Canadian HR Reporter

CANADIAN HR REPORTER September 4, 2017 NEWS 7 Labour Reporter Canadian Canadian Labour Reporter is a weekly newsletter that is designed to provide labour professionals, lawyers and the industrial relations industry with valuable information and strategies on how to assess, monitor and approach labour collective bargaining agreements. This weekly newsletter provides summaries of recent collective agreement ratifications, labour arbitration digests, analysis of new and amended legislation and regulation, statistical tables on unemployment and inflation, as well as news and analysis of new and amended legislation and regulations. Eliminate hours of research and rely on the trusted resource labour relations experts and lawyers have depended on since 1956! TIRED OF BEING OUT OF THE LOOP IN THE FAST-MOVING INDUSTRIAL RELATIONS FIELD? 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Potential solutions Not surprisingly, 90 per cent of HR professionals responding to a recent survey by Morneau Shepell said they are concerned workers are not adequately prepared for retirement. "ere's increasing awareness of the whole risk in not making sure people are well-educated and well-prepared for challenges like that," said Allen. HR leaders are exploring a range of solutions, found the sur- vey of 370 Canadian organiza- tions, from providing employees with better education (58 per cent), offering them decumula- tion options when they retire (27 per cent), and allowing retirees to purchase insurance at discounted costs through online retiree mar- ketplaces or other options (23 per cent). It's the structure of services that an employer offers that make the biggest difference, said Allen. at means providing a tool that helps employees understand how to draw down on their savings. A lot of attention is paid to pen- sions on the savings end of the curve, she said, so putting away money in vehicles that give a high rate of return. But there's very lit- tle attention paid to draw-downs, to how much people should take out in terms of having their money stretched, and to minimize fees. "Employers can help with that because there could be calculation tools that will help people under- stand how much to budget to take out, as well as guide them to ve- hicles that have the lowest fees so their money can last longer," said Allen. Another option is to provide a vehicle where retirees can have similar types of health benefits that they had when they were working — even if the employee pays for it. "People undervalue or don't re- alize the value of the group plan they get when they're working be- cause that group model provides significant discounts, that group model means that if you have a pre-existing condition, in many cases, you're still covered. And if you buy insurance individually, then those things may not apply. So if an employer is able to offer the benefit of extending some of those group plan features… but you pay for it yourself, that would be a tremendous way for health benefits which are hugely impor- tant the older you get." There's no one-size-fits-all answer, said Gagnon, and the is- sue of financial security is not just about retirement but about broader financial wellness con- cerns that can undermine social and employment productivity. As a solution, Mercer recom- mends "spurring" a consumer revolution in financial fitness, so trying to make saving an engaging consumer experience. "We created this fitness revolu- tion, we need to do the same on the financial side, so that people can view this as exciting, fun," said Gagnon. "We need to simplify our language; we need to create tools that are fun and easy to use, so that we can have that revolution." Mercer also said individuals should know what "good" looks like, so they have the help and tools to plan for and achieve long- term savings goals. "We need to educate way more on what 'good' looks like, because that's a problem — at the moment, people don't know really what good looks like," said Gagnon, citing the four per cent saving average. Another problem is employees do not trust their employers with helping them in terms of savings, he said. "I can see where it's coming from, because in the world of benefits, employers have tended to decrease benefits, so employees are saying, 'Well, it's all about the money for employers.' So employ- ers have a trust issue they need to rebuild." Designing smart systems can also help ensure adequate sav- ing, said the Mercer report, such as making savings contributions compulsory. "We also need to have smart systems to make sure people can start to look at their own situ- ation and understand 'If this is what good looks like, this is how I can adapt my own situation to get there,'" said Gagnon, citing customized default options as an example. "We have the data analytics power and the technology to cre- ate customized defaults, and I think that needs to be considered for sure." Finally, work and retirement need to be redefined, according to Mercer. As societies age and the nature of work evolves, old notions of work and retirement need to give way to a spectrum of new possibilities for when and how to work, and what it means to retire. And employers can do more when it comes to helpful tools. Great-West Life, for example, has a new tool that strings togeth- er all the elements involved with saving, such as education, plan design, matching formula, human advice, new technologies, account aggregation, and modelling out- comes, according to Godfree. "We're able to form a really fast, integrated view of readiness in about five minutes or so," he said. e Wayfinder tool offers steps employees can do to deal with, for example, a retirement short- fall. Members can see a real dollar figure about how much they need to live in the retirement they want, and can make immediate changes consistent with the recommenda- tions, said Godfree. Lack of trust in employers a challenge RETIREMENT < pg. 6

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