What if there never is a retirement party?

A new study from the U.K. suggests – that for an estimated one million Brits – there will be no life after work.

The study, carried out by Canada Life, is covered in a recent article in Professional Advisor. The article notes that 17.1 million Brits plan to work beyond the normal state pension age.

Why the focus on working well into retirement age?

The article says 43 per cent of those planning to work longer “consider their pension to be inadequate to retire fully.” A further 22 per cent, Professional Advisor continues, are concerned “about how long their retirement savings will last,” and 10 per cent fear that unless they continue working, they won’t be able to afford their current lifestyle.

And it’s not like people are eager to work into their late 60s and beyond, the article reports.

Thirty-four per cent of those surveyed feared a longer career at work because they are “concerned about being unable to enjoy their older age,” the article notes. Thirty-three per cent worry that working longer will “take a toll on their health,” and 27 per cent said that even though they want to work longer, “deteriorating health” will make it harder to do so.

“Digging beneath the surface, there are a variety of reasons for working beyond state pension age, or not retiring at all,” states Andrew Tully of Canada Life in the Professional Advisor article. “For some people the social side of work would be missed, but for others, financial considerations are a key driver. As an industry, we need to find ways of encouraging better engagement in long-term financial planning as a way to ensure that people are confident that they are building sufficient savings for retirement,” he states in the article.

Tully also says that the pandemic is having a big impact on people nearing retirement age. Many are “re-evaluating how they want to live and what they want to in later life.”

This article raises some important questions. Clearly, those who – as the article suggests – feel they don’t have a good enough pension, or that they will outlive their savings, don’t have much of a choice about whether to keep working. But, as the article notes, age can catch up to you and can begin to limit how much work you can take on. This would seem to be particularly true for those of us in physically demanding lines of work.

If retirement is a long way off, you have time on your side, and can take steps to avoid funding yourself with inadequate retirement savings. Be sure to join any pension arrangement your workplace offers as soon as possible, and contribute at the maximum rate if you can afford it. If you don’t have a workplace pension plan, or want to augment the one you have, check out the Saskatchewan Pension Plan. The plan can be your personal retirement system – you can contribute up to $7,000 per year towards your future retirement, and SPP will grow that money for you with professional investing at a low price.

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U.K. research shows a lack of pension awareness, confusion on how plans work

While it’s great to be encouraging people to join pension plans if they can, and to save for retirement on their own if they can’t, new research from the U.K. suggests we may need to educate people a little better first.

According to Employee Benefits, a recent survey carried out by U.K. HR and payroll services firm MHR found that one in four Britons didn’t have a pension at work – and that “58 per cent of respondents admitted they find it hard to understand how their schemes operate and how to contribute to a pension plan.”

The research prompted MHR’s CFO, Mark Jenkins, to tell Employee Benefits that this figure shows “the stark reality of how unprepared today’s workforces are for their future.”

The article, citing research by Canada Life, suggests there is a gender divide in the U.K. on the issue of retirement confidence, with “two-thirds of men feeling confident they will retire at the age they intend to, compared to around half of women.”

As well, the Canada Life research showed fewer women than men “did not feel they would have any financial worries in retirement, at 45 per cent and 58 per cent respectively,” Employee Benefits reports. “This suggests that targeted pensions communications may be needed to address this gender imbalance,” the article adds.

Finally, the article – citing a third batch of research from Nudge Global – notes that “only 32 per cent of (U.K.) respondents receive” personal finance education (known on this side of the pond as financial literacy). All this research leads the Employee Benefits editor, Kavitha Sivasubramaniam, to conclude that despite the fact that Brits have “auto-enrolment” in workplace pension plans (they are automatically signed up for any pension program, with the right to opt out) “it hasn’t necessarily increased engagement with, or understanding of, pensions among employees.”

She goes on to write that “studies are constantly reaching the same conclusion, highlighting that raising pensions awareness is still most definitely a work in progress.”

One could easily write a book about pension awareness/literacy. So let’s not do that here. Let’s just say this – if you’re not sure whether or not your workplace offers a retirement plan, find out from a co-worker, the boss, your internal website, the HR folks. And if you can, consider signing up to whatever type of plan is being offered.

A pension, and your retirement, is never top of mind until you get within a few years of the actual last day at work/golden watch/retirement party. From that point forward, any workplace-related pension benefit will make life much easier for the future, retired you. It’s easy, especially when you are young, with many other things on your plate, to put off thinking about retirement.

So if there’s a workplace pension that you may be able to join, consider doing so. You really don’t want to regret not joining it 30 or 40 years from now.

And if you don’t have a plan at work, fear not. The Saskatchewan Pension Plan has all the pension infrastructure you need to build your own, do-it-yourself program. They’ve been helping people save for retirement for 35 years – be sure to check them out today!

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The summer of 2021 has seen the start of what looks like a return to normal. COVID numbers are down, vaccination rates are up, the economy is re-opening (carefully) and there’s talk again of travel, and of going back to the office.

Yet there’s also talk from some of NOT going back to the office? What gives? Save with SPP had a look around to explore this issue.

Research from Robert Half, an HR consulting firm, from April found that about one-in-three office workers “would quit their job rather than return to the office,” reports Western Investor.

More than half of those surveyed on the idea of returning to work said they “prefer a hybrid work arrangement, where they can divide time between the office and another location,” the article notes. Some of those surveyed did express concern that working from home has its downsides, such as the “loss of relationships with co-workers” and “fewer career opportunities and decreased productivity.”

Those who do imagine coming back want some perks, the article says, such as “greater freedom to set office hours, employer-paid commuting costs, a relaxed dress code and providing childcare.”

Ouch. What would the “dress for success” workaholics of the ‘80s make of this office aversion?

The numbers are similar south of the border. An article in Commercial Observer says that while 62 per cent of Manhattan workers were expected to return to the office, that leaves “one in three” who don’t plan to come back.

Only about 12 per cent of Manhattan’s 1.5 million office workers had returned to work by early summer and “39 per cent of people would be willing to quit their job rather than give up remote work,” the article says.

A more recent survey from Canada Life sheds some light on the concerns people have about re-entering office life.

Even given the dropping COVID numbers and higher vaccination rates, “46 per cent of Canadians working from home are anxious about the threat of the virus if and when they return to the office,” Canada Life reports in a media release.

Mary Ann Baynton of Workplace Strategies for Mental Health, who partnered on the research with Canada Life, explains this reluctance.

“For those working from home, this transition presents new and unique concerns, because they’ve been more isolated and have been able to limit their exposure to the virus for a long time. Employers need to understand what their teams are concerned about so they can effectively support them during this significant adjustment,” she states in the release.

COVID risk was by far the biggest concern identified in the research, the release notes – only 10 per cent were concerned about changes to their work-life balance, nine per cent about increased commuting, and less than one per cent about impacts to children and their care, the release notes.

From our informal research amongst friends and colleagues who have been working at home, there is certainly interest in having the flexibility to work from home – at least some of the time – going forward. If you’ve ever been crammed onto a train or subway car packed with commuters, or stuck in a 10-km long traffic jam each workday, or circling some lot in a fruitless quest for the last parking spot, it’s hard to look forward to starting all that up again. Only time will tell how it all plays out.

One thing that works as well at home as it does in the workplace is the Saskatchewan Pension Plan. You can sign up as an individual, effectively creating a tailored, end-to-end pension plan for yourself that looks after not only investing your savings, but converting them to income later on. If you’re an employer, you can offer SPP at your workplace, creating a great way to attract new team members and hanging on to the people you’ve got! Why not check out SPP today!

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Health Canada statistics reveal the number of Canadians with prescriptions for medical marijuana more than tripled between the fall of 2015 and 2016 from 30,537 people to nearly 100,000 individuals. And with legalized marijuana for recreational use slated to come into effect July 1, 2018, it is expected that use of the drug will soar.

In response to the proliferation of legal marijuana use, life and health insurance companies have had to rethink several aspects of their pricing and coverage including whether or not:

• Individual life insurance applicants using marijuana must pay smokers’ rates
• Benefit plans will reimburse clients for the cost of medical marijuana.

Smoker/Non-smoker rates
Until the last several years, marijuana users applying for individual life insurance had to pay smokers’ rates. For example, a man in his 30s could expect to pay about two to three times as much for a policy than a non-smoker. A smoker in his 40s could expect to pay three to four times as much.

Insurance companies charged this massive price increase because smokers have a much higher risk of death than non-smokers. In addition, smokers often have other health problems like poor diets or an inactive lifestyles.

Within the last two years, the following insurers in Canada announced their plans to begin underwriting medical and recreational marijuana users as non-smokers, including:

• Sun Life
• BMO Life Insurance
• Canada Life
• London Life
• Great-West Life

Sun Life is taking the most comprehensive approach, saying it will treat anyone who consumes marijuana but doesn’t smoke tobacco as a non-smoker. BMO Life Insurance is more restrained, limiting non-smoker status to people using only two marijuana cigarettes per week. Canada Life, London Life, and Great-West Life issued a joint statement which said that “clients who use marijuana will no longer be considered smokers, unless they use tobacco, e-cigarettes or nicotine products.”

This change won’t affect group benefits as coverage is not individually underwritten. An article on Advisor.ca includes a chart comparing where a series of major Canadian life insurers stand on pot use.

Drug plan coverage
So, what about coverage for medical marijuana under your benefits plan?

If your coverage includes a health care spending account (HCSA), you are in luck. Medical marijuana is an eligible expense under HCSAs because the Canada Revenue Agency (CRA) allows it to be claimed as a medical expense on income tax returns. Note that only marijuana is eligible under CRA medical exempt items, not vaporizers or other items used to consume it.

However, even though physicians are prescribing cannabis and people are using it for medical reasons, it is not currently covered under almost all traditional drug benefits. That’s because Health Canada hasn’t reviewed it for safety and effectiveness or approved it for therapeutic use the way it reviews and approves all other prescription drug products.

This means marijuana hasn’t been assigned a drug identification number (DIN), which the insurance industry usually requires before a drug can be covered. Until there is research that can be reviewed by Health Canada, marijuana will remain an unapproved drug and unlikely to be covered by your plan.

However several recent events suggest that it may be only a matter of time until group and individual drug plans offer at least limited coverage for medicinal marijuana.

Jonathan Zaid, a student at the Umiversity of Waterloo is the executive director of the group Canadians for Fair Access to Medical Marijuana. He has a rare neurological condition that causes constant headaches, along with sleep and concentration problems. Zaid said he was sick for five years before even considering medical cannabis. He tried 48 prescription medications, along with multiple therapies, all of which were covered by his insurer without question – except for medical cannabis.

After eight months of discussions, the student union (who administers the student health plan) came to the conclusion that they should cover it because it supports his academics and should be treated like a medication.

Similarly, the Nova Scotia Human Rights Board ruled in early 2017 that Gordon Skinner’s employee insurance plan must cover him for the medical marijuana he takes for chronic pain following an on-the-job motor vehicle accident. Inquiry board chair Benjamin Perryman concluded that since medical marijuana requires a prescription by law, it doesn’t fall within the exclusions of Skinner’s insurance plan.

Perryman said the Canadian Elevator Industry Welfare Trust Plan contravened the province’s Human Rights Act, and must cover his medical marijuana expenses “up to and including the full amount of his most recent prescription.”

And at least one major company is covering employees for medical marijuana in very specific circumstances. In March 2017, Loblaw Companies Limited and Shoppers Drug Mart announced in an internal staff memo that effective immediately it will be covering medical pot under the employee benefit plan up to a maximum of $1,500 per year for about 45,000 employees.

Claims to insurance provider Manulife “will be considered only for prescriptions to treat spasticity and neuropathic pain associated with multiple sclerosis and nausea and vomiting in chemotherapy for cancer patients,” said Basil Rowe, senior vice-president of human resources at Loblaw Companies Ltd., owner of Shoppers, in the memo.

“These are the conditions where the most compelling clinical evidence and literature supports the use of medical marijuana in therapy,” explained Loblaw/Shoppers spokesperson Tammy Smitham. “We will continue to review evidence as it becomes available for other indications (conditions).”

Since cannabis does not yet have a Drug Identification Number recognized by insurers, it isn’t covered under typical drug spending. However, it will be covered through a special authorization process where plan members will pay and submit their claim after, said Smitham.

The move could trickle down to other Canadian employers and their benefit plans and even set a precedent, Paul Grootendorst, an expert on insurance and reimbursement and director of the division of social and administrative pharmacy in the Leslie Dan Faculty of Pharmacy at the University of Toronto told the Toronto Star.

Written by Sheryl Smolkin
	Sheryl Smolkin LLB., LLM is a retired pension lawyer and President of Sheryl Smolkin & Associates Ltd. For over a decade, she has enjoyed a successful encore career as a freelance writer specializing in retirement, employee benefits and workplace issues. Sheryl and her husband Joel are empty-nesters, residing in Toronto with their cockapoo Rufus.