Canadian Payroll Reporter

3 Canadian HR Reporter, a Thomson Reuters business 2019 News Canadian Payroll Reporter Pension enrolment? Keep it simple Simpler form can encourage more employees to join company plan: Study BY SHEILA BRAWN MAKING small changes to the way employees enrol in volun- tary employer retirement sav- ings plans can significantly in- crease the number of workers who participate in the plans and the rate at which they save, new research finds. A joint study by Employ- ment and Social Development Canada (ESDC) and Sun Life Financial found that simplifying enrolment forms and encourag- ing employees to complete the forms on the first day of work led to more employees joining their employer's plan and choosing a contribution rate that would re- ceive the full employer matching contribution. "The results of the study clearly indicate that there are significant opportunities to im- prove employee participation in savings plans offered by their employers, and further, that the effort needed to achieve this im- provement is relatively small," said a report on the study. It noted that finding ways to increase participation and sav- ings rates is important because recent studies show that up to half of non-retired Canadian adults are not saving enough to maintain their standard of living when they retire. With most employer-spon- sored defined contribution pension plans or group regis- tered retirement savings plans (RRSPs) being voluntary for em- ployees to join, getting workers to sign up can be a challenge. "Participation rates tend to hover around 50 to 60 per cent," said Kim Duxbury, assistant vice-president, product and research, group retirement ser- vices at Sun Life. To determine whether chang- ing some of the factors around enrolment would make a differ- ence to participation and sav- ings rates, ESDC and Sun Life decided to test the effect of a simplified form and a "verbal nudge" reminding employees to complete them right away on employee enrolment. The study, which ran from 2013 to 2018, included 3,760 new hires at 44 workplaces in different industries across Can- ada. For the study, employers were divided into three groups. One group's employees re- ceived a simplified enrolment form, but went through the standard process (they were not given the form to complete until they met eligibility criteria). Employees in another group were also given the simplified form, but were encouraged to complete it on the first day of work when they filled out other payroll and benefits forms, re- gardless of whether there was an eligibility period for joining. A third group was a control group. New employees received a standard enrolment form, which they could complete at their convenience once eligible. The study said it looked at enrolment forms because they tend to be complex, with em- ployees asked to make a choice about enrolling, indicating the amount they want to contribute, and specifying how their contri- bution will be allocated among the funds available in their plan. see CONSIDER page 8 IT PAYS TO KNOW Professional Development Taxable Benefits & Allowances: Reduce Costs and Risk of Audits Providing employee benefits and non-cash incentives can be a win-win for employers and employees. But correctly managing and administering these benefits requires more finesse than many employers may consider. Employers, and payroll, human resource and accounting professionals can benefit from the Canadian Payroll Association's (CPA's) wealth of resources, including the popular Taxable Benefits & Allowances seminar. At the outset, employers should be aware that there is a difference between taxable benefits, allowances and expense reimbursements, which are often categorized as employee benefits. Each category requires understanding of federal, provincial and territorial legislation and regulations and entails unique administration. The CPA's Taxable Benefits & Allowances seminar reviews these important aspects and explores key concepts used by Canada Revenue Agency and Revenu Québec to evaluate taxability and assess more than 40 common benefits, including automobile allowances, loan and stock options, gift cards and more. With over 25 Taxable Benefits & Allowances seminars between now and the end of June, there's bound to be one near you. Stay Current Stay Compliant payroll.ca Marty S., CPM - Member, Ontario Region Register online today at payroll.ca. Register early and save - Early bird rates available two weeks prior to the seminar.

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