Rising number of defined contribution pension plans and group RRSPs
drives need for easy-to-understand statements that provide actionable
MONTREAL, Jan. 5 /CNW Telbec/ - Nearly half of Canadians (44%) with a
group savings and retirement plan do not know what their future
retirement income will be, and 41 per cent are unaware if their current
rate of retirement saving is on target to meet their future income
needs, according to a new Ipsos Reid survey conducted for Standard
The poll found that 87 per cent of Canadians with workplace retirement
plans rarely or never make adjustments to their retirement investment
portfolio based on information contained in their financial statements.
Only 22 per cent of group plan members surveyed gave their statement a
high grade for clarity and an appropriate level of detail.
The study also revealed that workplace retirement plan statements are
not widely used because they are hard to understand and lack
personalized recommendations and specific suggestions to improve
retirement income. Most plan members surveyed (72%) also believe their
statement contains insufficient information upon which to base a change
in their retirement planning.
Survey highlights: the most common complaints about employer retirement
36 per cent of workplace retirement plan members feel their statement is
either difficult to understand or too technical
Nearly a quarter (24%) believe their statement is boring, and
21 per cent of those workplace retirement plan members surveyed find the
information irrelevant because they are not yet thinking about
How long and how thoroughly do members review their employer-sponsored
Majority either "skim over" their statement (49%) or ignore it all
62 per cent spend 10 minutes or less reviewing their statement
Only about a third (31%) have arranged to have professional help to read
"What this research is saying is that the status quo is not working, and
action is needed to make group savings and retirement statements more
relevant and effective for retirement planning purposes," says Anna del
Balso, Assistant Vice-President, Research and Intelligence at Standard
Life. "The financial services industry faces a clear communications
challenge to fashion easily understood statements that inform, engage
and, when necessary, provoke a change in direction."
Providing clarity and actionable recommendations is particularly
important for defined contribution plan members who are responsible for
their own retirement income planning. Today 3.3 million Canadians or
over 40 per cent of those with group pensions are covered by workplace
defined contribution plans or group RRSPs, and that number is expected
to rise in the future.
Standard Life recently announced changes to the way it presents
information to workplace retirement plan members, and its redesigned
statement received the "excellent" designation in DALBAR's latest Trends and Best Practices in Defined Contribution Pension Plan
Statements report. "Our statement provides personalized suggestions so that plan
members can answer three fundamental questions: How am I doing? Am I on
track? What could I do to reach my retirement goals?," added Ms. del
Balso. "Our objective in making these changes is to help Canadians take
a more active role in their retirement planning."
The Workplace Retirement Plan Reporting survey, conducted by Ipsos Reid
for Standard Life, interviewed a national sample of 1,371 adults from
Ipsos' Canadian online panel between November 3 and 9, 2010. Weighting
was then employed using census data to balance demographics and ensure
that the sample's composition reflects Canada's adult population. A
survey with a random probability sample of this size and a 100 per cent
response rate would be considered accurate to within ± 2.6 percentage
points, 19 times out of 20.
About Standard Life
Standard Life plc is a leading long-term savings and investments company
headquartered in Edinburgh, Scotland. Standard Life has around 10,000
employees; operates in the United Kingdom, Europe, North America and Asia Pacific,
and globally with Standard Life Investments; and serves over 6.5
million customers worldwide.
In Canada, Standard Life has been doing business for over 175 years.
Standard Life Financial Inc., which wholly owns The Standard Life
Assurance Company of Canada and Standard Life Mutual Funds Ltd., is
Standard Life plc's largest operation outside the UK. With over 2,000
employees, it provides long-term saving, investment and insurance
solutions to more than 1.3 million Canadians, including group insurance
and retirement plan members.
As of September 30, 2010, Standard Life plc had C$311 billion in assets
under administration, including C$38.2 billion in Canada through
Standard Life Financial.
Notes to editors:
SOURCE STANDARD LIFE
For further information:
Assistant Vice-President, External Communications and Public Affairs
514-499-7999 or 1-877-499-9555, ext. 4600