200 Morneau Shepell clients who sponsor pension plans took part in a
TORONTO, Dec. 5, 2013 /CNW/ - Morneau Shepell's 60-Second Survey for
November 2013 shows that an expanded Canada/Quebec Pension Plan (C/QPP)
is considered to be the best way to improve Canada's retirement income
system. The survey received responses from 200 employers across
When asked to identify the most cost-effective way to improve Canada's
retirement income system, 32 per cent opted for an expansion of the
C/QPP. This would affect future service only and involve an increase
in both the benefit rate (to 35 per cent) and the earnings ceiling (to
$76,000). The second most popular response, at 25 per cent, was to do
nothing other than launch a campaign to encourage Canadians to save
more. The other possibilities were to require every employer and
employee to contribute 2 per cent of annual pay up to $76,000 to a
supplementary C/QPP DC arrangement (selected by 23 per cent) and to
auto-enroll everyone in a Pooled Registered Pension Plan (PRPP) without
employers being required to contribute and to allow individuals to opt
out (20 per cent).
"It is a little surprising that over half the respondents are ready to
increase employer contributions, either in an expanded C/QPP or in an
equivalent defined contribution arrangement," said Fred Vettese, chief
actuary of Morneau Shepell. "The general impression has been that
employers were either unwilling or unable to contribute more to
retirement arrangements in a fragile economy."
When asked what role the C/QPP, Old Age Supplement (OAS) and Guaranteed
Income Supplement (GIS) combined should play, 65 per cent of
respondents said middle-income individuals should derive enough income
from these sources to retire comfortably while 27 per cent said
government pensions should be enough to avoid poverty. The remaining 8
per cent felt that government pensions alone should enable
middle-income Canadians to continue the same standard of living into
retirement, even if they do not participate in workplace pension plans
The respondents were also asked what they would do with their
organization's pension plans if the C/QPP was expanded substantially.
Among respondents who sponsor workplace plans, 11 per cent indicated
they would wind down their plans and another 29 per cent said they
would reduce the benefits in their plans dollar for dollar. A further
26 per cent would reduce their workplace plans by a smaller percentage
and 34 per cent said their workplace plans would not change.
"These responses suggest that an expanded C/QPP or a new defined
contribution arrangement with employer contributions will result in
significantly increased benefits for many employees who are already
enrolled in workplace pension plans," said Vettese. "Many more of them
would end up with consumption replacement ratios in excess of 100 per
cent after retirement."
Of the 200 employers who responded to the survey, 43 per cent
represented employers who sponsor mainly defined benefit (DB) plans, 28
per cent who sponsor mainly defined contribution (DC) plans, 15 per
cent with a mix of both DB and DC, and 14 per cent who provide little
or no pension coverage.
About Morneau Shepell Inc.
Morneau Shepell is the largest company in Canada offering human
resources consulting and outsourcing services. The Company is the
leading provider of Employee and Family Assistance Programs, as well as
the largest administrator of retirement and benefits plans. Through
health and productivity, administrative, and retirement solutions,
Morneau Shepell helps clients reduce costs, increase employee
productivity, and improve their competitive position. Established in
1966, Morneau Shepell serves more than 8,000 clients, ranging from
small businesses to some of the largest corporations and associations
in North America. With approximately 3,300 employees in offices across
North America, Morneau Shepell provides services to organizations
across Canada, in the United States, and around the globe. Morneau
Shepell is a publicly-traded company on the Toronto Stock Exchange
(TSX: MSI). For more information, visit morneaushepell.com.
SOURCE: Morneau Shepell Inc.
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