MONTREAL, Sept. 6, 2012 /CNW/ - There's good news and there's bad news
in this year's survey of employees conducted by the Canadian Payroll
Association (CPA) to mark National Payroll Week. First, the good news:
Fewer living close to the line
Responses from 3,500 employees across Canada found that fewer are now
living pay cheque to pay cheque. Although 47% are still reporting that
they would be in financial difficulty if their pay was delayed by even
a week, it is still a significant improvement over the 57% last year
who were just making ends meet.
At 33%, Quebec has the lowest percentage of employees living pay cheque
to pay cheque among the provinces/regions.
Another encouraging sign in CPA's fourth annual survey is that many more
employees are now finding they are able to increase their savings.
While only 40% of employees trying to save more were able to do so last
year, this has increased dramatically to 66% in 2012.
Quebec leads all other provinces/regions in this category. Of those
trying to save more, 71% of Quebec employees say they have successfully
done so this year.
Re-assessing retirement needs
Canadian employees also appear to be taking a harder look at their
retirement needs. Fewer now feel that savings of $500,000 to $1 million
will be sufficient to live comfortably in retirement (34% this year,
42% last year) while more think a nest-egg of between $1 million and $3
million will be needed (38% this year, 27% last year).
Now, the bad news:
Rate of savings remains low
Although more Canadian employees are saving, the rate of savings remains
low. Almost half (46%) say they're putting away only 5% or less of
their pay. Financial planning experts generally recommend a retirement
savings rate of 10% of net pay.
Far from reaching retirement goals
The low savings rate is reflected in another worrisome finding. When
asked how close they are to their retirement goal, 73% of employees say
they have saved less than a quarter of what they wish to accumulate.
Of particular concern is the finding that even among Canadian employees
closer to retirement (50 and older), 45% report that they are less than
a quarter of the way to their retirement savings goal.
Having to work longer
For those employees with a target retirement date:
41% say they'll now have to work longer - five more years on average -
than they planned in 2007;
the top reason cited for having to work longer was "I'm not saving
enough money for retirement"; and
the median retirement date is 60 years of age.
Debt is the chief obstacle to saving
Two out of every five Canadian employees are spending at, or in excess
of, their net pay. Again, Quebecers appear to be doing better with only
30% of its employees spending at this rate.
"This year's survey shows that more Canadian employees are now able to
save more, and fewer are living pay cheque to pay cheque," notes
Caroline Bernard, CPA Chairman. "However, only 13% have saved half or
more of their retirement funds goal."
Patrick Culhane, President and CEO, says the low retirement savings
numbers are especially worrisome among older workers. "Many are people
who will be leaving the workforce in a few short years, yet most of
them remain far below their retirement targets."
Payroll professionals can often help employees save by automatically
directing a portion of their net pay to a separate savings account
and/or into a Registered Retirement Savings Program (which reduces
one's income tax).
Visit www.payroll.ca for a summary of the survey findings (under Media Room) and for further information. CPA spokespersons across Canada are
available for interviews. Contact:
Kevin Gaudet 416-777-0368
Leslie Challis 416-767-0167
CPA Survey of Employed Canadians:
A total of 3,499 employees from across Canada, and from a wide range of
industry sectors, responded to an online survey between June 16 and
August 13, 2012, using a convenience sampling methodology. Respondents
to the survey were recruited by members of the CPA with whom they work
to get responses from employed Canadians. This Canadian Payroll
Association developed survey was conducted by Framework Partners, a
market research and strategic planning firm. The survey is consistent
with a margin of error of plus or minus 1.6% 19 times out 20, but as a
non-probabilistic methodology was used a definitive margin of error
cannot be expressed.
About the CPA:
Payroll professionals in 1.5 million organizations across Canada are
responsible for ensuring the timely and accurate payment of $830
billion in wages and taxable benefits, $260 billion in statutory
remittances to the federal and provincial governments, and $90 billion
in health and retirement premiums, while complying with more than 191
regulatory requirements. The Canadian Payroll Association (CPA) has
influenced the payroll compliance practices and processes of hundreds
of thousands of employers since 1978. As the authoritative source of
Canadian payroll knowledge, the CPA affects the legislative processes
and practices of payroll service and software providers, as well as
hundreds of thousands of small, medium and large employers.
National Payroll Week (September 10-14, 2012) recognizes the
accomplishments of payroll professionals and the CPA by building
greater awareness of the size and scope of payroll and its impact on
employers, employees and government across Canada.
SOURCE: Canadian Payroll Association
For further information:
Kevin Gaudet 416-777-0368
Leslie Challis 416-767-0167