Group plan members’ finances have improved but stress has worsened

Manulife Investment Management released its second Canada Retirement Study: Stress, Finances, Well-Being of Canadians, looking at how plan members are feeling about their well-being, overall financial security and retirement preparedness. It also examines employer opportunities to address the mental stress and distraction employees report feeling about their financial situations.

“Advisors and workplaces have an opportunity to help reduce Canadians’ financial stress by offering support that will help increase their knowledge of investment opportunities and confidence when making financial decisions,” says Brett Marchand, head of retirement with Manulife Investment Management, Canada. “With just under half of respondents saying they have a comprehensive financial plan for retirement, and half expressing a desire to be more confident about making financial decisions, the potential impact of offering an expanded financial wellness program in the workplace is clear.” 

The white paper further states that 84 per cent of the 1,002 plan members surveyed see employer-sponsored retirement plans as being a critical company benefit. Six in ten say they would not work for a company without one. Three quarters state that a financial wellness program would have at least some impact on reducing financial stress, thereby having a positive impact on their productivity, and almost three in five said they would be interested in receiving help from their employer in the way of education savings tools, emergency savings account assistance and help managing a budget.   

“Our second annual Manulife Canada Retirement Study shows the pervasiveness of stress, including concern about finances, among a large majority of Canadian workers,” the paper states. “Seven in ten respondents evaluate their finances to be good or better (than they were before the pandemic), including 32 per cent who say their financial situation is very good or excellent, but one quarter say they worry a great deal about meeting basic expenses such as housing, food, transportation and taxes. Other common sources of worry are insufficient emergency retirement savings and current economic conditions.” 

They add that employers “have an opportunity to ameliorate employee stress through financial wellness initiatives which can enhance both employee and organizational well-being.” 

The report also examines mental stress and worker retention, worker’s focus and priorities which include paying off debt, investing wisely and planning for retirement, and examines the growing divide between those who are ready for retirement and those who may be working longer than planned.

“Filling the information gap is where employers can step in to give workers greater visibility on where they are in their financial path,” they write. Half of those surveyed agreed that getting projections on estimated income and expenses in retirement or learning about sources of income and Canada Pension Plan (CPP) strategies would have a major impact on their financial preparations for retirement. “The unified message from the study is workers need to gain more confidence in making financial decisions.”