Canadians still living paycheque to paycheque and not saving enough for retirement: CPA

Employee payroll survey looks at retirement savings for the first time this year

This year, the Canadian Payroll Association (CPA) decided to ask a few new questions when it set about polling Canadians about their pay in its third annual payroll survey.

“For the CPA it’s just a way to talk about and find out what Canadians are doing with their paycheques and this year we asked a little more on savings, in particular savings for retirement,”  said Wendy McLean-Cobban, the CPA’s director of communications and education programs.

What the association found was many people aren’t meeting their retirement savings goals.

Almost three-quarters of employees polled (74 per cent) said they have saved less than one-quarter of their retirement savings goal. “Those were kind of terrifying numbers for me, that three-quarters of employees said they have saved less than 25 per cent of their retirement savings goal,” she said.

The bulk of the people that responded to the survey were over the age of 35, and between the ages of 35 and 54 are supposed to be the biggest savings years most people have for retirement, said McLean-Cobban.

But there were parts of the survey that didn’t surprise CPA administration.

 “It wasn’t really surprising that Canadians are still living paycheque to paycheque, it’s at 57 per cent,” she said. “It hasn’t really moved.”

The number of Canadians who admitted to a lack of savings was 59 per cent last year and 57 per cent when the organization started doing the survey in 2009.

“So really there hasn’t been any significant changes,” she said.

That’s not to say Canadians don’t know what they should be doing to save, she said.

“The biggest part is Canadians do know what they need to do to improve their financial situation,” she said, adding the most popular responses from those polled when asked what they think they should be doing to improve their financial situation was to  spend less, pay off credit card debt and reduce mortgage debt.

But while it’s not surprising Canadians are not saving enough, it’s still concerning and it’s a trend payroll professionals can help their colleagues end, said McLean-Cobban.

“Payroll professionals can often help employees administer a savings plan, which can include the employee setting up directing a portion of their net pay to a separate savings account through direct deposit,” she said.

They can also help employees start saving more for retirement by helping them set up retirement savings programs and informing them about retirement opportunities available at their companies.

“Many organizations have registered retirement savings programs and some of those are actually matched by the employer, some are not, but still that’s a great way to save,” she said.

This year’s survey also highlighted the trust employees have in their company’s payroll team. About 81 per cent of employees polled said they were confident the pay and the applicable taxes and benefits are accurate each payday.

“People do trust that payroll professionals make sure their pay is accurate and on time,” she said.

It’s a job payroll professionals take very seriously, said McLean-Cobban.

“It’s just a testament that payroll people understand the commitment to paying employees accurately, on time,” she said. “It is important for employees and the organization, so (payroll professionals) certainly take their jobs in stride.”

The survey is an important public relations tool for the CPA, said McLean-Cobban.

“Most of our members they really like the fact that the CPA gets the media coverage and it kind of raises the profile of their membership and what they do at their organizations,” she said.

“And it gives them something to talk about with their employees.”

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