This autumn we enjoyed connecting with you at our annual WP Fall Roadshow. Expanding on our June Conference, we engaged with a variety of concepts around emotional and financial wellbeing including pension updates, benefits matters, financial archetypes, and market trends. Here’s a recap of our important and insightful conversation.
The Retirement Landscape
According to this year’s Benefits Canada’s 2024 CAP Member Survey, significant negative impacts on Canadians’ ability to save and manage the cost of daily life are threatening their retirement preparedness. A quarter (26%) of unretired Canadians expect to continue working in retirement to support themselves. Half (49%) haven’t set aside any money for retirement in the last year; 43% say they have enough to set some savings aside. Cost of living is the top concern for Canadians (70%), followed by inflation (63%), and worries about government cuts to social services (61%).
For First Nation communities, there are some very important differences. First, not all First Nations' people contribute to CPP. This is especially true for elected officials, who often serve many council terms without any pensionable years. Second, not all First Nations have implemented private pension plans. And third, home equity – often done during retirement years, reverse mortgages or downsizing aren’t usually possible in First Nation communities.
As well, for the first time in history, there are five distinct generations in the workforce – Gen Z, Millennials, Gen X, Baby Boomers and the Silent Generation. As Baby Boomers pass and younger people enter the workforce, the concept of “retirement” has measurably changed.
Today, three quarters (74%) of Canadians aged 24 to 44 view the conventional retirement approach as outdated. Millennials will not be retiring at the same time or in the same way as current retirees. To them, retirement is not a fixed age, and for some, suggests waning energy or ability. As such, the concept of the “new retirement” has evolved in recent years and includes the ideas of ‘starting older’ and possibly deferring retirement.
At WP, we’re recalibrating how we engage younger generations and structuring our processes to relate to all generations, not just those who see retirement as an absolute event in time. We’re here to support you and your staff with employee engagement that reflects and honours the changing tide. Our desire to help will continue to manifest by honouring generational, emotional, and knowledge-based differences in psychologically safe environments.
Financial Wellness
We know that one of the top sources of stress for employees is personal finances (43%, up from 35% in 2022). And emotional stress, financial or otherwise, is one of the leading causes of disability claims. Emotional/mental health is the top area of benefit plan investment (57%), with financial health following at 30%. Mental health-related absences represent about a third of LTD claims – the fastest growing claim type, with an increase of 53% for STD and 70% for LTD claims (SunLife).
Fortunately, psychological patterns and financial behaviors are significant determinants of our financial wellness. Understanding one’s behavior is key and one way to do this is by exploring your financial archetype. Helping to explain what drives financial behaviors and habits, archetypes can help us understand how we think, feel, and behave with money. Once we’ve unpacked our natural financial habitats – patterns, attitudes, tendencies and beliefs surrounding money – we’re better able to address and deal with stressors.
Capital Accumulation Plan Guidelines – New and Amended
A capital accumulation plan (CAP) is defined as: a tax-assisted investment or savings plan/program that allows its members to make decisions among two or more investment options selected by the CAP sponsor. Modernized in 2024, the guidelines reflect best practices that have evolved over the last two decades. CAP sponsors are expected to apply them as soon as possible, and any system or process changes need to be implemented by January 1, 2026.
The updated guidelines provide CAP sponsors with a more comprehensive tool kit to help define the purpose of their CAP, make outcome-based decisions, and establish a robust governance framework. The focus on member responsibilities and education has shifted beyond enrollment to an ongoing strategy with an emphasis on periodic reviews, and advice shifting to ongoing financial planning.
Pension Plan Engagement
When it comes to engagement, most participants feel detached from their pension and have little to no sense of ownership towards it. To help increase engagement – and better outcomes – it’s crucial to build member understanding and knowledge about their pensions and to encourage them to make active decisions throughout their plan’s lifetime. And for employers the benefits are clear: recruitment and retention advantages and higher levels of employee wellbeing.
At WP, we offer free one-to-one pension consultations where members can discuss: their personal goals for retirement, current investments, beneficiaries, retirement options and process, tax exemption of their pension benefits and tax return filing. As well, our experienced Retirement Transition Team provides a holistic approach to financial planning. Individual Financial Services include: personalized investment advice, pension consolidation, regular market updates, and extensive knowledge on tax-exemption, retirement income projections, budgeting and financial wellness education.
Group Benefits: Checklist & Best Practices
Employee benefits plans are complex and highly reliant on the accuracy of information. It’s important to review them to ensure information is up to date as the best way to save yourself time, money, and potential risk. We created a checklist to take you through the most common day-to-day tasks of a group insurance plan administrator and to help you audit plans to ensure accuracy. To receive a copy of the full checklist, please reach out.
Plan Administrator’s Checklist – Employee Audit
- Enrollment – confirm all eligible employees and their dependents are enrolled in the plan
- Updating Employee information – confirm all employee information is up to date
- Beneficiaries – confirm all beneficiary information is up to date as per enrollment forms
- Employee waivers of coverage – confirm all waivers have been applied
- Ineligible employees and dependents
- Invoicing and payments
- Other considerations – excess coverage and optional benefits
- Life Events
Year-End Market Review
What’s in the future for investors? Nobody knows for certain. Solid investment opportunities will continue to reveal themselves, with minimal volatility periods, pullbacks and dips, and a drop in inflation, followed by, perhaps, a further decrease in interest rates. Currently, inflation is down to 1.6% with interest rates at 3.75%.
The results of the US presidential election have minimally altered the stock market in the short term, but they usually aren’t a game-changer. Once the United States gets through the election transition, any volatility in the market will likely stabilize. Do expect pullbacks and corrections, but market dips present good buying opportunities. It’s unlikely that there will be a stock market crash in this calendar year.
That’s a wrap on WP’s Roadshow for 2024. Thanks to everyone who attended and congrats to our prize winners!
Sudbury
Dan of Beausoleil First Nation won an Amazon Fire HD 8 Tablet! Jean of Constance Lake First Nation and Susy of Whitefish Lake First Nation won Cheekbone Beauty Cosmetics gift bags!
Burlington
Jim of Chippewas of the Thames First Nation was the winner of the Amazon Fire HD 8 Tablet! Alexandra of Grand River Employment & Training Inc. and Ronald of the Ogemawahj Tribal Council won gift bags from Cheekbone Beauty Cosmetics!
Note: The information contained within this blog is for informational purposes and is meant to be used as a guide only. It does not constitute recommendations or other advice regarding legal, business, or other decisions. If you have any questions or concerns, please reach out.
Land Acknowledgement
We respectfully acknowledge that we live, work, and volunteer on the Treaty Lands and Territory of the Mississaugas of the Credit. Burlington, as we know it today, is mutually covered by the Dish with One Spoon Wampum Belt Covenant, an agreement between the Iroquois Confederacy, the Ojibway and other allied Nations to peaceably share and care for the resources around the Great Lakes.
From the Anishinaabeg to the Haudenosaunee, and the Métis – Indigenous Peoples who are our leaders, neighbours, and co-workers – WP Pensions + Benefits offers gratitude and respect. Our work is not possible without the generations of Indigenous people who came before us and continue on this shared journey towards truth and reconciliation.
WP Pensions + Benefits works to hold brave space where everyone feels welcomed, included, and heard.
