December 11, 2023

Working folks would prefer better pensions to a raise – but do employers get that?

An interesting schism has been discovered between employers and employees when it comes to pensions.

A study prepared for the Healthcare of Ontario Pension Plan (HOOPP) by the Angus Reid Group found that employers who think pay raises are a better way to attract and retain talent than offering or improving pension benefits may “be at odds with what Canadian workers want.”

The research is summarized in a recent HOOPP media release.

There was some good news, the release notes – some employers seem to be getting the message about workplace retirement programs. “A growing number of employers are turning to benefits, including pensions, to address a challenging labour market and improve employee retention and productivity,” the release points out.

So, what was the key finding of this research?

“The annual survey of 754 Canadian business owners and senior leaders with 20+ employees found employers who don’t offer retirement benefits may not be fully aware of their employees’ views on pensions, as 77 per cent believe their employees would choose a higher salary over a pension. In fact, previous HOOPP research has found that almost two-thirds (61 per cent) of Canadian workers would prefer a pension over a pay hike,” the release reports.

Let’s run that one by a second time. More than three quarters of employers think their teams want higher salaries versus pensions. But 61 per cent of employees prefer pensions over wage hikes!

“Workers may want pensions even more than their employers know,” said Ivana Zanardo, Head of Plan Services, HOOPP, states in the release. “Employers want to remain competitive in a difficult labour market and it’s easier to stay ahead if you understand, and can offer, what the workers you’re trying to attract and retain are looking for in terms of compensation.”

Attracting new employees and keeping them after they are hired is tougher these days, with unemployment running relatively low, the study notes.

“A significant majority of employers expressed concern about the negative impact of greater competition for hiring (77 per cent), a labour shortage (75 per cent) and employee burnout (73 per cent) on their organizations,” the release explains.

But those who offer retirement programs to their teams report different findings, the release continues:

  • “58 per cent of employers who added or improved retirement benefits in the last year report higher than usual productivity, compared to just 34 per cent of employers who don’t offer them.”
  • “Employers offering retirement benefits are two times more likely to say their employees can retire at or by age 65 (80 per cent) than those who don’t offer them (42 per cent).”
  • “Employers who offer retirement benefits consistently rank retention (64 per cent) and recruitment (59 per cent) as the top benefits of doing so.”

Zanardo concludes the release by noting “the hope is that dialogue between businesses, government, the retirement industry and workers will help employers overcome obstacles to offering retirement benefits.”

We know that the Saskatchewan Pension Plan offers individual retirement savers the chance to have their hard-saved dollars professionally invested at a low cost. But a growing number of employers have found that they can set up a workplace pension plan easily using SPP, with the vast majority of administration work (statements, tax slips, and so on) handled by the team in Kindersley. If you’re interested in offering SPP as a benefit to your employees, contact SPP today!

SPP’s Variable Benefit option is now available to all members – it’s borderless! Find out how this flexible retirement income option can work for you.

Join the Wealthcare Revolution – follow SPP on Facebook!

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 and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


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