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Secure Pension Plan Increasingly Important

A secure pension plan is an increasingly important component of an attractive pay package, says a survey by Towers Watson. In fact, it found one-third of Canadian employees would be willing to sacrifice a portion of their compensation in return for enhanced retirement security, while one in four would agree to forgo a bonus in exchange for additional retirement benefits. “As financial insecurity becomes more widespread, Canadian workers are increasingly interested in a secure rewards package with retirement benefits they can count on” says Ian Markham, its retirement innovation leader. “While Canadians have traditionally looked to employer-sponsored retirement plans as one part of their financial future, the fact that so many workers are willing to trade pay increases or bonuses for enhanced retirement security points to the significant unease that many employees hold towards financial planning for their retirement years.” For sponsors of Defined Benefit plans, the survey found that 50 per cent of respondents identified their retirement program as a key reason for joining their current employer, compared to 30 per cent of respondents with a Defined Contribution plan or Group RRSP. DB plans appear to play an even more significant role in retention. Depending on age, between 62 per cent and 71 per cent of Canadian DB plan participants cite their retirement program as a compelling reason to remain with their current employer, compared to between 30 per cent and 50 per cent of those with a DC plan. Younger DB plan participants under 40 years of age were twice as likely to stay with their current employer, compared to those with a DC plan.

Courtesy of Benefits and Pensions Monitor website News Alerts

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