Canadian Payroll Reporter

2 Canadian HR Reporter, a Thomson Reuters business 2018 News November 2018 | CPR worrying about managing their credit cards, paying their mort- gage, or saving for retirement. "These are the kinds of stress- es that are on employees that are affecting their performance at work and that are, therefore, affecting profitability of compa- nies," said Doretta Thompson, director of corporate citizenship at the Chartered Professional Accountants of Canada (CPA Canada). To counteract this, Rooney and Thompson said employers should find ways to promote fi- nancial literacy in the workplace. The FCAC defines financial literacy as having the knowl- edge, skills, and confidence to make responsible financial deci- sions. It can include things such as knowing how to make a bud- get, pay bills on time, understand how credit cards, bank accounts, and investments work, and save for future goals. A survey done last year by market research firm Ipsos for Lowestrates.ca found that while more than three-quarters of Canadians said they were finan- cially literate, 57 per cent failed a basic literacy test. The quiz included questions Lowestrates.ca says it commonly receives on topics such as mort- gages, insurance, credit cards, and credit scores. Rooney said workplaces are an ideal location to teach people about financial literacy. "If you can reach a group of adults at the same time, with the same messages, with good pro- grams, free and unbiased tools, and bring in experts who are able to answer questions for employ- ees, then we are satisfying the needs of what we are hearing through our research," she said. Workplace education pro- grams may also help people be more proactive about their fi- nances, said Thompson. "They start to understand where they can go for informa- tion when they do need it. That's really important," she said. "We know, for example, when people get into trouble with money — they get into debt — it can take them up to five years to seek help and they can be in real- ly, really bad trouble by the time that they actually ask for help," said Thompson. "Whereas if we build this community of trust around sharing financial information, the hope and desire is that they will get this information and the help earlier. It will make a bigger difference faster in their lives." While some employers may be concerned that employees will see workplace financial literacy programs as an intrusion into their personal lives, Thompson said they should not worry. "What we know is that that is completely not true. The vast majority of employees would want, appreciate and would par- ticipate in financial literacy edu- cation from their employers." In fact, the CPA (payroll) sur- vey found that 84 per cent of employees would be interested in receiving financial education programs at work. For employers interested in providing them, there are a number of options, said Rooney, adding that with November be- ing Financial Literacy Month, now is a good time to begin. "We have great interactive tools on helping people budget. We have a financial goal calcula- tor that can help people under- stand better savings and debt and what their money looks like. We have a selector tool that can help people identify bank ac- counts and credit cards that best suit their needs," she said. In addition, the FCAC is work- ing on a best practices frame- work for workplace financial literacy, which it will launch next month. The online framework will provide employers with best practices, tools, and resources to implement financial literacy programs. "We also have a great tool called the Canadian Financial Literacy Database. It points to other organizations that offer workplace financial literacy con- tent," she said. Among those organizations are the payroll association and CPA Canada. Thompson said the chartered professional accountants' asso- ciation has over 6,000 members across the country registered to deliver financial literacy pro- grams on a variety of topics, including saving, financial man- agement, tax strategies, fraud, and retirement planning. "I think we did over 400 em- ployers last year," she said. "What we do is put together a collection of our financial literacy sessions and offer them to employers. The sessions all have no cost," she said. "Depending on the employer, we can tailor them to exactly what they need," she said. An employer's payroll profes- sionals are another resource, said Janice MacLellan, vice- president of operations at the CPA (payroll). "The CPA's 10th annual Na- tional Payroll Week employee survey indicates that 44 per cent of Canadian employees still live paycheque to paycheque and one in five could not handle an emergency expense or a delay in their paycheque," she said. "Receiving a paycheque that is paid accurately and on time is the cornerstone of financial wellness for an individual." "In addition, 84 per cent of payroll professionals spend part of their time educating their em- ployee base on key benefits such as CPP, EI and employer retire- ment and savings programs, so they appear to be placed in the position of being first respond- ers for some aspects of em- ployee financial education," said MacLellan. "They can provide employee education sessions on the up- coming changes to CPP, which is one of the pillars of retirement planning. They can ensure that there are annual employee infor- mation sessions on the employ- er's retirement or group benefit programs to remind employees of all that is available to them for financial planning." In educating employees, MacLellan said payroll profes- sionals should take advantage of tools that the association has created. One is an online video called "Understanding Your Pay," which teaches employees about the information on their pay statement, including social insurance number, statutory de- ductions, net pay, statutory holi- day pay, and vacation pay. Another association initia- tive is "Pay Yourself First," which encourages employees to have a portion of each pay automati- cally deducted to go towards things like paying down debt or contributing to savings goals. "Our survey indicates over 55 per cent of employers have an automatic payroll savings pro- gram in place, but only 44 per cent of employees take advan- tage of them," she said. The association has resources that payroll professionals can use to make a case for their em- ployer to set up a program. Rooney praised the initiative, saying it could be a key message from payroll departments. "How valuable if you can pay yourself first and not even see the funds," she said. "You might have those emergency savings that you can draw from as op- posed to further credit products and going a little bit further into debt." She also suggested that payroll professionals promote financial literacy through their employer's intranet by providing links to fi- nancial literacy content. "In the federal government, FCAC has worked with our Treasury Board Secretariat and through our payroll folks to highlight links to help people find the content that they need to help them reduce their stress levels," said Rooney. "They (pay- roll professionals) have a critical role to play in this space." For more information, see: • Financial Consumer Agency of Canada: www.canada. ca/en/financial-consumer- agency.html • Canadian Payroll Association: www.payroll.ca/Resources/ Important-Links/Financial- Literacy-Resources • Chartered Professional Ac- countants of Canada: www. cpacanada.ca/en/the-cpa- profession/financial-literacy/ financial-literacy-education/. Four of 10 workers live paycheque to paycheque from FINANCIAL on page 1 Workplaces are an ideal location to teach people about financial literacy.

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