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Changes to pension plans : employers are still not ready, says Aon

by

Justine Montminy

April 30, 2018 11:30

Photo : Freepik

A survey ofAon has revealed that only 17 % of employers have started to prepare for the entry into force of the changes, which aim to enhance the Canada pension Plan (CPP) and the Quebec pension Plan (QPP). These changes will come into force in 2019.

The survey, conducted with 325 organizations across the country, has shown that even if the increase in costs driven by changes to the CPP and QPP is a source of concern for employers, few have strategies in place to respond to this increase.

One-third of employers do not know when they will prepare

Approximately 37 % of employers are planning measures to prepare for the entry into force of the changes in the course of the year, reports the survey. However, a little more than one-third (32 %) of employers are unaware of when they will start to do so.

“The reasons for this situation cannot be clearly established, but it seems that many employers underestimate the impact that these legislative changes will have on their organization and their employees, in particular with respect to contributions and benefits of pension plans currently in place,” says Claude Lockhead, partner and executive director of the convenient Retirement of the eastern region at Aon.

The main concerns of the changes

Aon has listed the main concerns of employers in relation to the enhancement of the CPP and QPP. Among these, 68 % of surveyed organizations are concerned about the increased contributions to the organization, 53 % to the increase of employees ‘ contributions, 46 % of the impact on pension plans, and finally 40 % of the increase in administrative requirements.

The survey reveals that 57 % of employers say they know the overall impact of changes designed to enhance the CPP and the QPP on their payroll. However, 69 % of them do not know how they will manage the financial impact. In addition, only 6 % of employers have been part of upcoming changes to their employees.

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