Does British pension solution translate?

To mend pension crisis, Canada could follow the U.K.’s lead, but challenges remain
By Sarah Dobson
|Canadian HR Reporter|Last Updated: 11/02/2007

Eager to have many more employees saving towards retirement, the United Kingdom is in the midst of rolling out a National Pensions Savings Scheme (NPSS) expected to become compulsory in 2012. Under the scheme, employees will have to contribute four per cent of their salary to a personal account while employers pay three per cent and the government contributes one per cent via tax relief. The NPSS would apply to those not already covered by a similar workplace pension plan and employees would be automatically enrolled in the scheme, but able to opt out.

Of course the pension crisis is not limited to the U.K. and there has been some talk of introducing a similar scheme in Canada. But would it work on this side of the pond?

Auto-enrolment is definitely gaining traction as a plan design feature, says Shawn Cohen, a senior investment consultant with Hewitt Associates in Toronto, and obviously means people earn more and build for retirement.