Schroders Study Finds Canadian Plan Sponsors Dissatisfied with Retirement Products
TORONTO--(BUSINESS WIRE)--Sep 20, 2018--A survey released today from Schroders, a global asset manager with CAD$ 780.5 Billion in assets under management, found that Canadian plan sponsors are dissatisfied with the retirement products available, and not very confident that their participants will have the income they require throughout retirement.
The survey, conducted among plan sponsors at the Association of Canadian Pension Management National Conference in Quebec City, found that less than one quarter (22%) of respondents were satisfied with the retirement products available in Canada. Over half (53%) thought that most Canadian retirement products won’t provide enough income to last through post retirement, and 29% thought most products were not tailored to the specific needs of Canadian retirees.
Furthermore, plan sponsors are not as confident as they should be when it comes to their participants’ retirement needs. Only 16% were very or extremely confident that their defined contribution (DC) participants will generate enough income through retirement. The majority were only moderately (53%) or slightly (21%) confident.
When it comes to retirement planning, the survey found a majority (51%) of plan sponsors think age 55-65 is the ideal time for participants to begin de-risking assets, switching their portfolio from growth assets to managing drawdown risk.
“Although risk needs to be considered and adjusted when approaching retirement, it’s important to remember that participants need to broadly double their retirement savings from age 55 to 65,” said Neil Walton, Head of Investment Solutions. “In today’s low interest rate environment, following a typical glidepath isn’t enough. Canadians nearing retirement need products that will protect their savings while continuing to grow their income, and capitalize on positive market conditions.”
Still, nearly half of plan sponsors surveyed (45%) noted the biggest risk to reaching a participant’s retirement goals is not saving or contributing enough to their plan prior to retirement. The second biggest worry among plan sponsors (19%) was the possibility of a participant outliving their retirement savings.
“Increasing savings now and investing in the proper vehicles that respond to the unique needs of the Canadian investor and the changing market environment can help limit risk and maximize a participant’s portfolio at retirement” said Ross Servick, Head of Canada. “Earlier this year, we launched our MyRetirement target date funds with exactly this in mind. After years of extensive research into the Canadian market and Canadian consumption trends we aim to provide a relatively high and sustainable income for our clients during their active and late retirement years.”
Schroders launched its MyRetirement Funds in May 2018, exclusively designed for Canadians and intended to be a lifelong investment solution. The Funds aim to address the specific challenges of each stage of an individual’s life, including delivering a predictable income stream in the retirement years. The Funds offer five-year vintages from 2015 through 2060, taking into account an individual’s age, lifespan, and income, as well as offering the ability to readjust accordingly.
To find out more visit https://www.schroders.com/en/ca/asset-management/defined-contribution/my-retirement/
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As a global investment manager, we help institutions, intermediaries and individuals meet their goals, fulfil their ambitions, and prepare for the future. But as the world changes, so do our clients’ needs. That’s why we have a long history of adapting to suit the times and keeping our focus on what matters most to our clients.
Doing this takes experience and expertise. We bring together people and data to spot the trends that will shape the future. This provides a unique perspective which allows us to always invest with conviction. We are responsible for CAD$ 780.5 Billion of assets for our clients who trust us to deliver sustainable returns. We remain determined to build future prosperity for them, and for all of society. Today, we have 4,600 people across six continents who focus on doing just this.
We are a global business that’s managed locally. This allows us to always keep our clients’ needs at the heart of everything we do. For over 200 years and more than seven generations we’ve grown and developed our expertise in tandem with our clients’ needs and interests.
Further information about Schroders can be found at www.schroders.com.
Issued by Schroder Investment Management Limited. Registration No 1893220 England. Authorised and regulated by the Financial Conduct Authority. For regular updates by e-mail please register online at www.schroders.com for our alerting service.
*as at 30 June 2018
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PUB: 09/20/2018 10:12 AM/DISC: 09/20/2018 10:12 AM