NIA report outlines why workers undervalue workplace pensions
The Pension Centre of Excellence at the National Institute on Ageing (NIA) released its new research report Understanding and Communicating the Value of Workplace Retirement Plans on Thursday, drawing on behavioural economics research and new Canadian evidence to diagnose the persistent gap between what workplace pensions are worth and how employees perceive them.
The report, co-authored by Bonnie-Jeanne MacDonald, Doug Chandler, Barbara Sanders and Alyssa Hodder, identifies a pattern that will be familiar to most plan sponsors – workers chronically prioritize cash in hand over deferred compensation.
According to the NIA’s release, job candidates fixate on starting salary while overlooking total compensation. Employees fail to contribute enough to capture the full employer match. Members choose cash over deferred savings in flexible benefits programs. Meanwhile, at the end of their careers, retirees opt for lump-sum payouts instead of the secure lifetime pension income that would protect them through decades of retirement.
