Employer-sponsored pension programs have been a staple benefit of the Canadian workforce for many years. However, with such issues as demographics, profitability and the interest rate environment playing a key role in the health of Canadian pension programs, fewer employers are offering pension benefits to their employees today.
With this in mind, our society is faced with the implications of this very fact. As a result, much pressure has been put on governments to respond through policy and further pressure has been felt by individual Canadian households to save for their own retirement.
For those Canadians who are currently part of an employer-sponsored pension program, there is more and more concern about the potential for under-funded pension programs, as well as the threat of insolvency. It would be negligent not to discuss these common worries people have today with respect to their employer-sponsored pension programs.
As practitioners, we have been working with clients to help them understand their employer-sponsored pension programs and what options they have to address common concerns.
Common questions and themes are as follows:
- Will my pension provide me the life I dreamed I would have in retirement?
- What happens if my pension program becomes insolvent?
- Can I commute my employer-sponsored pension and administer a personal pension plan?
- Can I commute my employer-sponsored pension and buy an annuity?