April 2, 2018 marks another Employee Benefits Day. It has been almost a decade since the International Foundation of Employee Benefit Plans (IFEBP) first introduced this special day for industry professionals. As per the IFEBP, it is a day to recognize trustees, administrators, benefits practitioners and professional advisors for their dedication to providing quality benefits and the important role they play in their colleagues' well-being.
The Theme of Behavioural Economics
This year, Employee Benefits Day brings attention to the topic of behavioural economics and driving better employee decision-making. Specific to benefits and financial wellness, understanding how social and emotional biases influence employees is a key learning tool for benefits and retirement planning practitioners.
In essence, the more that is known about behavioural economics and decision-making bias, the better positioned plan sponsors will be to develop and enhance plan designs that help employees improve their finance and health outcomes.
Addressing Irrational Decision-making
Although we'd like to believe that we all make sound and rational decisions, the reverse is often true. Yet, many benefits and retirement services practitioners craft communications as if those reading their messages have a keen interest as well as at least moderate to high knowledge of the subject. Experience, statistics and behaviour patterns show us that we have a greater tendency of making decisions like Homer Simpson rather than Albert Einstein.
If we want better results, it's time to take a closer look at how behavioural economics can help us. While it remains a relatively new science that marries psychology and economics, people's behaviour and inherent decision-making patterns have been fairly easy to predict over time. Yet we continue to make assumptions about employee actions that aren't correct. Although we might not like to believe it, it's more common than not for people to make decisions without considering if its actually in their best interest.
Unconscious Decision-making Bias
Over the years, I've written a great deal about saving for retirement, debt-management and the value of financial planning. As we unpack key elements of behavioural science, its important to examine the effects of unconscious decision-making bias. To help positively sway plan participant actions, here are some decision-making biases to pay attention to:
1) Choice Overload: if there are too many choices, it can stop one's decision-making ability and cause the employee to choose the default option.
2) Illusions of Control: People overestimate that their choice will generate a specific result. Example - if I buy a lottery ticket, I'm going to win. For savings and investment products, the plan member believes they will make better investment decisions on their own rather than with the help of an investment manager.
3) Inertia or Status Quo: People don't like change. The brain thinks of change as pain and seeks to avoid it. When it can't predict the outcome, the brain prefers the status quo as no change is a "reward" not a threat. For savings and investment products, this effect may show up as the decision to remain in the plan's default option.
4) Loss Aversion: People fear loss more than the potential for gain and may consider contributing to a pension plan with contributions taken from their pay seen as a takeaway rather than considering the upside of gaining employer contribution matching.
5) Unrealistic Optimism: This effect plays out when people believe that bad things happen to other people. They don't happen to them. Similar to the illusion of control bias, people believe that if they choose their investments, it will yield stronger outcomes because they are in control of making the investment choice.
Employee communication continues to be a barrier for positive plan results. Why not give consideration to the theories of behavioural decision-making and see if changes the actions employees take have a more favourable conclusion. So on my Resource Page, I've made available the following articles:
1) Stanford Center on Longevity: A toolkit series brief - 10 things you should know about psychological science and behavioural economics to improve financial and health outcomes with employees and customers and;
2) Stanford Center on Longevity: A toolkit series brief - The MORE Design.
3) Benefits Magazine: Designing and Communicating Retirement Plans for "Humans".
Beyond these applicable resources, we invite you to contact us to discuss ways we can apply behavioural economics to strengthen your benefit and retirement program goals. As always, we're here to help so that you can focus on what you do best.
For some, it is the most wonderful time of the year while for others, it is a time of stressful worry and silent fretting. Media channels depict merry-goers rejoicing and spreading good cheer, but they fail to show the worry many experience after all the gifts have all been unwrapped and the stress of uncertainty sets in -- will there be enough money to cover the costs of all the holiday purchases?
How much do we spend this time of year?
According to CPA Canada, Canadians, on average, spend $766 on holiday gifts. Many spend well over $800 and too few set aside funds to cover their holiday purchases. As per CPA Canada, 61 per cent of those surveyed did not budget for the season.
Making the most of buyer's remorse
After the merriment of December dissipates, January's cold reality makes it stark appearance with the arrival of the previous month's credit card statement. Once the decorations are put away and the holiday parties are over, the season's frenetic pace is often replaced with pangs of guilt associated with buyers remorse. We ask in disbelief as we painfully peruse our credit card balance. "Did I really need all that stuff?"
Given many are faced with paying off holiday debts, it may seem like there couldn't be an appetite for information about debt management or ways to save more. For employers, the new year creates a prime opportunity to reinforce messages related to financial education, budgeting and debt management.
Employer Matching -- don't leave money on the table!
Consider January as a month to dial up pension plan communications and reinforce the value of "free money" employers offer through employer matching. Messages that remind employees about ways to harness the full value of their employer's matching contribution arrangement demonstrate the employer's role in helping them save even more.
Just-in-time communications can create a powerful impact especially at a time when employees might feel more confused or stressed about their financial situation. For many, January is seen as a new beginning offering a clean slate. Why not use it to help employees develop healthy saving tactics as part of their new year's resolution? Consider introducing financial education sessions early in the year that address ways to pay down debt while explaining how it is possible to also participate in the company's pension and savings plans.
Seek feedback about your benefits program
As workforce demographics shift from being heavily weighted with Baby Boomers to the now burgeoning influx of Millennials and Generation Z (those born after 1995), consider soliciting feedback from these cohorts.
- What is it that they really value from a benefits program?
- Are they worried about how long it will take them to pay off student loan
- Are they even remotely interested in saving for retirement or does that seem like so far off in the future that it isn't even on their radar?
- What do they know about the current programs?
Surveys show that when employees are stressed about their finances, they are more distracted at work, take more time off to deal with their financial concerns, and are absent more because of stress-related issues.
Don't assume employees know the details of what is offered in the benefits and pension or savings plans. For example, employee assistance programs that offer financial counselling might come in quite handy as the bills roll in, but how many employees know that this service exists?
Prevention is key. Provide financial education even if the need for it isn't discussed openly around the water cooler. Talking about money woes may be considered rude or even a social taboo. In fact, a survey by Fidelity reported that 43 per cent of respondents didn't know how much their spouse earned and 36 per cent weren't aware of the amount they had invested.
Employees may prove to be more willing to share their interest in financial education via an anonymous survey than they would discussing it directly with their manager or in a team setting. Look for ways to share what's available to them through their pension and savings plans as well as other free community resources. There is no downside to making available information that reduces stress and allows employees the ability to more fully focus their attention on giving their best at work.
For more ways to promote financial literacy, pension and savings communications, we invite you to contact us. We're here to help so that you can focus on what you do best.
Along with ushering in fall and a new school year, September is an ideal month to revisit your company's benefits philosophy. Better yet, if you don't already have one, it is the perfect time to prepare a benefits philosophy.
What is a benefits philosophy?
It is your company's approach to how you make decisions about specific details related to benefits coverage. It outlines how a business chooses and provides benefits to employees.
So much is changing in the workforce and with greater speed than ever before. It has become increasingly challenging to keep up with the latest benefit trends, workforce demands, and recruiting efforts to attract and keep top talent. Ensuring that you are able to offer a competitive benefits package that meets your organization's goals is more important than ever.
Many employers have a documented vision and mission statement and some have taken further steps to identify a purpose statement. These statements guide the organization's goals, beliefs and desired behaviours. Employees are reminded of these statements as a way of fostering the company's sought after culture and conduct traits. It helps them understand why the company exists and the direction they're headed.
A benefits philosophy should align with the vision and mission statement. More specifically, it should ladder up to the company's compensation philosophy. A benefits philosophy is a formalized way of creating a vision and mission statement about benefits coverage.
Do you offer pet insurance? How much is too much coverage? Are you going to continue with or grandfather retiree benefits? What is your company's position on fertility drugs or the request to offer a group RRSP? All these questions and more should be easier to answer when a benefits philosophy is in place.
Why should you have a benefits philosophy?
No matter the size of your business, having the guiding principles outlined in a documented benefits philosophy helps with the myriad of decisions you may think you'll never need to consider. It also makes it easier to address plan design and cost considerations. When a benefits philosophy is firmly in place, it helps a company avoid reactive decisions that might seem self serving and generate negative employee perception and/or public opinion.
10 Questions to Consider
This list of questions is by no means complete, but should provide a basis for many of the questions a benefits philosophy may wish to address.
1) Who pays for coverage? Do employees pay for a portion or all of specific types of coverage?
2) Is our coverage out of step with key competitors?
3) Does our coverage meet the needs and wants of our employee population?
4) Should we offer the same coverage for all or create separate classes based on differentiation that matters to our workforce?
5) Do we offer benefits to care for the well-being of the employee and his/her eligible dependents? Does this include Long-term disability or critical illness benefits?
6) What is is our position on retiree benefits?
7) Do we offer a wellness program? EAP? Fitness subsidy? Employee discount program?
8) Are we concerned about the employee's financial health? Do we offer a company savings program?
9) How much should the benefits program influence productivity and employee engagement?
10) Does our benefits plan help to keep costs down? Do we offer a health care spending account or some form of employee cost-sharing?
Your benefits philosophy should help you answer key questions related to your benefits strategy and it needs to support your company's goals and values. Knowing the benefits coverage that makes your employee happier and keeps them productive and engaged can be influenced by what an employer chooses to offer. This offering should be guided by your benefits philosophy.
There are many questions to consider that really depend on your goals. With three decades of industry experience, our team is well positioned to help you create or revisit a benefits philosophy that is exactly right for you. We invite you to contact us because no matter the size of your company or type of industry you are in, we're here to help so that you can focus on what you do best.
Monday, April 3, 2017 is National Employee Benefits Day. It is a day that was introduced by the International Foundation of Employee Benefit Plans eight years ago. Over time, employers, administrators, trustees, and service providers throughout North America began embracing the idea of celebrating a day for employee benefits recognition. After all, isn't increasing awareness and appreciation of employee benefits an ongoing goal for anyone working in the benefits industry?
Communication is the Word.
This year's theme is "Benefits Communication". For everyone's ease of reference, the IFEBP aggregated all of their content related to employee benefits communication into one website.
On April 3, the IFEBP will be offering a free webcast: Making the Connection: How to Make Your Benefits Communications Work. This webcast is open to members and non-members alike. They've also created checklists and sample communication materials to support the work being done to ensure the health and financial security of workforces in Canada and the US.
Over the years, we've shared a lot of information, tips and resources to support employee engagement, productivity and benefits appreciation. Guided by over a quarter century of experience in employee benefits, we know that communicating effective can help effectively reduce the cost of group benefits by as much as 20 percent (source: McKinsey& Company)
Is a rebranding of the benefits message necessary?
Communicating well about a benefit program also helps with employee attraction and retention efforts. If, and when, there are engagement issues, simply throwing more dollars at the benefit program might not be the solution. First, look at how the messages about the benefits offering are communicated and consider if more of a marketing or rebranding exercise is warranted. Perhaps there are other communication methods better suited to a particular workforce or a specific demographic within it.
Benefits are only good if they are valued.
Benefits, as good as the design was intended to be, are truly only great if they are understood, valued, and meet employee needs. Really knowing your workforce demographics and asking the tough questions to determine if you are properly and effectively reaching your audience is helpful.
Ask yourself or your communication team:
Many employees continue to generate employee survey results revealing that poor communication acts as a barrier to employee engagement and unfortunately, the trend for success in this area isn't where employers or employees need it to head.
We work with our clients on benefit program design and communication efforts that everyone can be proud of. We understand that clear and simple messages help tell outcome-based success stories and also speak to the motivating influencers that happen during an employee's life journey. The right message at the right time for the right audience builds employee benefit program awareness, understanding and value.
It is an ongoing exercise in strategic thinking, consistency and transparency, but one that is worth the effort in the short and long run. We invite you to contact us for ways to celebrate Employee Benefits Day. We're here to help so that you can focus on what you do best.
Registered Retirement Savings Plan (RRSP) season is upon us. Canadians have until 11:59PM on March 1 to make an RRSP deposit in order to reduce their 2016 taxable income.
As challenging as it may be for employers to educate their workforce about the benefits of saving, budgeting, and putting away funds to maximize their tax efficiency, RRSP season is the perfect time to reinforce key messages that may have been already communicated throughout the year.
RRSP season creates a need-to-know, just-in-time strategy that may be just enough to drive home some key savings tips. RRSP season also creates a window to educate, inform, and motivate employees.
Tips and Reminders
Reminding employees that RRSP season can be a great time to save even if it means taking an RRSP loan. Their return can be used to pay off the RRSP loan quickly. If employees find themselves in a RRSP loan situation, remind them of easy ways to make monthly contributions in order to avoid finding themselves in the same position next year.
Sprinkling RRSP tips throughout the year and creating opportunities for employees to learn ways to pay themselves first through monthly deductions will reduce the last minute RRSP contribution deadline dash. We have several tips and resources to support your financial literacy and RRSP season communication campaigns. Please contact us, we're here to help so that you can focus on what you do best.
A great deal of attention is being paid to Millennials (born between 1980-2000) and for good reason. By the year 2020, they will represent approximately 50% of the North American workforce. Their views toward debt management and saving for retirement are important considerations as they begin to dominate as consumer and workplace influencers.
What about the other demographic cohorts in the workforce?
While Baby Boomers (born between 1946-1965) are still part of the workforce, we see their numbers continuing to decline even though Canada has one of the highest percentages of working age people of all G8 countries at 68.5% (age 15-64), according to Catalyst.org.
While their numbers might not be as plentiful, Baby Busters, also known as part of Generation X - the core of them born between 1966 and 1971, represent 2.8 million people in Canada, according to information provided by Statistics Canada (www.12.statcan.gc.ca).
Economic challenges face each workforce demographic, but GenXers have lived through unprecedented economic transformation with large swings in the job market and, since the elimination of mandatory retirement, need to redefine the timing of their own workforce exit strategy. As a result, Baby Busters don't have the same sense of career and retirement as the generations preceeding them. With the impact of larger economic forces, GenXers developed less confidence in their ability to save for the long-term. With so much vying for their dollars earned (mortgage, loads, credit card debt, emergency funds, child's education savings), other financial needs simply take priority over saving for retirement.
With RRSP season upon us, there tends to be an influx of savings-related surveys published annually by various financial instituations to help assertain savings patterns and consumer behaviour. Recently, TD announced the results of their latest survey, which highlighted that more than two-thirds of Canadians between the ages of 35-54 (Gen X) say they're not saving enough for retirement. It is this cohort that says they really need help meeting their financial goals and they feel guilty about not saving enough.
Don't expect to retire on time.
In addition, 25% say not being ready for retirement is keeping them up at night. Also, the majority of this Baby Buster-GenX cohort report that they don't expect to be able to retire on time and 29% anticipate working in some manner during "retirement."
The TD survey sites savings barriers resulting primarily from GenXers' everyday financial demands such as: living expenses, mortgage or rent, as well as childcare costs (61%). These Baby Busters also said they struggle with paying down exsiting debt (42%) and other major unexpected life events like divorce or death of a spouse (19%).
While Millennials (born between 1980-2000) expressed similar worries to those of the Baby Busters, the Millennials or Generation Y have a longer savings runway with peak income earnings years still upon them even though they may feel that saving for the long-term, given all the economic turbulance, seems somewhat less reasonable.
Mindsets and intrinsic motivation
What does all this survey information mean when communicating the importance of saving for retirement and engaging employees in participatory pension and savings programs? It means that demographics influence an employee's personal finance mindset and their attitude toward savings habits.
If Traditionalists (born before 1946) could advise GenXers, they would likely tell them to spend less than they make because after all, "a penny saved is a penny earned". Even though this historically thrifty cohort enjoyed the opportunity for long careers with one employer, they might tell this generation that spending less might mean cutting back on day-to-day expenses. They might encourage them to find a way to contribute regularly to their retirement savings and share that doing something now is better than feeling overwhelmed and giving up on building a nest-egg. They might also reinforce the need to manage both sides of the balance sheet.
It is the simple wisdom of those who travelled the road ahead who can look back with clarity and offer up insights that are tried and true. This approach also works for workplace communication strategies -- look closely at what intrinsically motivates each generation in order to help them better prepare for their financial future, today.
These topics along with others pertaining to workforce trends and their influence on group benefit and pension programs remains an important area of focus for us. We invite you to contact us with questions. We are here to help so that you can focus on what you do best.
It is perhaps a blessing and a challenge to think that we are living longer and healthier lives. As a result of better medical treatment, improved nutrition, and accessibility to medical information, people in Canada and in developed nations can expect to live longer. While living longer in good health is great news, the worry for many facing retirement involves concerns about living beyond one's savings.
The 2007 HALE data (the most recent year data is available), indicates that Canada's life expectancy is 80.7 years with the expectation that people could live in good health until age 73 -- representing 90.5% of life lived in good health. While the medium may be age 80 for life expectancy, many are living well into their 90s and those that reach the Centenarian milestone are growing. Statistics Canada's projections indicate that by 2031, there could be more than 17,000 people who will celebrate their 100th birthday. By 2061, this number should be closer to 80,000.
What does this mean to employers who have benefit plans and employment arrangements designed with the understanding that retirement age remains age 65? Many benefit plans and succession plans (if they exist at all) don't factor in the growing numbers of mature workers with no plans to retire early or at age 65. Many plans were built around the mindset that workers generally retired at age 65. With the abolishment of mandatory retirement in 2006, some employers have yet to adopt a different way of approaching this "grey" cohort of workers.
Back in 1971, the median age of the population was 26.2 years. Then in 2009, it was 39.5. In 2036 it is expected to be between age 42 and 45. As of July 2015, for the first time in history, Canadians 65 and older represented more of the population than those in the under age 15 category. This number represents close to 5.8 million people in a nation of 35 million. While by international standards, the population of 65 and over is comparatively smaller than other G7 nations, it is still a force to be contented with particularly when addressing workforce planning and benefit plan management.
As per the Administration on Aging (AOA), in 2014, persons 65 years or older represented 46.2 million or 14.5% of the U.S. population or 1 in 7 people. In Canada, comparatively, 1 in 6 people are over age 65 and represent 16% of the population. By 2040, this cohort is expected to grow to 21.7% of the U.S. population and this number might be slightly higher in Canada.
Employers are finding they need to address how to handle the mature workforce. Statistics Canada reports that 25% of Canadians are working past the traditional retirement age of 65. Sun Life's Unretirement Index agrees and reports that there is a growing number of Canadians expecting to be working full-time at age 66.
The trend in providing coverage to reflect the needs of this elder cohort isn't keeping in step. A particular focus should be given to benefit plan language and the wording around retirement and age limitations specifically pertaining to life insurance reduction and long-term disability coverage.
More discussion with plan sponsors should involve how they wish to extend coverage and how their benefits philosophy aligns with their core values and mission statement. As we track these important workforce trends, we layer a deep understanding of how they relate to benefits and pension plan funding, administration and management. We invite you to contact us to discuss strategic plans for navigating the waters of benefit provisions for mature workers. We're here to help so you can focus on what you do best.
Back in the eighteenth century, Benjamin Franklin coined the term "There are no gains without pains." Over the years, this term has been better known as "no pain, no gain,"
With our industry a buzz in discussions about pension reform and what will be best for our nation, this phrase of Ben Franklin's comes frequently to mind.
Experts question whether CPP enhancements will soften the job market for an already weak Canadian economy. They wonder if the CPP expansion is more of a tax hike likely costing families more instead of facilitating an accelerated ability to save.
Will jobs be eliminated because of rising premiums? The increase to 5.95% from each of employers and employees over a 5 year period beginning on January 1, 2019 may seem like more of a calculated gamble. It is one that the Federal government believes is worth taking especially when it is estimated that 1.1 million Canadian families are reportedly not saving enough for retirement.
The goal is to eventually provide future retirees with one third of their average incomes (up from one quarter) through the CPP, This reform also provides a tax deduction instead of a tax credit on the increased contributions, which will reduce government revenues.
Small business owners share mixed feelings on the subject and worry that CPP premium increases will damage our struggling economy and force them to eliminate jobs.
The Finance Department's projections indicate that CPP reform will create an economic lift to help future generations of retirees. It is a longer term strategic approach that may, in the short term, create a softening in the job market. The plan appears akin to Ben's belief -- there are no gains without pains. The looming question may well be, "Are Canadians ready to accept short term pains with the belief that CPP reform will generate longer term gains?"
Regardless of what side of the CPP reform fence you may be on, it is a topic that concerns Canadians particularly as the Baby Boomer generation continues its rapid trek toward retirement. As per Statistics Canada, we have more people over the age of 65 than under 15 and this greying generation makes up 27% of the population -- double what it was in 1971.
It isn't a simple situation, but it is one that our team is well positioned to address. We have the experience and expertise to discuss ways to help you manage risk and develop sustainable cost management strategies. We invite you to contact us. We're here to help so that you can focus on what you do best.
At one time, defined benefit pension plans were the norm. This might have been considered the post World War II golden age when workers stayed with one employer their entire career, had retirement farewell gatherings, were given a company watch and were reassured that their retirement annuity cheque would arrive monthly for the rest of their lives as a reward for their long years of service and dedication. According to Stats Canada, back in 1971, almost 50% of company pension plans for male workers were defined benefit arrangements. Fast forward to 2011 and that percentage drops to 25. Aside from the public sector, the shift away from defined benefit pension plans has been strong and steady. Many existing plans have also introduced grandfathering for retiree benefits.
It seems that the topic of pension reform has been much talked for almost a decade now. It is also well recognized that a widening gap exists for what public sector pension arrangements are able to offer Canadians workers during their golden years.
Several previous attempts at CPP reform failed. Now, with 8 of 10 provinces on board — excluding Manitoba’s Tory government who is still too new, and Quebec, with its separate approach through QPP — we appear to be moving ahead at full steam.
Something needed to be done given household debt in Canada leads the industrialized world. Perhaps we’ve been lulled into a false sense of predictable low interest rates allowing us to carry even higher amounts of debt.
In Ontario, the ORPP was set to launch in 2019 and if nothing else, it created more motivation for the feds to try again and seek the support of at least 7 of the 10 provinces representing at least 2/3 of the country’s population. In Ontario, we are ready to put ORPP plans on the shelf as CPP expansion was always the preferred approach to foster Canadians’ ability to save for retirement.
While not able to address those close to retirement or those who didn’t contribute much or anything and are now retired or quickly facing retirement, CPP reform will more fully support the savings needs of younger workers as well as those earners in the middle category who are earning in the range of $50,000 to $80,000.
Workers under age 45 and at these middle income levels appear to be most at risk. There are a number of possible contributing factors that result in an incapacity to save due to stronger competing forces vying for a limited pool of funds. Whether it is lingering student debt, mortgage payments, credit card bills or simply keeping up with The Joneses, the reality remains that many middle class workers aren’t saving enough for retirement and without the help of CPP reform, they might not easily find a way to change their behaviour in order to create favourable savings outcomes.
Major CPP reform changes at-a-glance:
Employers play a key role in the savings scenario too as many seek to educate employees and raise their level of financial literacy. We’ve been working with group pension plans and employers for over 2 decades now and invite you to contact us. We’re here to help so that you can focus on what you do best.
Following the ebbs and flows of the Baby Boomer generation (born between 1947-1964) can be an interesting and insightful experience whether you are of this generational slice of the workforce pie or not. Baby Boomers continue to be studied, surveyed, and analyzed for their preferences, buying habits, and saving patterns. Regardless of the industry, the behaviours of this demographic makeup of our society simply can't be overlooked and particularly not with 10,000 North American Boomers celebrating their 65th birthday every day for the next 20 years. (Source: Pew Research Center).
In the pension and benefits world, the life event milestones of Boomers demand greater attention and strategic thinking. More focus is being placed on what benefits coverage will be appropriate as well as how to best to draw down on investment income in their post workforce participation world. With decumulation, the question becomes not whether a person saved enough for retirement, but how best to draw down regular income post workforce participation and not run out of money before death. It comes down to balancing acceptable risk versus a sustainable withdrawal rate.
There are various methods to help people draw down on their investment assets. Looking at the cost, risk and flexibility as well as understanding the person's personal preferences related to their finances is important. As this topic heats up, some questions to consider when planning a withdrawal from workforce participation include:
1) Are there any debts that should be paid off so there are no payments taken from retirement income?
2) How much if any of a "rainy day" emergency fund is needed?
3) Are there any funds to be set aside for specific bequests?
4) What other assets should be factored in (e.g. house)?
5) What type of expenses exist and how should they be broken down based on essential (necessary for survival), basic (ability to travel south each winter) and discretionary (like make charitable donations)?
When addressing the decumulation strategy, thought should also be given to one's 1) private pension, 2) government sponsored benefits, 3) any continued workforce participation, 4) taxation, 5) investment costs, interest rates and the rollercoaster ride given by stock markets.
There are several decumulation methods and each varies when it comes to cost, risk, and flexibility associated with them. They include:
1) working with a financial advisor
2) lifetime annuity or term annuity
3) draw down pension and/or target date funds with a decumulation feature
4) home equity release
5) Shifting investments to TFSAs
6) RRSP "meltdown" - making RRSP withdrawals earlier in life if you'll face tax at a lower rate than anticipated in the year of your death.
Increasingly, approaches to addressing decumulation will take center stage where accumulation discussions previously dominated. There is much to unbundle and address on the decumulation topic particularly as it pertains to what can be withdrawn on a tax-free basis and the different age limitations related to annuitizing or converting assets. We invite you to contact us to discuss what decumulation strategies would work best for your corporate pension plan arrangement as well as best practices related to educating your plan members.
We're here to help so 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.