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Phased retirement programs

Wednesday December 09, 2015 Written by  Retain Canada
Comprehensive programs designed to assist employees in the transition to retirement have yet to take a firm hold in Canadian workplaces.

Morneau Shepell’s latest 60-Second Survey asked employers if they made reduced hours an option for employees who are nearing retirement age, in order to help them make a gradual shift out of the workforce. Only six per cent of respondents indicated that they do so, and an additional 10 per cent stated that reduced work hours are offered to some classes of near-retirement employees.

A little over half of all employers surveyed (53 per cent) took a more passive approach, stating that reduced work hours are not formally offered but that individual requests are considered.

Approximately 31 per cent of the respondents do not offer reduced work hours, except perhaps in rare circumstances.

When asked about retirement planning programs geared to employees within five to 10 years of retirement, employers responded as follows, with some offering more than one type of program:

  • Fifty-five per cent provide information on an internal or service provider's website or provide other tools.
  • About half of all respondents (48 per cent) offer group financial planning or education sessions.
  • One in five (19 per cent) make individual retirement planning and education sessions available.
  • One in 10 (11 per cent) deliver group sessions to assist employees with the psychological transition to retirement.
  • One-quarter of respondents (27 per cent) do not offer any retirement planning programs.

Where the employer provided a retirement program (defined benefit pension plan, defined contribution pension plan, etc.), the results did not differ significantly according to the type of retirement program sponsored or the size of the organization.

"It's encouraging to see that half of the respondents are providing information and/or education sessions," said Nigel Branker, a partner at Morneau Shepell. "As the assets in defined contribution and other savings plans grow, it will become increasingly important for employers to encourage their employees to become actively engaged in preparing for retirement. However, taking a more comprehensive approach to 'off-boarding' – helping employees transition to retirement – can reap additional benefits. A gradual, supportive withdrawal from the workforce enables better succession planning for the employer, and can increase the near-retirement employee's productivity and job satisfaction, as well as boost that worker's odds of a successful retirement."

Survey results include responses from 62 employers of various sizes from across Canada.

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