Joint Sun Life and government study gives valuable insights on simplified enrolment
When we look at ways to guide employees and help them save more for retirement through their workplace plan, our focus is on enrolment and getting things right from the start.
Studies in other countries have demonstrated the effectiveness of enrolment simplification and decision-nudging to increase participation and saving rates but there were no equivalent in Canadian studies.
Most Canadian employers expect employees to make active decisions – from their choice of investment to the amount they should be saving from each pay. While the rapid adoption of target date funds has been instrumental in simplifying the decision-making process for employees, there is more that can be done.
For that reason, over the past five years we collaborated with Employment and Social Development Canada (ESDC) on a joint research project. It was designed to explore the effectiveness of additional simplification steps. We also know based on our experience with extensive testing of Canadians and the results of this study, that Canadians welcome nudging and simplified decision-making.
The study concluded this year and we're happy to share the results. Hint: Small changes to enrolment can lead to big changes in workplace savings plan participation and savings rates. This important body of research will contribute to discussions with policy makers about the value of nudges and smart defaults to expand coverage and increase saving rates.
Read the Bright Paper that summarizes the research's findings. It also includes some sample case studies as well as steps employers can consider to increase the success of their workplace savings program.
And, if you were one of the participating plan sponsors, thank you for your support. Without it, this study would not have been possible.
For more information, please contact your Sun Life representative.