Canadian pension plan sponsors to focus on Improving members' understanding of retirement benefits, according to Aon Hewitt

Canadian pension plan sponsors to focus on Improving members' understanding of 
retirement benefits, according to Aon Hewitt survey 
TORONTO, May 2, 2013 /CNW/ - Canada's pension plan sponsors are focusing on 
their communications with participants, particularly about retirement income 
adequacy, according to the Canadian Retirement Trends Survey 2012 by Aon 
Hewitt, the global human resource solutions business of Aon plc (NYSE:AON). 
Among employers surveyed, 95% were somewhat or very confident in the 
competitive position of their plans, which is a key tool in attracting and 
retaining employees. However, only 16% were very confident theirmembers 
understand the details of future retirement benefits, and only 12% are 
confident members aretaking accountability for their own future. As a 
result, 83% of those sponsors surveyed plan to review theircommunications 
with their members. By comparison, 59% are likely to assess the design of 
their plans in2013. 
"Demographic changes in the coming decades will result in waves of retiring 
baby boomers, with fewer workers available to support the retirement system," 
said Will da Silva, Senior Partner, Retirement Consulting at Aon Hewitt. 
"However, shorter- term financial pressures and regulatory requirements appear 
to be discouraging plan sponsors from addressing long-term sustainability 
strategies. " 
Aon Hewitt's Canadian Retirement Trends Survey polled Canadian employers to 
assess their views and likely actions over the next year regarding the design, 
management, and delivery of capital accumulation or defined contribution (DC) 
plans, defined benefit (DB) plans, and retiree medical plans for their active, 
salaried, Canadian-based employees. Responses from more than 200 employers 
provide a preview of the changes likely to take place in retirement programs 
over the coming months. 
"Improving communications can help ensure employees are better informed and 
can maximize the opportunities available to them. That way, employers could 
achieve a more positive return on investment and minimize theliability risks 
associated with inadequate communication efforts and materials," said da 
Silva. "Other key areas of concern are governance of plans and, as always, 
cost control." 
DB plan design changes are coming - but not this year
The absolute cost and cost volatility of DB plans remain the main incentives 
for those sponsors looking atchanges. The number of closed or frozen DB 
plans operated by survey respondents in Canada has continued to rise and has 
reached 50%. Despite the signal this sends that near-term action is needed, 
77%ofDB plan sponsors made no changes to their plans in 2012 and 68% 
expect to maintain the status quo thisyear as well. In addition, 69% are 
unlikely to evaluate phased retirement alternatives and 61% are unlikely to 
analyze aging workforce issues. Only 2% have opted for a so-called "hard 
freeze" for DB plans inCanada, far lower than in the United States. 
Capital Accumulation Plans look for web-based education and new features
Capital Accumulation Plans (CAP) include Defined Contribution Plans, Group 
RRSPs, Tax Free Savings Plans, Deferred Profit Sharing and Stock Plans. For 
these, increased communication appears to be a clear focus, with 84% of CAP 
sponsors planning to communicate with members about their plans, according 
tothesurvey. Investment advisory services and financial education figure 
prominently in plan sponsors planning efforts. While many organizations 
continue to provide in-person services, with traditional call centres for 
example, there is also a strong tendency toward online activities or Web-based 
interactive communication that provide personalized financial education 
"Three quarters of CAP plan sponsors will focus on communicating general 
investment education messages to their plan members," said da Silva. "To do 
so, about a third of the sponsors use Webcasts/Webinars todeliver financial 
education and another 35% intend to do so in 2013." 
Some changes to Retiree Health and Benefits 
Although a majority of respondents are unlikely to make changes to their 
retiree health program in 2013, due to the legal complexity of such changes, 
almost one-third are likely to increase contribution levels for future 
retirees. As well, 25% of plans will increase contribution rates for current 
and future retirees and the same percentage plan to reduce benefits for the 
future retirees or reduce or eliminate benefit eligibility altogether. 
"It is apparent that many employers continue to make downward changes for 
futures retirees with 20% offering no retiree medical coverage," said Greg 
Durant, Chief Actuary, Health & Benefits Practice atAonHewitt. "We also 
observe an emerging trend where 10% are likely to move toward a Defined 
Contributionmedical plan." 
Copies of the report on the Canadian retirement Trends Survey 2012 are 
available at 
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About Aon Hewitt 
Aon Hewitt empowers organizations and individuals to secure a better future 
through innovative talent, retirement and health solutions. We advise, design 
and execute a wide range of solutions that enable clients to cultivate talent 
to drive organizational and personal performance and growth, navigate 
retirement risk while providing new levels of financial security, and redefine 
health solutions for greater choice, affordability and wellness. Aon Hewitt 
is the global leader in human resource solutions, with over 30,000 
professionals in90countries serving more than 20,000 clients worldwide. 
For more information on Aon Hewitt, please visit 
About Aon Aon plc NYSE:AON is the leading global provider of risk management, 
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unites to empower results for clients in over 120 countries via innovative and 
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Media Contact: Alexandre Daudelin │ +1.514.982.4910 
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CO: AON Hewitt
ST: Ontario
-0- May/02/2013 12:00 GMT
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