iAtoday

For the second year running, iA Financial Group was proud to partner with Benefits Canada for the CAP Member Survey 2023. This survey was aimed at individuals participating in a group retirement savings plan offered by their employer (group RRSP, defined contribution plan, TFSA or DPSP), with the objective of better understanding:

• their knowledge, confidence and satisfaction with their plan
• the influence of the economic context on their financial priorities and savings behaviour
• their perceptions of their level of preparedness for retirement

Here are a few highlights from the CAP Member Survey 2023, as well as the possible outlook from the perspective of an insurer like iA.

A difficult economic context marked by inflation

The threat of a recession is becoming ever more apparent, and this is having an impact on household finances, as people are having to do more with less: three out of four people surveyed (75%) felt that inflation was having a negative impact on their financial situation. Clearly, Canadians are facing a number of financial challenges, and many of them were on the minds of those surveyed.

Retirement savings less and less of a priority

The difficult economic environment has weighed on households' financial situation, which has deteriorated compared to last year. In terms of financial priorities, paying for day-to-day expenses is increasingly taking precedence, eclipsing retirement savings, which are even further down the rankings this year.

Misunderstanding: an ever-present need for information and support

Although the majority of respondents are confident that the group retirement savings plan offered by their organization will help them achieve their financial goals in retirement, three out of four (75%) are concerned that they will not have saved enough when the time comes. Furthermore, only one in two (50%) say they have a formal, documented financial plan specifying their target retirement age and the amount of money they need.

Other worrying findings

The majority of those surveyed prioritize their personal RRSPs and TFSAs over those offered by their organization, despite the advantages of group plans.

• Four out of ten people (40%) say they have little, or no understanding of the risks associated with inflation, interest rates and longevity (outliving one's retirement savings).
• An equal proportion also do not know how to convert their retirement savings into a retirement income. 

In light of these findings, we cannot clearly establish that plan members know what to do to set and achieve their retirement goals. This demonstrates a real need for information and support.

Declining commitment despite a variety of tools and services available

Three-quarters (75%) of those surveyed have access to tools and services to help them achieve their retirement savings goals. Despite this, the use of these resources remains on the decline, indicating a real lack of engagement on the part of members. 

According to Kenrick Hopkinson, Director, Plan Member Wellness and Education, Group Benefits and Retirement Solutions, plan sponsors need to take a step back and think about how to optimize the use of existing tools and services. “More than ever, we need to consider the different types of learners with whom we work, but we also need to evolve our tools and services by focusing on simplicity and accessibility. We need to show them how to use the resources, make sure they understand how to access them, and provide them with a place to ask questions.”

What does this mean for insurers like iA?

The difficult economic environment in which we have been operating over the past few years presents insurers with a number of challenges. At iA, these challenges represent opportunities to evolve and create added value for organizations and their employees. Whether it is a question of planning for a financial milestone – like buying a house or retirement, or developing knowledge about retirement savings, education, support and communication remain the key to success.

“Plan sponsors should forge a strong alliance with their insurer, ensure they have the right financial tools and services, and focus on promoting them. At the same time, they should prioritize the evolution of their financial wellness and education programs since it is no longer enough to focus solely on retirement savings programs. We need to develop engagement strategies that focus on supporting people to achieve their personal goals,” says Kenrick Hopkinson.

What can we expect next?

Kenrick Hopkinson's team will be focusing on simplicity, accessibility and microlearning to generate commitment and optimize support, with a single ambition in mind: to be present and active in the daily lives of Canadians to support their financial, physical and mental well-being.

As Kenrick reminds us: “Employees can count on the expertise of our Education Specialists to provide them with information on a wide range of financial topics, whether it's informing them about their group retirement savings plan, introducing them to the investment options available to them, or explaining the possibilities that will open up to them when they retire.”