According to Manulife Financial’s most recent Investor Sentiment Index, just 47% of working Canadians (i.e., those aged 25 and older) have a workplace retirement savings plan. The survey also revealed that Canadians are risk-averse investors, and that they may be missing out on opportunities to increase their savings – for example, by maximizing contributions to an employer-sponsored pension plan.
Canadians seem particularly reluctant to ask for professional advice about their workplace retirement plans. The Manulife survey showed that only 6% of the respondents currently seek help from a financial advisor to manage their workplace savings, and only 38% are interested in having their employer contract a third-party firm to help them plan for their retirement. However, 66% of those surveyed indicated that they will probably keep the investments within their employer plan and begin to draw an income when they retire rather than transfer the assets to another financial institution.
"Access to workplace savings plans and financial advice can help Canadians plan for a better retirement," comments Marianne Harrison, senior executive vice president and general manager of Manulife’s Canadian division. "The action taken by the federal government in 2012 to pass the Pooled Registered Pension Plans (PRPP) Act, creates a national awareness that Canadians need to save for retirement. We continue to work closely with the federal and provincial governments to help make this savings solution available across the country."
On October 15, Nova Scotia became the most recent province to introduce PRPP legislation. The provincial government says that only about 40% of Nova Scotians have a pension and less than 20% of working Nova Scotians contribute to a Registered Retirement Savings Plan.