees are already helping out the economy may see this as more good news.

So let’s look at retirement savings in a new way. What can you, as an individual, do to help the Canadian economy in the future? Why, you can save for retirement and then, when you are there, spend your income on goods and services, while paying your taxes. That helps your local economy and your local and federal governments.

If you are in a workplace pension plan, you are on the right path. But if not – or you want to augment the plan you have – consider the Saskatchewan Pension Plan. Consider joining the 400 businesses offering SPP and its 32,000 members whose retirement savings now represent an impressive $600 million.

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Canadians cutting back on retirement saving due to the pandemic?

There’s no question that the pandemic, now into its second year, is wreaking havoc on most people’s financial plans.

A report from Benefits Canada, citing research from Ipsos, found that “one quarter of Canadian employees say they’ve needed to cut back or stop contributions to their savings and retirement plans.”

One in 10 of the survey’s respondents say “they have reduced or frozen contributions to their retirement savings,” and 13 per cent “have cut back or stopped” savings for non-retirement purposes, such as vacations, clothing, household items, and “rainy day” savings.

While 70 per cent say they are “confident” about their financial management during what the article calls “tumultuous times,” 59 per cent “are worried about the effect of the pandemic on their savings and retirement plans.” Younger Canadians, the magazine reports, are even more worried – that’s 73 per cent of Gen-Zers and 67 per cent of millennials. Fifty-two per cent of boomers share their worries.

It would be interesting to ask this same group a little more about what their savings plan is, assuming they have one. While those with a workplace pension do have a sort of built-in retirement savings plan – as long as they are working – do those who don’t have some sort of savings budget or automated plan?

An article in USA Today stresses the importance of this kind of planning.

“One of the common misconceptions about achieving financial success is that it requires complexity, sophistication and intricate effort. Sure, you might want to construct a detailed analysis of investment allocations, debt-payback schedules or whatever, but you probably don’t need to,” the article explains.

“Sometimes, just a handful of straightforward guidelines, consistently followed, can do the trick,” USA Today reports.

Citing U.S. research, the story notes that a simple rule of thumb for saving is “save as much as you can,” and to separate saving from spending. You should, the article says, try to set aside between 10 to 30 per cent of your monthly earnings as savings.

(Our late Uncle Joe always said 10 per cent was his rule of thumb – put that away as soon as you get paid, and live off the other 90 per cent.)

That sort of advice is echoed in another of the findings from the research – the need to “pay yourself first.” The article picks up on this theme. “Learn to set aside money as soon as you get paid,” we are advised.

Let’s put it all together. Most of us are worried we’re not saving enough for retirement. But unanswered is the question, are most of us making savings easy through automation and paying ourselves first? The idea of setting aside a percentage of your earnings for savings, and then spending the rest, works even if your earnings are reduced. If 10 per cent is too much, try five per cent, or even 2.5 per cent. You can always ramp it back up again later.

If you don’t have a pension program at work, then you are the person your future self will rely on to set aside retirement savings while you are working. This sounds daunting, but doesn’t need to be. The Saskatchewan Pension Plan allows you to contribute in a number of ways, including pre-authorized payments from your bank account. That way, you are paying your future self first! Check out SPP, celebrating its 35^th anniversary in 2021, today!

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Pandemic’s a worry for Canadians, and impacting their ability to save: survey

New research from CIBC and Maru/Blue finds that 40 per cent of Canucks are worried about how the pandemic will affect “their retirement and savings plans,” reports Wealth Professional.

Also alarming – 23 per cent of those surveyed have “been unable to contribute to their retirement plans since the pandemic began,” the magazine reports.

There are also subtle additional ways the pandemic may impact future retirements, Wealth Professional notes, again citing the survey’s findings. Thirty per cent of Canadians surveyed believe they will have to work longer than they originally had planned, and 32 per cent don’t think they’ll do as much travelling in retirement as they had hoped, the magazine reports.

This level of pessimism around retirement has not been seen since 2014, the article adds.

Other learnings from the pandemic include:

• 20 per cent say they are paying more attention to their personal finances
• 21 per cent say they “won’t panic when markets become volatile”
• 19 per cent agree it is “important to save for retirement/their future”
• 26 per cent feel the pandemic has “significantly increased the cost of retiring”
• 24 per cent now feel they can live with less and will reduce discretionary spending

The amount needed for a comfortable retirement is, according to Wealth Professional, “10.9 times their final pay to maintain the same spendable income after retirement.” The magazine cites findings from actuarial firm Aon for this figure.

These figures are certainly not surprising. Many Canadians have had their income slashed, are receiving benefits, and have deferred repayment of mortgages as we all try to tough out the pandemic.

It’s encouraging that nearly 20 per cent of us – despite being downtrodden by the pandemic – still see the value of setting aside whatever they can today to benefit themselves in the future.

Another part of the equation, of course, is living on the retirement savings – the so-called decumulation side, where all the money you’ve piled up is turned into what you live on in retirement.

According to Benefits Canada, Canadians need to think about how to make their retirement income last.

“We’ve had a number of tax rules and pension rules based on the age of 65 and that made a lot of sense years ago, but the issue is now, once you hit 65, you can live to 87 or even longer,” states economist Jack Mintz of the University of Calgary in the article.

“I think we need to allow people to put more money in tax-sheltered savings. I would like to see an increase in pension limits and [tax-free savings account] limits in order to help people save more for the future. I’d also like to see more rules around [registered retirement income funds], when you have to withdraw money out of your retirement accounts… to provide more flexibility,” Mintz states in the article.

These are solid ideas for making retirement savings last longer, and for helping Canadians accumulate even more savings than they have at present. If you are looking for a place to stash cash for your retirement future – a place where your savings will be professionally invested at a very low rate – look no further than the Saskatchewan Pension Plan (SPP). The SPP has an impressive rate of return of nearly eight per cent since its launch nearly 35 years ago. And if money is tight today, you can start small and gear up when better times return. Take the time to click over and check them out.

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The pension industry has a big footprint.

With the top 300 pension funds around the world managing an eye-popping $19.5 trillion (U.S.) in assets – and with quite a few of those funds being Canadian-based – Save with SPP decided to take a look around to see what our own country’s pension leaders are saying about investment markets.

With $409.6 billion in assets, the Canada Pension Plan Investment Board (CPPIB) is the nation’s largest pension fund. CPPIB has identified four sectors of the economy it thinks will grow in the near future – e-commerce, healthcare, logistics (aka shipping/receiving) and urban infrastructure.

CPPIB expects “massive changes” in those areas, CPPIB’s Leon Pederson tells Tech Crunch. And while CPPIB invests for the long-term, the four areas identified by their research might “indicate where the firm sees certain industries going, but it’s also a sign of where CPPIB might commit some investment capital,” the magazine reports.

The $205-billion Ontario Teachers’ Pension Plan (OTPP) saw small losses in the first half of 2020, reports Bloomberg.

“Some of our hardest hit investments were among our private assets. Heavily-impacted segments were leisure and travel, including our five airports, and assets where consumer spending declined, which is our shopping malls and Cadillac Fairview,” OTPP’s CEO, Jo Taylor, states in the article.

However, losses were cushioned by the plan’s strong fixed-income returns, the article notes – in all, $7.9 million in income from its bond portfolio helped OTPP limit losses.

The $94.1 billion Healthcare of Ontario Pension Plan’s (HOPP) CEO, Jeff Wendling, recently told Benefits Canada that the plan is considering looking at some new investment categories as it pursues its “liability driven investing” strategy. With a liability driven investing strategy, the investment target is not beating stock market indexes, but ensuring there is always enough money to cover every current and future dollar owed to pensioners.

“We’re very focused on liabilities, but what you do when interest rates are at really extreme lows, in our view, is different than what we did in the past,” he states in the article. HOOPP, he adds, is now looking at infrastructure investing, insurance-linked securities, and increased equity exposure to generate income traditionally provided by bonds.

Large pension plans like CPPIB, OTPP and HOOPP have enjoyed a lot of success over the years. The takeaway for the average investor is that the large scale of these plans allow them to do things the average person can’t – like directly owning businesses (private equity), or shopping centres and offices (real estate) in addition to traditional stock and fixed-income investments. The big guys are taking advantage of diversification in their holdings, and so perhaps should we all.

Individuals and workplaces can leverage the investment expertise of the Saskatchewan Pension Plan. Its Balanced Fund is invested in Canadian, U.S. and international equities, bonds, mortgages, and real estate, infrastructure and short-term investments. And the fund has averaged an eight* per cent rate of return since its inception in the mid-1980s. Check them out today.

*Past performance does not guarantee future results.

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Canucks doing better than we think at retirement saving: report

It’s somewhat rare to see a headline saying Canadians are on track for retirement saving, but that’s the key point of new research from HEC Montreal’s Retirement and Savings Institute.

The study, funded by the Global Risk Institute, was featured in a recent Benefits Canada article.

The positive news – “more than 80 per cent of Canadians aged 25 to 64 are prepared for retirement and the vast majority have a high probability of being prepared,” the magazine notes.

According to the research, which was conducted featuring a large sample of more than 17,000 Canadians, those who are the best prepared are those whose household earnings are below the national median, and “those covered by pension plans,” Benefits Canada notes.

Those who are in the worst shape – somewhat surprisingly – are “upper-middle earners without retirement savings,” the magazine reports, adding that CPP and QPP improvements may benefit that segment of the population down the road.

The authors of the study used what they called a “new stochastic retirement income calculator,” which unlike many calculators, models “the evolution of private savings, accounting for individual and aggregate risk; taxation of savings, including capital gains; employer pensions; a realistic stochastic modelling of work income; the value of housing; and debt dynamics.”

So for those, like us, who got lost at “stochastic,” it seems that this calculation takes into account risk, taxation, future work income, housing prices and levels of debt when calculating what one actually needs to maintain the same standard of living in the life after work.

That calculation showed that on average, participants would have 104.6 per cent of the net income they need, once they are retired, to maintain their pre-retirement living costs.

We can share a personal experience here. When the head of our household decided to get an estimate of what her pension from work would be, she was at first a little dismayed to see that the gross annual pension income – despite 35 years of membership in her workplace plan – was lower than what she was making at work. But when she looked at the net, after-tax income, or take-home pay, it was actually higher. It’s because she’s paying less income tax, no longer making pension contributions, and no longer paying into CPP and EI. That all makes a big difference on the bottom line.

So, the authors of the study conclude, “on average, if (Canadians) retire at the age they intend to, maintain their saving and debt payment strategies and convert all of their financial wealth into income, Canadians have net income in retirement which is higher than their pre-retirement income.”

The reason for the high numbers may be that for those making at or below the median income  “are well covered by the public system even if they have no savings or [registered pension plan] coverage,” the authors of the report state in the Benefits Canada piece. It’s those with income above the median and who also lack workplace pensions – about 15 per cent of Canadians – who need to worry, the article concludes.

If you don’t have a retirement program through work, and don’t really want to take on saving and investing on your own, an excellent option is the Saskatchewan Pension Plan. The plan will invest your contributions at a very low investment cost, thanks to the fact the SPP is not operated on a “for profit” basis. Since its inception in the late 1980s the SPP has grown the savings of its members at an average annual rate of eight per cent. And when the time come for you to convert those savings into a lifetime income, the SPP has flexible annuity options to turn your hard-saved dollars into a lifetime income stream.

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New research from the World Economic Forum, reported by Corporate Advisor, suggests the “savings gap” between what we should set aside for retirement, and what we actually have, is on track for monumental growth.

“Globally, experts are concerned many people could be sleepwalking into retirement poverty. The World Economic Forum (WEF) highlighted that the gap between what people save and what is needed for an adequate standard of living in retirement will create a financial black hole for younger generations,” the Advisor’s Emma Simon reports.

The WEF looked at the some of the world’s largest pension markets, including Canada, the U.K., Australia, the U.S., the Netherlands, China, India and Japan, and concluded “the gap” could reach a staggering $400 trillion U.S. in 30 years.

But, the article says, there is still time to do something to avert a crisis.

“With ageing populations putting increasing pressure on global pension and retirement plans, employees, employers and governments need to take more responsibility and act to prioritise pensions and savings,” Simon explains.

Countries around the world have done some interesting things to boost retirement savings.

In the U.K., the article notes, “automatic enrolment” was rolled out in 2012. This means that new employees are automatically signed up for their workplace pension plan, with an option to opt out. Thanks to this, there are 10 million more pension plan members in the U.K., although there are concerns about 9.3 million who aren’t in plans because they were too old for auto-enrolment, the article explains.

In Australia, the Superannuation fund system was made mandatory “in 1992 for all employees older than 17 and younger than 70 earning more than $450 (AUD) a month.” So this means everyone is saving on their own – but with the current maximum contribution of 9.5 per cent (soon to rise to 12 per cent), there are questions as to whether they are saving enough.

A Benefits Canada article from a couple of years ago raised the same question – are Canadians saving enough for retirement on their own? While Canadians had accumulated an impressive-sounding $40.4 billion in RRSPs as of 2016, the article notes that the median contribution annually was just $3,000.

As of 2018, reports the Boomer & Echo blog, the average Canadian RRSP was an impressive sounding $101,155. But if someone handed you $100 grand and then said “live off this for 30 years in retirement,” it wouldn’t sound quite so great.

There’s no question that saving needs to be encourage in Canada and around the world. The Canada Pension Plan and Old Age Security both provide a pretty modest benefit, and most of us don’t have a workplace pension. So steps should be taken to encourage more access to pensions, to look at increases to government benefits, and to encourage more saving.

If you don’t have a workplace pension plan, the Saskatchewan Pension Plan may be just what you’re looking for. The SPP is a defined contribution plan. You can contribute up to $6,300 a year, and your contributions are carefully invested at a very low fee. When the day comes that work is no longer a priority, the money you’ve accumulated through growth and ongoing contributions can be converted to a lifetime pension. Check them out today.

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60 per cent of pension plan members report barriers to retirement saving

New research from Benefits Canada magazine shows that even folks who are in retirement plans say they’re finding barriers to saving – all thanks to the impacts from the pandemic.

The magazine’s annual CAP (capital accumulation plan) Member Survey was carried during the start of the crisis, from March 30 to April 1.

A capital accumulation plan is any type of savings vehicle where members put in money – sometimes matched by the employer – over their working lives. At the end of work, the total amount saved for retirement is then either paid out to them via an annuity, drawn down from a special locked-in RRIF, or a combination of both.

The folks at Benefits Canada asked people in these types of plans how the pandemic was affecting their spending and saving habits.

The research found that Canadians “are continuing to juggle their financial priorities. More than half (54 per cent) of CAP members are prioritizing day-to-day expenses, followed by paying the mortgage or rent (47 per cent), paying off personal debt (38 per cent), enhancing personal savings (34 per cent) and saving for retirement (28 per cent),” the magazine reports.

A fairly low number of respondents – 41 per cent – “described their current financial situation as excellent or very good,” the magazine notes. A further 40 per cent said their finances were “adequate,” but 19 per cent said things were “somewhat poor or very poor.” A whopping 60 per cent said “they’re unable to save as much as they’d like for retirement due to other financial debts, such as credit cards or student loans,” Benefits Canada reports.

Debt is definitely a barrier to saving, the magazine reports. “I think the big thing we need to start to get across to workers, savers, Canadians . . . is that having too much credit card debt is the opposite side of insufficient retirement savings,” Joe Nunes, executive chairman of Actuarial Solutions Inc., states in the article. “It comes from too much spending. We have to get better at educating people that they need to keep the spending in check to get the savings in order.”

The problem, however, is that the pandemic is making Canadian household debt even worse.

“You don’t need to be a psychic to predict that over the next weeks and months, the country will see an increase in personal bankruptcies, while household debt is going to soar,” reports Maclean’s magazine. “Well before COVID-19, there was growing concern over the country’s personal finances, with debt-to-income ratios topping 176 per cent in the third quarter of 2019, which means for that every dollar of income we earn we owe $1.76.”

With so many people off work and receiving CERB benefits, which may equal only about half of what they were making at work, credit cards and lines of credit will feel the strain, the magazine predicts.

Let’s face it – at a time when just staying healthy and avoiding COVID-19 is the new national priority, followed by keeping a roof overhead and food in the fridge, retirement saving is going to get bumped to the bottom of most people’s to-do lists.

But remember that with some capital accumulation plans, like your RRSP or your Saskatchewan Pension Plan account, you can reduce your contributions and put in what you can. If you can’t chip in what you did last year, put in less. Any contribution, however small today, will benefit you in the future, thanks to the professional investment growth it will receive over the years. You can ramp things up again when better times return.

Written by Martin Biefer
	Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing, classic rock, and darts. You can follow him on Twitter – his handle is @AveryKerr22