An overwhelming majority of Canadians say they want a program that makes it easier for employers to offer a pension plan, according to a Research House survey commissioned by the Canadian Life and Health Insurance Association (CLHIA).
The results show 90% of Canadians support the federal government’s proposal to improve employer access to pension plans through Pooled Registered Pension Plans (PRPPs), which would be administered by regulated financial institutions. PRPPs have received greater attention in recent months, following Federal Finance Minister Jim Flaherty’s agreement with the provinces to move ahead with plans for PRPPs as an aspect of enhancing the country’s pension system.
The aim of PRPPs is to encourage more retirement savings, and the survey data suggests they will have the intended effect: 55% of working Canadians say they would save more for retirement if they had a PRPP option. The number jumps to 60% for households with children under the age of 17.
“The plan by finance ministers to enhance employer savings programs is massively popular among Canadians in every region of the country,” said Frank Swedlove, President, Canadian Life and Health Insurance Association. “It is rare to see a public policy idea receive virtually unanimous approval with the public.”
PRPPs make it easier and less expensive for employers to offer a retirement savings program. They relieve the employer of almost all administrative costs and compliance issues – except for payroll deduction processing – enabling more companies, employees and the self-employed to participate. PRPPs will be particularly appealing to small- and medium-sized employers.
Support for PRPPs was greatest – 92% – among people working for private companies. Albertans show the highest rate of support at 94%. Ninety-one percent of Ontarians and Atlantic Canadians support PRPPs, with support in Quebec only slightly lower at 86%.
While 59% support some government role in retirement saving, the poll shows Canadians also want choice in their investment decisions, and think the private sector provides it. A mere 13% say they want their retirement savings completely in a public plan.
“Canada has one of the world’s best retirement savings programs according to the Melbourne-Mercer Global Pension Index. It works because it balances public sector and private sector roles, offers choice to Canadians, and manages costs. This is an opportune time to make the adjustments to improve it, so all Canadians are better served,” Swedlove said.
Younger employed Canadians continue to lag behind their older counterparts in retirement saving: 54% of those aged 18-29 who are working for a private company say that presently they are not saving at all for retirement, while 75% of those aged 30-49 and 78% in the 50-64 age bracket say they are saving. Residents of Manitoba and Saskatchewan are the highest savers at 87%, while Quebeckers and British Columbians are the lowest at 63% and 66%, respectively.