TORONTO – As pensions come under increased pressure from corporate and public-sector cost-cutting, Canadians need to place a higher priority on saving for retirement, says a new report from the Bank of Montreal.
It says the dwindling number of defined benefit pension plans means more retirees don’t have a guaranteed level of retirement income.
“An obvious reason behind this phenomenon is the reluctance of employers to be their employees’ retirement income guarantors: in times of low interest rates, uncertain market returns and increasing longevity, the risk is simply too high,” said Tina Di Vito, head of the BMO Retirement Institute.
As a result, more Canadians must rely on their own ability to save and invest.
At the same time, Canadians are not placing high priority on a good retirement plan, instead tending to focus on salary and flexible work arrangements, the report says.
The BMO report suggests that more than half of those surveyed could not identify the “must-have features” they would include if they were able to design their own workplace pension plan.
Questions about coming changes to government-sponsored plans have resurfaced since Prime Minister Stephen Harper delivered a speech Thursday at the World Economic Forum about the potential impacts of an aging population on Canada’s economy.
Harper said his government will soon take steps to ensure the future of unfunded parts of Canada’s retirement income system.