Is HR doing enough to prepare workers for retirement?

As Canada slips out of the top 10 countries for retirement security, an expert explains what employers need to do

Is HR doing enough to prepare workers for retirement?

An investment expert says Canada’s slide out of the top 10 countries on a retirement index shows employers, workers and the government could all be doing more to ensure retirees’ financial security.

Canada fell one place to 11th out of 43 countries in the 2017 Global Retirement Index, published by Natixis Global Asset Management.

While Canada performed well in financial stability and health expenditure, small declines in employment and income, and a slight rise in income inequality, saw it fall behind a Europe-dominated top 10.

Natixis’ Durable Portfolio Construction Research Center executive director David Goodsell says while government policy and regulation settings can best address those issues, employers and employers can also take steps to better prepare individuals for retirement.

“Employers play a critical role, so looking at what type of plan is available, is the match significant enough to ensure that individuals are participating,” he told HRD.

“Do you have features such as auto-enrolment, auto-escalation, that really make it easier and easier for that individual? And looking at the investment options is also a critical step: make sure it’s in tune with who your employee base is.”

Goodsell suggests employers and HR professionals could focus on educating employees about their retirement plan features, and engaging them by choosing plans that hold a particular appeal.

“We see a lot of younger investors [and] investors overall who want to have access to investments that match their values – so looking at ESG (environmental, social and governance) as an option to stimulate plan participation, and increasing contribution rates.”

With that information in hand, employees should be well-equipped to plan and save for their own retirement, Goodsell says.

“As for individuals, we look at it in terms of taking advantage of what’s available to you and the simple rule [is] starting early with a little bit is better than waiting until you’re older and trying to get a lot into that plan.”

2017 GLOBAL RETIREMENT INDEX (2016 results in brackets)

  1. Norway (1)
  2. Switzerland (2)
  3. Iceland (3)
  4. Sweden (5)
  5. New Zealand (4)
  6. Australia (6)
  7. Germany
  8. Denmark (12)
  9. Netherlands (8)
  10. Luxembourg (13)
  11. Canada (10)

 

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