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Need To Save For Retirement Recognized

Small owners recognize the need to help employees save for retirement and appear open to government support on the issue, says the 2013 ‘Manulife Financial Small Business Research Report.’ With a lack of retirement savings vehicles available for employees in small companies, it found 82 per cent of owners and senior executives said they would set up a pooled registered pension plan (PRPP) either voluntarily or if the government made it mandatory. It cites John Sabourin, vice-president with Selectpath Benefits and Financial Inc. in London, ON, who says part of the solution to improving retirement adequacy is educating clients and employees about the value of saving for retirement, but that’s not enough. “I believe the only way to actually have more commitment to the savings vehicles and avoid having people use their retirement savings as a backup bank account is to have an element of forced savings.” It says mandatory PRPPs would be a step in this direction. This would also give advisors another service to offer clients who struggle with the administrative and cost challenges of existing retirement plans. When launched, the PRPP will be a tool to help Canadians get more prepared for their retirement.

Courtesy of Benefits and Pensions Monitor website News Alerts

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