According to a *2013 Sun Life Canadian Unretirement Index, five years ago, 51 percent of Canadians expected to be retired at age 66. Today, the numbers are about even at 27 percent who expect to be retired with those who plan to keep working doing so - at 26 percent - with the impetus for staying at work being driven out of 'need' as opposed to 'want'. With 63 percent of people saying they have to keep working either full or part-time beyond age 66, the gap has widened substantially in recent years.
The study also revealed that 32 percent of people anticipate working part-time at the age of 66. These numbers reflect a growing trend toward members who plan to delay retirement beyond their earlier expectations.
After the extreme economic downturn in the fall of 2008, the trend toward delayed retirement spiked. Even in the great nation of Canada where we witnessed less hardship and financial ruin compared to our cousins south of the border, our economy remains soft with no immediate signs of strengthening in the near future. The weakened fiscal landscape also plays a part in the "unretirement" of many Canadians.
Prior to 2008, Canadians worked beyond age 66 to keep mentally active and because they simply enjoyed working. Now, 25 percent people are working beyond age 66 to pay for basic living expenses as compared to 11 percent in 2008.
The study also indicated that 59 percent of working Canadians expect to retire with less than $250,000.00 in savings and 38 percent indicated that they will retire with less than $100,000.00 in savings.
Dealing with debt management and paying down credit card balances appears to supersede saving for retirement for many people who feel they will need to work beyond age 66. Staying healthy and being able to pay for medical expenses is just one more worry that is piled on their increasingly troubled financial plate. With these immediate debt management issues, ideas about saving for retirement don't get the air time they deserve. Yet it is not all gloomy as 30 percent of survey respondents reported discussing retirement plans with their spouse or partner. The Sun Life Canadian Unretirement Index also noted that 42 percent of people are investing in a personal registered account, 29 percent have met with a financial advisor and 22 percent have made automatic deposits to an RRSP.
Increasingly, plan sponsors continue to drive home the message that it is never to late for plan members to save for retirement. They also share that saving earlier is better in order to provide plan members with greater personal decision-making control over the situation they'll face when considering working beyond age 66.
There are many innovative ways to communicate messages to plan members regarding the importance of saving for retirement as well as understanding the value of good financial management practices. Please contact us for more information. We're here to help so that you can focus on what you do best.
*2013 Sun Life Canadian Unretirement Index
So much of what we hear in the news is about making sure we stay ahead of the curve and that we innovate. Whether personally or professionally, the pressure is real and many of us feel it expressed in the articles we read, in the shows we watch and from the people we meet.
Since drug plans make up between 60 to 80 percent of the cost of private health care benefit costs, there is no wonder so much focus is given to innovation in the arena of drug plan management.
This can be a complex topic of discussion, and in many cases the challenge involves communication - with a call to action that invokes the need for plan members to become smart healthcare consumers. There is great emphasis placed on the top 10 high-cost drugs and the associated impact to the plan. Should that be the main point of concern? We give great credence to generic drug plan substitution and managed formularies - all innovative methods to help manage the plans, but sometimes innovation takes the form of focusing on areas we have not paid much attention to previously.
There are obvious cost drivers as well as other triggers that seem to hover below the radar. Medication non-adherence is one of these 'below the radar' drug plan cost drivers. Non-adherence occurs when plan members don't follow the recommendation of a health care provider regarding the prescription medication or don't follow a recommended diet or lifestyle change.
When a plan member doesn't adhere, the cost to the plan is two fold: increased drug costs and a negative impact on the plan member's health. In a previous blog post, I addressed the topic of complex chronic diseases and the role it plays in benefit plan management. What happens when a plan member with a complex chronic disease does not adhere to his medication? In Green Shield Canada's 2012 Drug Study, almost 40 percent of plan members with high blood pressure are non-adherent. The same goes for plan members with high cholesterol. What is the cost to the plan? Non-adherence in these two examples alone cost a plan 3.5 times as much as those without the condition.
As the workforce ages and Baby Boomers (born between 1946 and 1964) face headlong into the path of retirement, we'll experience an increase in chronic diseases. As per a U.S. National Medical Expenditure Panel Survey, the number of people with chronic diseases is projected to reach 171 million by the year 2030. The potential cost to the plan becomes easier to see as the expected numbers of plan members with a chronic disease increase exponentially.
In the world of benefit plan management, we are challenged to address this situation from a holistic approach. For a plan member who is trying to change to a healthier lifestyle, should it just be the pharmacist's duty to support the change or should it be all the players involved as part of a new healthy lifestyle entourage? What about the Employee Assistance Provider or the Case Manager helping the plan member successfully and safely stay at work?
Innovation is key to helping proactively manage drug plan costs, but there are other areas to explore - medication non-adherence and the role of all stakeholders in the drug delivery model are important components to ensuring the health of the plan member as well as the health of the benefits plan.
Staying ahead of the curve in the world of drug plan management can be complex. Please contact us to discuss this and other topics related to your benefits plan. We are here to help so that you can focus on what you do best.
Dave Dickinson, B.Comm, CFP, CLU, CHFC
Experienced Benefits Specialist ready to optimize your group benefits and pension plans.