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Mercer survey finds retirement as the #1 savings objective and biggest worry for Canadians

  • November 5, 2015
  • Canada, Toronto

More Canadian workers worry about saving enough for retirement vs. keeping up with monthly expenses 

Saving for retirement is the clear priority among Canadian employees’ saving goals and a clear cause of anxiety. Not surprisingly, older employees show more concern as retirement becomes a fast-approaching reality. For many workers age 50 and older, retirement reality includes part-time work (41%), a lower standard of living (46%) and even a delay in retirement (34%). According to Mercer’s latest data from the Inside Employees’ Minds™ Survey, conducted among more than 1,000 Canadian workers representing a cross-section of the overall national workforce, younger workers are more optimistic with 82% of those ages 18-34 believing they have time to catch up on savings before retirement.  They should take note that 64% of workers over 35 wish they started saving earlier.

The new survey from Mercer, a global consulting leader in advancing health, wealth and careers, and a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), also shows that base pay continues to rank as the most important employment reward element for Canadian workers. Retirement savings and pension plans ranks as the second most important reward element and health care coverage comes in third. Even still, 82% of Canadian workers agree that getting health benefits through work is just as important as getting a salary. The high cost of healthcare is causing anxiety as more than 70% of Canadian workers are concerned that increasing health care costs are going to require saving even more for retirement than originally thought.

“Saving for retirement continues to be a major objective for Canadian employees across all sectors and regions,” said Jean-Philippe Provost, a Senior Partner and market business leader for the Canada Retirement business. “We are seeing a high level of anxiety among workers regarding healthcare costs in retirement, not having enough savings and being ill prepared in general. Twenty percent of Canadian employees say these worries keep them up at night. There is an opportunity for employers to enhance financial wellness efforts to help employees better prepare for investment income and medical care costs in retirement.”

As employees are looking to save more, naturally they are looking to increase their base pay. Employees surveyed say their organizations are falling behind on efforts to match pay to performance. Fifty-one percent of employees believe they are paid fairly given their performance and contributions, compared to 57% in 2011. Employees also say they are losing support from their managers, with only 37% believing promotions are given to the most qualified (compared to 41% in 2011) and 36% saying their manager plays an active role in personal career planning (compared to 43% in 2011).

Employers should be concerned as 35% of all workers – regardless of job satisfaction level – are seriously considering leaving their organizations. As the younger generations of workers — X, Y (the Millennials) and the incoming Z — comprise a larger percentage of the overall workforce, their preferences and behaviors are influencing larger trends more strongly than in years past. Younger workers have shown that they are more nomadic, have much shorter tenure expectations, and have high expectations for rapid advancement and pay.

“The multi-generational workforce of today is forcing employers to carefully assess the health, wealth, and career elements that make up their overall rewards strategy,” said Graham Dodd, North American Regional Practice Leader, Talent Strategies at Mercer “With employees placing so much importance on pay, career advancement, retirement savings and benefits, employers need to rethink and reshape their value propositions in a way that reflects the evolving workforce composition.”

To learn more about Mercer’s Inside Employees’ Minds research, please click here.

About Mercer

Mercer is a global consulting leader in talent, health, retirement and investments. Mercer helps clients around the world advance the health, wealth and performance of their most vital asset — their people. Mercer’s more than 20,000 employees are based in 43 countries and the firm operates in over 140 countries. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global professional services firm offering clients advice and solutions in the areas of risk, strategy and people. With 57,000 employees worldwide and annual revenue exceeding $13 billion, Marsh & McLennan Companies is also the parent company of Marsh, a leader in insurance broking and risk management; Guy Carpenter, a leader in providing risk and reinsurance intermediary services; and Oliver Wyman, a leader in management consulting. For more information, visit www.mercer.ca. Follow Mercer on Twitter @MercerCanada.

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Figure 1 – Who Values What: Most Valued Elements of the Employment ‘Deal’ – By Age

 

 

All employees

18-34

35-49

50+

#1

Base Pay

Base Pay

Base Pay

Base Pay

#2

Retirement Plan

Career Opportunities

Retirement Plan

Retirement Plan

#3

Health Care Coverage

Health Care Coverage

Health Care Coverage

Health Care Coverage

#4

Paid Time Off

Flexible Schedule

Paid Time Off

Paid Time Off

#5

Flexible Schedule

Retirement Plan

Flexible Schedule

Type of Work

#6

Type of Work

Paid Time Off

Incentive Pay

Flexible Schedule

Source: Mercer’s 2015 Inside Employees’ Minds Survey

 

Figure 2: Expectations in Retirement

Given the retirement savings in place right now and the rate at which I am adding to my savings, I expect the following to be true in retirement …

 

 

Source: Mercer’s 2015 Inside Employees’ Minds Survey™

 

Figure 3: Anxiety Around Cost of Benefits Looms

How would you characterize the affordability of your out-of-pocket costs for health care today and 5 years from now?

 

 

Source: Mercer’s 2015 Inside Employees’ Minds Survey


Figure 4: Performance management also down

Percentage of private-sector employees who agree that...

 

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