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There is a lot of room for improvement on group savings and retirement plan member statements, as a poll by Ipsos Reid finds 44% of Canadians with a group plan don’t know what their retirement income will be. Another 41% are unaware if their current savings rate is on target to meet their future income needs.
The poll, commissioned by Standard Life, found that 87% of Canadians with workplace retirement plans rarely or never make adjustments to their retirement investment portfolio, based on the information in their member statements.
Only 22% of those surveyed gave their statement a high grade for clarity and an appropriate level of detail, while 72% believe their statement contains insufficient information to base any changes to their retirement savings.
The study also found that workplace retirement plan statements are not widely used because they are hard to understand and lack personalized recommendations and specific suggestions to improve retirement income.
The most common complaints about employer retirement statements from those surveyed were:
• the statement is either difficult to understand or too technical (36%);
• the statement is boring (24%); and
• the information is irrelevant because the member is not yet thinking about retirement (21%).
“What this research is saying is that the status quo is not working and action is needed to make group savings and retirement statements more relevant and effective for retirement planning purposes,” says Anna del Balso, assistant vice-president, research and intelligence, Standard Life. “The financial services industry faces a clear communications challenge to fashion easily understood statements that inform, engage and, when necessary, provoke a change in direction.”