A look at the best of the Internet, from an SPP point of view
DC industry looks at automatic enrolment, waiving waiting periods
Getting people to save for retirement is never easy – even, it seems, if they have a defined contribution (DC) workplace pension plan.
A report in Benefits Canada on their recent DC Summit held in Banff, Alta., says a roomful of DC sponsors, industry officials and investment people “recently compiled a wish list for DC plans.”
On that list – auto-enrolment and mandatory contributions. As well, the sponsors discussed “the suggestion to shorten or eliminate any probation period required before new employees can join a workplace plan.”
Auto-enrolment, the article explains, has already been rolled out in the UK. The idea is that instead of letting an employee decide whether or not to join, you just automatically enroll them – if they don’t want to be in the plan, they can opt out. This “nudge” approach works, because most people, once in, don’t bother to opt out.
The other ideas are similar – mandatory contributions meaning, once you are in, you stay in, and can’t decide to stop contributing. And getting rid of waiting periods would ensure people join more quickly, allowing them to contribute more.
The author of the article, Jennifer Paterson, explains it all very well. “For my part, I’m extremely supportive of this type of legislation. I believe one of the most fundamental barriers to retirement savings is inertia, so I welcome anything the government and employers can do to ensure people automatically join a workplace plan with mandatory contribution levels, and do so as soon as possible.”
Save with SPP agrees strongly. Workplace pension plans of any sort are increasingly hard to come by in most private sector companies, so it is essential that those who can join, do. They will certainly thank themselves in the future for having done so.
Another nice trend spotted lately is the return of savings optimism, not seen for some time. A recent CNBC survey found Americans were more confident (30 per cent) or much more confident (27 per cent) about their ability to save for retirement versus three years ago.
“With the economy in its 10th year of expansion, wages creeping up and unemployment below 4 per cent, experts say being in a better place financially is a good opportunity to address your savings anxiety,” the article notes.
If you are fortunate enough to have a retirement program at work, be sure to join it if you haven’t already. And if you don’t, the Saskatchewan Pension Plan provides a way for you to create your own plan. Once you enrol, you can set your level of contributions and can choose to increase what you pay in whenever you get a raise. And SPP is a full-featured plan, in that there’s a simple way, once you retire, to turn those hard-saved dollars into income for life. Be sure to check it out today!
|Written by Martin Biefer
|Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing, classic rock, and darts. You can follow him on Twitter – his handle is @AveryKerr22|