Do retirement plans help boost productivity?

Employers offering DB plans report higher productivity rates among employees

Do retirement plans help boost productivity?

Nearly three-quarters (73 per cent) of employers say that employees with financial stress are less productive and that it is important to offer benefits that will reduce that stress (76 per cent).

And with 67 per cent of Canadians saying that the country is facing an emerging retirement crisis, employers stand to gain when they offer workers retirement benefits, according to a report from Healthcare of Ontario Pension Plan (HOOPP).

Among employers offering any sort of retirement benefits, 44 per cent say employee productivity has been better than normal over the past year, compared to companies that are not offering retirement benefits (29 per cent).

“Employers value the various benefits that they offer, but there appears to be a positive association between offering retirement benefits and improved productivity,” says Steven McCormick, SVP for plan operations at HOOPP.

And among those offering the most robust type of plan – a defined benefit pension – a net 38 per cent (51 per cent who reported higher productivity minus 13 per cent who reported lower productivity) report higher productivity.

For those offering defined contribution plans, a net 31 per cent (47 per cent - 16 per cent) reported higher productivity , and for those offering group RRSPs, the net figure was 21 per cent (36 per cent - 15 per cent).

In comparison, for those not offering any retirement benefit, the net figure was seven per cent (29 per cent - 22 per cent), found the survey of 845 Canadian employers.

Almost one in five (18 per cent of) Canadians aged 50 and up are planning to push out their retirement date as 21 per cent of those with more than $100,000 in investable assets now expect to outlast their savings by 10 years, up from 16 per cent in 2010, according to a report released in August.

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