Contributed by: Healthcare of Ontario Pension Plan (HOOPP)
There is no better time to have access to a workplace pension plan like HOOPP. Inflation is high. Interest rates are high. Housing costs are high. In short, financial stress is high. And with the stress of trying to fulfill all the financial responsibilities of daily living, having access to a top-tier pension plan is something healthcare workers can feel at ease about. Here's why.
HOOPP is a Canada-model pension plan, and while this term might be unfamiliar to you, it's one we hope you get to know. Canada-model pension plans can dramatically reduce the cost of saving for retirement. There are several reasons for this: they have in-house investment experts working collaboratively to manage a very large and diverse portfolio; they benefit from the power of risk pooling, with many members contributing; and they are governed by independent boards who are legally obligated to act in the best interest of members. All this and more make them the most efficient way to provide retirement income for the long haul.
At HOOPP, we advocate for greater retirement security for all Canadians and we regularly commission research to draw attention to this urgent need. Our intent is to support the pension promise by raising awareness of the value that good pension plans like HOOPP bring not just to its members, but also to the communities where they live and work, and to the economy.
The stark reality for many individuals:
Sixty per cent of Canadian workers don't have access to a registered pension plan. To save for retirement, they need to make difficult decisions that pension members don't have to make, like how much income is needed for life? Are stocks or bonds better? What about low- or high-risk investments? And it's a grim scenario when you factor in the financial concerns as a result of the current economic instability. Based on the 2022 Canadian Retirement Survey from HOOPP and Abacus Data, as inflation and interest rates soar, Canadians are worried that their day-to-day expenses will become less affordable and impact their ability to save for retirement. Despite financial strain, 66% of Canadians would rather have a lower salary and a pension (or better pension) than a higher salary with no pension (or worse pension).
What's the employer advantage to offering workplace retirement benefits?
Actually, a lot. Just as HOOPP surveys the general public, we also seek the views of Canadian employers. In our latest research with Angus Reid Group, Canadian Employer Pension Survey, a majority of employers say retirement benefits are a cost-effective way to reduce financial stress for employees (85%) and more of an investment in human capital than a cost to business (78%).
So it may not come as a surprise that employers have a competitive advantage when they offer retirement benefits. Most employers, including the ones that don't offer any, see retirement benefits as an aid for recruiting (66%) and retaining (62%) talent.
And a good number of them are taking action. In fact, 17% of Canadian employers introduced or enhanced their retirement benefit offerings last year, or plan to in the year ahead. And those that did introduce or improve in the last year are seeing the gains to their business. They are less likely to be negatively impacted by greater competition for hiring (57% vs. 77%), high turnover (64% vs. 71%) and labour shortages (62% vs. 76%).
Consensus: employees and employers agree on the need for pensions
A strong majority of both employers and employees (75% or higher) agree with these statements.
All workers should have access to an affordable retirement savings arrangement.
Businesses have a responsibility to offer a pension plan workers can access to support adequate retirement income.
If workers can't access good workplace pensions and contribute during their working lives, they will have inadequate retirement savings and will need to rely more on government assistance.
Improved retirement outcomes for all Canadians are good for the economy, and businesses' and employees' financial health. Learn more about our research by visiting hoopp.com.