Employee perceptions of financial health and retirement readiness not lined up with reality: Aon survey
Survey of 1,000-plus employees finds optimism out of sync with savings
TORONTO (May 6, 2019) – Aon plc (NYSE:AON), a leading global professional services firm providing a broad range of risk, retirement and health solutions, today released its Global DC and Financial Wellbeing Employee Survey. A key finding: Canadian workers who participate in Capital Accumulation Plans (CAP) such as Defined Contribution pension plans (DC) and group Registered Retirement Savings Plans (RRSP) are confident about the state of their finances and say they understand money matters, but many find it hard to save for retirement and are worried about having enough money to retire. The survey found fewer than half of employees have a goal for retirement savings and, depending on other sources of income, many might find their current plan contribution levels are inadequate to ensure their total income needs in retirement.
“The good news is that the employees in our survey identified saving for retirement as a top priority and participation rates in workplace retirement plans are high, but we also found that workers are having real challenges being able to afford to save more,” noted one of the report’s authors, Rosalind Gilbert, Associate Partner in Aon’s Vancouver office. “An even more fundamental issue, however, is the lack of planning and knowledge around retirement savings and income – which is a big call to action for employers, who need to do more to educate members, provide access to financial services and equip them with holistic strategies for retirement readiness.”
- Of the 1003 Canadian employees who responded to the survey, few view their current financial situation negatively; even among lower-income employees, only 27 percent rate their financial condition as poor.
- Most CAP members say they understand money matters and keep informed on financial issues, and they rank saving for retirement as an important priority.
- However, across all age groups – early career, mid-career, and those approaching retirement - employees identified their biggest challenge as being able to save more, and over half say they are worried they won’t have enough saved to be able to retire when they want. The majority of respondents is also concerned that they will outlive their savings.
- Only two in five surveyed plan members have set a goal for retirement savings, and almost half say outstanding debts are preventing them from saving for retirement.
- Of those who expect to fully retire, two-thirds expect to do so by age 66, but 30 percent expect to continue working forever.
- Most employees surveyed participate in their workplace Capital Accumulation Plan, but their retirement savings are often not fully optimized:
- Two in five who are in employer-matching plans are not taking full advantage of employer-matching contributions.
- One in five don’t know how much they or their employers contribute.
- Most employees are contributing less than 10 percent of their salary to their CAPs.
- Employees say they are interested in receiving more support from their employers in a range of financial areas, including saving for retirement, insurance and planning.
Read the full Canadian DC Report here.
For further information please contact the Aon media team: Alexandre Daudelin, +1.514.982.4910.