If you
did you were in the majority. According to a survey (PDF file) by the Healthcare of Ontario Pension Plan, more than half of
Ontarians without workplace pension plans saved nothing for retirement in the
last year - and more than 83% fear that without better pension coverage Ontario
is headed for a retirement income crisis.
Three tiers—government support, private pensions,
and savings—have defined the Canadian retirement system for close to 50 years.
Government support provides a basic benefit, but a pension helps a retiree
maintain a middle-class standard of living, and retirement savings provide
important supplemental income for unforeseen expenses.
As good pensions become increasingly rare in the
private sector, there is renewed debate as to what extent governments should
play the role of provider in Canada’s three-tiered retirement system.
Research carried out by the Gandalf Group for the
Healthcare of Ontario Pension Plan shows that Ontarians feel Canada’s workplace
pension system is not delivering adequate retirement security; they are
concerned that this could lead to a retirement income crisis down the road and
cause an increase in senior poverty. The Gandalf Group surveyed 1,132 Ontarians
in September, 2015
• If workers aren’t able to access
good workplace pensions and contribute during their working lives, 84% believe
they will become a burden on the taxpayer. As well, 82% say that without good
pensions in place, the economy will suffer.
• Of those surveyed, 85% say that
with-out good pension plans at work many Canadian seniors will experience
poverty. As well, 75% say it is becoming more and more difficult for seniors to
stay out of poverty.
• The fact that workers aren’t
saving enough on their own will contribute to a retirement income crisis,
according to 75% of respondents.
• The lack of good and accessible
workplace pensions will contribute to a crisis, say 74% of those
questioned.
• Because contributions to
workplace pension plans are not mandated by the government, 72% say it will
contribute to a crisis.
• Those with DB pensions say they
expect to receive about 60% replacement income—about 3% less than the amount
cited as adequate. But those with DC pensions fear they will be short by 16%,
and those with no pension at all are concerned they’ll be short by 18%.
• Of those with workplace pensions,
45% say they have saved nothing for their retirement on their own in the past
year— and that figure rises to 58% for those without pensions at work
• Only 31% of Ontarians surveyed
said they agree with the statement that “most Canadian workers have a good
workplace pension program.”
• Of those surveyed, 77% said all
workers should have a pension that guarantees a percentage of their working
income in retirement. The same strong majority of 77% prefer a pension that is
based on what they earned rather than a pension with payouts that vary based on
market fluctuations.
• Only 21% said they would prefer
to receive more of their salary rather than having money deducted from their
pay for their pension.
• When asked what type of pension
the government should be encouraging businesses to offer, 47% called for
defined benefit (DB) plans and 32% wanted defined contribution plans
(DC).
• Of those surveyed, 77% supported
increasing Canada Pension Plan (CPP) costs and benefits.
• When asked whether contribution
changes to the CPP should be mandatory, 54% of respondents agreed, 23% felt
they should be able to opt out of changes and 17% thought any changes should be
voluntary.
• A 70% majority supported the idea
of the Ontario Retirement Pension Plan (ORPP) increasing pension benefits. •
When asked, 74% said increased pension contributions are a form of savings and
an investment in the employee’s future. Only 20% saw pension contributions as a
tax.
Those are just some of the findings of a poll
carried out for the Healthcare of Ontario Pension Plan (HOOPP) by the Gandalf
Group. The research found Ontarians were "very concerned" or
"somewhat concerned" about these key retirement planning topics:
·
58%
without pensions at work saved nothing for retirement in the last year.
·
85% worry
that without good workplace pensions, Ontarians will face senior poverty.
·
62%
wonder if they will have enough money for retirement.
·
58% ask
if their retirement savings are secure.
How much is enough retirement savings? The research
found that half of Ontarians believe they will need an average of 63% of their
working salary to live on in retirement.
This research illustrates the point that the vast
majority of people are much better off in a structured plan such as a defined
benefit plan. The defined benefit (DB) pension model addresses the challenges
of saving enough and receiving enough, says HOOPP President and CEO Jim Keohane.
Member contributions are automatically made each payday and the DB payout is
based on a percentage of workplace earnings.
"With a plan like HOOPP, after 30 years of
membership a member can expect to receive about 60% of what they earned at
work," Keohane says. "That pension is paid for life - and about 80
cents of every dollar HOOPP pays out comes from investment returns."
78% of those surveyed felt that pension plans
offered at work should deliver retirees at least 60% of their pre-retirement
income. Gandalf conducted the survey of 1,132 Ontarians in early September.
About
the Healthcare of Ontario Pension Plan
Created
in 1960, HOOPP is a multi-employer contributory defined benefit plan for
Ontario's hospital and community-based healthcare sector with over 470
participating employers. HOOPP's 295,000 members and pensioners include nurses,
medical technicians, food services staff and housekeeping staff, and many other
people who work hard to provide valued Ontario healthcare services
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