The Future of Pensions

Prepared for
CUPE and PSAC
October 2010
 Future of Pensions

•
National Public Opinion Survey
–
Commissioned by CUPE and PSAC
–
2,020 adult Canadians surveyed by telephone, August 6
to 28
–
Margin of error +/- 2.2 percentage points at the 95%
confidence level

ENVIRONICS 2
 Support for increasing CPP benefits is
widespread

Support for increasing CPP benefits

Byincome 2010
Total 37 41 10 7 6

<30K 38 40 8 5 9

30to 60K 41 41 8 55

60to 80K 38 42 9 73

80to100K 36 45 9 82

100K plus 35 36 15 10 4

Stronglysupport Oppose dk/na

Support Stronglyoppose

Q. Recently there has been talk about expanding the CPP to help people save more for retirement. The CPP
covers almost all workers. The amount that individual workers and employers pay into the plan would increase
slowly over the next several years to provide higher retirement benefits from the CPP. Generally speaking do
you support or oppose increasing Canada Pension Plan benefits? Is that strongly or somewhat?
ENVIRONICS 3
 Rate of changes to Canada’s pension
system felt to be too slow

Rate of changes to Canada’s pension system

By age 2010
Total 6 20 50 2 22
18 to 29 9 25 40 1 25
30 to 39 7 19 46 3 26
40 to 494 18 52 3 23
50 to 59 5 18 55 2 20
60 plus4 20 56 2 17

Too fast Too slow dk/na

Just right Not aware of changes

Q. As far as you know, are policy-makers moving too fast, too slow, or at the right pace in their efforts to deal
with changes to Canada’s pension system?

ENVIRONICS 4
 More than half think OAS and GIS too
low
OAS and GIS
By age 2010

Total3 35 56 5

18 to 293 55 40 2

30 to 392 31 59 7

40 to 49 5 34 56 5

50 to 592 25 68 4

60 plus3 30 59 8

Too high Just right Too low dk/na

Q. Some senior citizens currently receive little or no CPP benefits due to a lack of participation in the workforce.
These people typically receive an old age security pension and a guaranteed income supplement – referred to
as OAS and GIS. People receiving the OAS and GIS receive an average of about $11,000 per year. In your
opinion is this amount too high, too low, or just about right?

ENVIRONICS 5
 Large majority support increasing OAS
and GISto OAS and GIS for those living
Increase
belowpoverty line
By age 2010

Total 61 20 7 6 5

18 to 29 53 26 10 8 2

30 to 39 60 23 10 43

40 to 49 58 23 7 6 6
Q. It is estimated that
approximately 200,000
50 to 59 65 18 6 5 5 Canadians live only on the OAS
and GIS and are below the
poverty line. Knowing this, would
60 plus 69 13 2 7 9 you support or oppose increasing
the payments to these senior
citizens? Do you feel strongly or
Support – feels strongly Oppose – does not feel strongly
not? dk/na
Support – does not feel strongly Oppose – feels strongly

ENVIRONICS 6
 Most savers use RRSP and/or TFSA
Have RRSP or TFSA
By income 2010

Total 51 6 29 131

<30K 37 4 13 443

30 to 60K 54 8 16 21

60 to 80K 50 10 27 11 2

80 to 100K 65 5 291

100K plus 48 3 39 91

RRSP Both dk/na

TFSA Neither/none

Q. Do you have a registered retirement saving plan/RRSP or a tax free savings account/TFSA?
Subsample: Not retired/saving for retirement

ENVIRONICS 7
 A substantial minority are not saving
towards
retirement (% No)

72

43
37
32
27
17

Total <30K 30 to 60 to 80 to 100K

60K 80K 100K plus

Q. Are you personally saving for retirement ?

Subsample: Not retired

ENVIRONICS 8
 …primarily because they cannot afford
it
Can’t afford/don’t have money 74

Not worried about retirement9

Not thinking about retirement/

6
still young/other priorities

Don’t need to save/

4
have pension at work

Already old/retired/
semi-retired
1

Need information1

Other 6

dk/na 3

are some of the reasons why you are not currently saving for retirement [IF HAVE PENSION: outside of your pension]?
ple: Not retired and not saving for retirement

ENVIRONICS 9
 More than half of Canadians say their
income is not always sufficient to
cover essentials

44 41 41
2001 2010
32
21
15
2 n/a 1 3
Always Often Rarely Never dk/na

Q. Thinking about your household expenditures on essentials (rent or mortgage payments, utilities, or food and
clothing), would you say your current household income is always sufficient, is often sufficient or is rarely
sufficient to meet these essential expenditures?

ENVIRONICS 10
 Canadians tentative about ability to
save for retirement
Confidence in retirement saving
By age 2010
Total 25 42 20 12 1

18 to 29 33 44 14 71

30 to 39 25 39 24 10 1

40 to 49 17 42 23 16 1

50 to 59 23 41 23 13 0.5

60 plus 24 40 16 16 4

Very confident Not very confident dk/na

Somewhat confident Not at all confident
Q. Thinking about your financial future, how confident are you that you will be able to save enough to
support yourself in retirement? Are you very confident, somewhat confident, not very confident or not at
all confident?

Subsample: Not retired

ENVIRONICS 11
 Four in ten expect to work in
retirement
Likelihoodof havingtoworkafterretirement
Byage 2010
Total 9 33 38 15 5

18to29 5 23 53 14 4

30to39 11 35 37 13 4

40to49 11 40 30 15 5

50to59 9 37 34 15 5

60plus 14 28 29 21 8

Definitely Probablynot dk/na

Probably Definitelynot

Q. And do you think you will definitely, probably, probably not or definitely not have to work once
you have retired?
Subsample: Not retired

ENVIRONICS 12
 But two-thirds expect to live
comfortably in retirement
Will have enough to live comfortably
during retirement
By income 2010
87
74
68 64 68

42

Total <30K 30 to 60 to 80 to 100K

60K 80K 100K plus

Q. Do you think that you will, or will not have enough to live comfortably during retirement, even if you
can’t live exactly as you do now?
Subsample: Not retired

ENVIRONICS 13
 Most Canadians expect to retire at age
60 or older
Mean
Expected retirement age
By age 2010
Mean
Total 1 18 66 4 11 62.8

18 to 292 23 62 3 10 60.6

30 to 392 21 63 3 11 62.0

40 to 491 19 67 4 9 62.9

50 to 59 15 70 4 11 64.6

60 plus 3 72 10 15 68.4 0.5

18 to 49 60 or older dk/na
50 to 59 Never

Q. At what age do you expect to retire?

Subsample: Not retired

ENVIRONICS 14
 “Ideal” retirement age somewhat
younger
Mean
Total 2 32 59 1 5 59.7

18 to 29 3 34 5912 58.8

30 to 39 2 38 5315 58.9

40 to 49 2 34 57 1 6 59.3

50 to 59 1 27 6615 60.7

60 plus 3 10 70 5 12 64.9

18 to 49 60 or older dk/na
50 to 59 Never

Q. What do you think would be the ideal age to retire?

Subsample: Not retired

ENVIRONICS 15
 Retirement meets expectations for
most
Enjoyment of retirement
By income 2010

Total 24 54 193

<30K 14 50 323

30 to 60K 25 59 151

60 to 80K 25 65 8 2

80 to 100K 36 58 42

100K plus 50 37 11 3

More than expected Less than expected

As expected Depends/dk/na

Q. Are you enjoying retirement more than you expected, less than you expected, or about the
same as you expected?
Subsample: Retired

ENVIRONICS 16
 Three in ten retirees living very
comfortably
Financial comfort
By income 2010

Total 31 56 6 53

<30K 14 55 14 133

30 to 60K 31 63 5 1

60 to 80K 34 66

80 to 100K 53 43 4

100K plus 57 43

Living very comfortably Living not very comfortably dk/na

Living somewhat comfortablyLiving not at all comfortably

you say in terms of your financial situation, you are living very, somewhat, not very or not at all comfortably?
le: Retired

ENVIRONICS 17
 Most rely on a mix of retirement
income sources
Sources of retirement income
2010
Canada Pension Plan/ 55
other government pension 72
54
RRSP/TFSA
30
38
Other savings/investments
34

Company/private 36
pension plan 42
2
Other
Q. Retired: What are your 5
current sources of retirement
income? 5 Anticipated – not yet retired
Q. Not retired: When you retire, dk/na
on what sources of retirement 3 Current – already retired
income do you plan on relying?

ENVIRONICS 18
 Among those with RRSPs, the majority
are not fully clear on how investment
management
By income fees work
2010
Total 29 50 201

<30K 13 50 36

30 to 60K 16 57 25 2

60 to 80K 25 49 25

80 to 100K 29 52 163

100K plus 37 46 16 0.5

Definitely understandDo not really understand

Understand somewhat dk/na

Q. To what extent do you understand the fees charged by financial institutions in relation to retirement
savings plans, would you say you definitely understand them, understand them somewhat, or do you not
really understand?
Subsample: Not retired and have a registered savings plan (RRSP/TFSA)
ENVIRONICS 19
 Type of pension held is at odds with
preferences

68
Actual
Preferred
42 39

22 20
10
Fixed amount/ Benefits vary/ dk/na
defined benefit
defined contribution

Q. Is your company pension the type that guarantees you a fixed amount of benefits when you retire, known as
a defined benefit pension? Or is it one where the amount of benefits you will receive will vary depending on
how well the pension fund investments perform, known as a defined contribution pension?
Q. In your view, which of these two types of pensions is preferable, defined benefit, which pays a fixed amount
when you retire, or defined contribution, where the amount of benefits received varies depending on the
performance of the fund?

Subsample: Not retired, has a company or private pension plan

ENVIRONICS 20
 Confidence in the stability of private
pension plans high
I am confident my pension fund will be
able to pay my benefits when I retire
2010

44

25
8 5
13 4

Strongly agree
SomewhatNeither agree
Somewhat Strongly dk/na
agree nor disagreedisagree disagree

Q. Please tell me whether you strongly agree, somewhat agree, neither agree nor disagree, somewhat disagree,
or strongly disagree with the following statement: I’m confident my pension fund will be able to pay my benefits
when I retire.

Subsample: Not retired, has a company or private pension plan

ENVIRONICS 21
 Less confidence that government will
step in if pension plan in trouble

a private pension plan got into financial difficulty,

m confident the government would step in to prevent
members from losing their benefits
2010

30
24 26
8
3
9
Strongly agree
SomewhatNeither agreeSomewhat Strongly dk/na
agree nor disagree disagree disagree

Q. Please tell me whether you strongly agree, somewhat agree, neither agree nor disagree, somewhat disagree,
or strongly disagree with the following statement:If a private pension plan got into financial difficulty, I'm
confident the government would step in to prevent members from losing their benefits.
Subsample: Not retired, has a company or private pension plan
ENVIRONICS 22
 Few consider public sector pensions
too high
Typical public sector pension
2010

62

15 18 5

Too high About right Too low dk/na

Q. A typical public sector employee who worked for 30 years would receive a pension of approximately $18,000
per year, in addition to CPP. In your view is that too high, too low, or just about right?

ENVIRONICS 23
 Tony Coulson
Vice President
Environics Research Group Ltd.
tony.coulson@environics.ca
613-230-5089

www.EnvironicsResearch.
Environics
© Proprietary research by Environics Research Group
ca 24