Middle-class Canadians have the most work ahead of them to save for retirement, says a report by the Public Policy Forum and Morneau Shepell.
The report, Retirement Security for Everyone, says younger middle-income workers in the private sector have the fewest retirement savings options.
Low-income people will have enough income from government programs, says the report. High-income people have private investments, inheritances and other sources of wealth at their disposal. Stuck in between are middle-income earners who often don’t have adequate workplace pensions or enough money to save for retirement on their own.
“Over the past three decades, pension coverage among private sector employees has decreased substantially in Canada. Whereas in 1984, 44% of private sector
employees in Canada were enrolled in a Registered Pension Plan, by 2011, this number had dropped to 25%,” says the report.
Advisor’s Melissa Shin reports on the challenges of corporate pensions:
“Defined benefit pensions challenge firms that provide them by making company financials more volatile, because promises to employees must be kept regardless of economic conditions.”
Read more here.