1. The Future of Pensions October 2010 Prepared for CUPE and PSAC

2. 2 ENVIRONICS Future of Pensions National Public Opinion Survey – Commissioned by CUPE and PSAC – 2,020 adult Canadians surveyed by telephone, August 6 to 28 – Margin of error +/- 2.2 percentage points at the 95% confidence level – Margin of error for Atlantic Canada +/-6.1 percentage points at the 95% confidence level – Margin of error for the Prairies +/-4.4 percentage points at the 95% confidence level – Margin of error for British Colombia +/-6.2 percentage points at the 95% confidence level

3. 3 ENVIRONICS Support for increasing CPP benefits is widespread Q. Recently there has been talk about expanding the CPP to help people save more for retirement. The CPP covers almost all workers. The amount that individual workers and employers pay into the plan would increase slowly over the next several years to provide higher retirement benefits from the CPP. Generally speaking do you support or oppose increasing Canada Pension Plan benefits? Is that strongly or somewhat? Atlantic: 41% strongly support, 43% support Prairies: 35% strongly support, 43% support BC: 40% strongly support, 36% support

4. 4 ENVIRONICS Rate of changes to Canada’s pension system felt to be too slow Q. As far as you know, are policy-makers moving too fast, too slow, or at the right pace in their efforts to deal with changes to Canada’s pension system? Atlantic: 3% too fast, 50% too slow, 21% just right Prairies: 4% too fast, 46% too slow, 20% just right BC: 6% too fast, 40% too slow, 26% just right

5. 5 ENVIRONICS More than half think OAS and GIS too low OAS and GIS By age 2010 60 plus 50 to 59 40 to 49 30 to 39 18 to 29 Total 33556 5 3 5540 2 23159 7 53456 5 22568 4 3 3059 8 Too highJust rightToo lowdk/na Q. Some senior citizens currently receive little or no CPP benefits due to a lack of participation in the workforce. These people typically receive an old age security pension and a guaranteed income supplement – referred to as OAS and GIS. People receiving the OAS and GIS receive an average of about $11,000 per year. In your opinion is this amount too high, too low, or just about right? Atlantic: 70% too low, 26% just right, 2% too high Prairies: 55% too low, 34% just right, 5% too high BC: 56% too low, 36% just right, 2% too high

6. 6 ENVIRONICS Large majority support increasing OAS and GIS Q. It is estimated that approximately 200,000 Canadians live only on the OAS and GIS and are below the poverty line. Knowing this, would you support or oppose increasing the payments to these senior citizens? Do you feel strongly or not? Atlantic: 74% strongly support, 14% support somewhat = 88% support Prairies: 60% strongly support, 17% support somewhat = 77% support BC: 58% support strongly, 22% support somewhat = 80% support

7. 7 ENVIRONICS Most savers use RRSP and/or TFSA Q. Do you have a registered retirement saving plan/RRSP or a tax free savings account/TFSA? Subsample: Not retired/saving for retirement Atlantic: 51% RRSP 9% TFSA 27% Both 14% Neither Prairies: 44% RRSP 8% TFSA 38% Both 10% neither BC: 42% RRSP 7% TFSA 37% Both 12% Neither

8. 8 ENVIRONICS A substantial minority are not saving towards retirement (% No) Q. Are you personally saving for retirement ? Subsample: Not retired Atlantic: 46% No Prairies: 31% No BC: 35% No

9. 9 ENVIRONICS …primarily because they cannot afford it Q. What are some of the reasons why you are not currently saving for retirement [IF HAVE PENSION: outside of your pension]? Subsample: Not retired and not saving for retirement dk/na Other Need information Already old/retired/ semi-retired Don’t need to save/ have pension at work Not thinking about retirement/ still young/other priorities Not worried about retirement Can’t afford/don’t have money 74 9 6 4 1 1 6 3 Atlantic: 70% can’t afford/don’t have money Prairies: 68% can’t afford/don’t have money BC: 81% can’t afford/don’t have money

10. 10 ENVIRONICS More than half of Canadians say their income is not always sufficient to cover essentials Q. Thinking about your household expenditures on essentials (rent or mortgage payments, utilities, or food and clothing), would you say your current household income is always sufficient, is often sufficient or is rarely sufficient to meet these essential expenditures? AlwaysOftenRarelyNeverdk/na 44 41 32 41 21 15 2 1 3 20012010 n/a Atlantic: 40% Always 41% Often 16% Rarely Prairies: 45% Always 38% Often 13% Rarely BC: 49% Always 30% Often 16% Rarely

11. 11 ENVIRONICS Canadians tentative about ability to save for retirement Q. Thinking about your financial future, how confident are you that you will be able to save enough to support yourself in retirement? Are you very confident, somewhat confident, not very confident or not at all confident? Subsample: Not retired Atlantic: 27% Very confident 42% Somewhat confident 17% Not very confident 12% Not at all confident Prairies: 29% Very confident 45% Somewhat confident 13% Not very confident 12% Not at all confident BC: 25% Very Confident 36% Somewhat confident 22% Not very confident 13% Not at all confident

12. 12 ENVIRONICS Four in ten expect to work in retirement Q. And do you think you will definitely, probably, probably not or definitely not have to work once you have retired? Subsample: Not retired Atlantic: 9% Definitely 27% Probably 43% Probably not 16% Definitely not Prairies: 7% Definitely 30% Probably 43% Probably not 13% Definitely not BC: 9% Definitely 28% Probably 43% Probably not 16% Definitely not

13. 13 ENVIRONICS But two-thirds expect to live comfortably in retirement Q. Do you think that you will, or will not have enough to live comfortably during retirement, even if you can’t live exactly as you do now? Subsample: Not retired Atlantic: 64% total Prairies: 71% total BC: 64% total

14. 14 ENVIRONICS Most Canadians expect to retire at age 60 or older Mean Q. At what age do you expect to retire? Subsample: Not retired Atlantic: 61.4 years old Prairies: 61.7 years old BC: 63.3 years old

15. 15 ENVIRONICS “Ideal” retirement age somewhat younger Q. What do you think would be the ideal age to retire? Subsample: Not retired Atlantic: 58.2 years old Prairies: 58.8 years old BC: 59.2 years old

16. 16 ENVIRONICS Retirement meets expectations for most Q. Are you enjoying retirement more than you expected, less than you expected, or about the same as you expected? Subsample: Retired Enjoyment of retirement By income 2010 100K plus 80 to 100K 60 to 80K 30 to 60K <30K Total 2454193 14 50323 255915 1 2565 82 365842 50 37113 More than expected As expected Less than expected Depends/dk/na Atlantic: 14% More than expected 57% As much as expected 22% Less than expected Prairies: 18% More than expected 56% As much as expected 21% Less than expected BC: 32% More than expected 48% As much as expected 20% Less than expected

17. 17 ENVIRONICS Three in ten retirees living very comfortably Q. Would you say in terms of your financial situation, you are living very, somewhat, not very or not at all comfortably? Subsample: Retired Financial comfort By income 2010 100K plus 80 to 100K 60 to 80K 30 to 60K <30K Total 3156653 14 5514133 316351 3466 53434 57 43 Living very comfortably Living somewhat comfortably Living not very comfortably Living not at all comfortably dk/na Atlantic: 22% Very comfortably 65% Somewhat comfortably 5% Not very comfortably 4% Not at all comfortably Prairies: 38% Very comfortably 50% Somewhat comfortably 6% Not very comfortably 4% Not at all comfortably BC: 36% Very comfortably 54% Somewhat comfortably 3% Not very comfortably 5% Not at all comfortably

18. 18 ENVIRONICS Most rely on a mix of retirement income sources Q. Retired: What are your current sources of retirement income? Q. Not retired: When you retire, on what sources of retirement income do you plan on relying? Atlantic Prairies BC 67% 60% 60% 74% 77% 74% 46% 64% 46% 25% 32% 37% 34% 48% 44% 23% 37% 39% 53% 46% 34% 42% 49% 53%

19. 19 ENVIRONICS Among those with RRSPs, the majority are not fully clear on how investment management fees work Q. To what extent do you understand the fees charged by financial institutions in relation to retirement savings plans, would you say you definitely understand them, understand them somewhat, or do you not really understand? Subsample: Not retired and have a registered savings plan (RRSP/TFSA) By income 2010 100K plus 80 to 100K 60 to 80K 30 to 60K <30K Total 2950 20 1 13 50 36 1657 25 2 49 25 2952 16 3 37 46 16 0.5 Definitely understand Understand somewhat Do not really understand dk/na Atlantic: 20% Definitely understand 60% Understand somewhat 21% Do not really understand Prairies: 31% Definitely understand 47% Understand somewhat 20% Do not really understand BC: 36% Definitely understand 45% Understand somewhat 18% Do not really understand

20. 20 ENVIRONICS Type of pension held is at odds with preferences Q. Is your company pension the type that guarantees you a fixed amount of benefits when you retire, known as a defined benefit pension? Or is it one where the amount of benefits you will receive will vary depending on how well the pension fund investments perform, known as a defined contribution pension? Q. In your view, which of these two types of pensions is preferable, defined benefit, which pays a fixed amount when you retire, or defined contribution, where the amount of benefits received varies depending on the performance of the fund? Subsample: Not retired, has a company or private pension plan Atlantic 44% 61%32% 27%24% 12% Prairies 43%66%37% 25%20% 9% BC 49%77%28% 11%23% 12%

21. 21 ENVIRONICS Confidence in the stability of private pension plans high Q. Please tell me whether you strongly agree, somewhat agree, neither agree nor disagree, somewhat disagree, or strongly disagree with the following statement: I’m confident my pension fund will be able to pay my benefits when I retire. Subsample: Not retired, has a company or private pension plan Atlantic39% 42% 5% 7%4%3% Prairies30% 42% 5% 12%6%4% BC32% 39% 6% 9%5%9%

22. 22 ENVIRONICS Less confidence that government will step in if pension plan in trouble Q. Please tell me whether you strongly agree, somewhat agree, neither agree nor disagree, somewhat disagree, or strongly disagree with the following statement:If a private pension plan got into financial difficulty, I'm confident the government would step in to prevent members from losing their benefits. Subsample: Not retired, has a company or private pension plan Strongly agreeSomewhat agree Neither agree nor disagree Somewhat disagree Strongly disagree dk/na 8 24 9 30 26 3 If a private pension plan got into financial difficulty, I'm confident the government would step in to prevent members from losing their benefits 2010 Atlantic 8% 23% 5%33%26%4% Prairies 9% 20% 7%29%31%4% BC10% 18% 5%28%35%4%

23. 23 ENVIRONICS Few consider public sector pensions too high Q. A typical public sector employee who worked for 30 years would receive a pension of approximately $18,000 per year, in addition to CPP. In your view is that too high, too low, or just about right? Atlantic 9% 63% 23% 5% Prairies 14% 59% 22% 6% BC 18% 60% 16% 5%

24. www.EnvironicsResearch.ca Tony Coulson Vice President Environics Research Group Ltd. tony.coulson@environics.ca 613-230-5089