Employers currently inhabit a challenging environment to offer retirement benefits. In a recent survey, six-in-ten respondents said their non-profit or charitable organization offered no retirement benefits at all. If a plan exists, the most commonly offered plan is based upon employer matching of employee retirement contributions.
What employers say
About 60% of employers in the non-profit sector offer no retirement benefits
Larger employers are more likely to offer retirement benefits of some kind. Only 18% of employers with small numbers of employees (less than 10 employees) have retirement benefits; this number increases to 52% among medium employers (10-99 employees), and reaches a high of 75% for large employers (100 or more employers).
Among employers that do offer retirement benefits, they are generally satisfied with their current plan, except for its applicability to all types of employees
About four-in-ten (39%) are dissatisfied with their plan’s ability to apply to all types of employees. While this is smaller than the number who are satisfied, it remains the highest dissatisfaction score of any aspect tested. The most common benefits plan at non-profit organizations is matching employee contributions.
Echoing earlier concerns, the main barrier to full plan participation is plans’ inability to be offered to part-time/contract workers
What employees say
About 60% of employees would like to have a retirement plan as an employer priority.
Turning to employees, nearly six-in-ten (58%) feel a retirement plan should “very much” be an employer priority. This sentiment peaks among employees aged 45-54, where 78% say it should “very much” be a priority. That said, over 50% of those in both the younger and older cohorts also feel the same way.
Non-profit employees trust financial advisors and the CPP for retirement finance knowledge, but are skeptical of the media
About eight-in-ten charity employees rate themselves as somewhat or not too knowledgeable about government retirement benefits, such as Canada Pension Plan, Old Age Security, and Guaranteed Income Supplement. Most employees put their knowledge level of investments in the middle of the spectrum. Unsurprisingly, younger members are much less likely to rate themselves as knowledgeable on these topics. For example, in the under 35 demographic, only three-in-ten (31%) say they are knowledgeable about CPP/OAS/GIS.
Decent work is a concern for employees.
Six-in-ten employees feel inadequately compensated; over eight-in-ten feel they could earn more outside the non-profit sector. In terms of decent work, 77% of employees disagree that the non-profit/charitable sector is better than others in terms of offering total compensation. However, the fact that half (48%) of employees would take lower salaries if they had retirement benefits shows that total compensation, including offering Common Good, can make up the difference of non-profit sector wages.
Financial barriers are a huge challenge.
Inconsistent revenue is a huge factor for employers.
Employers want to be seen as leaders in decent work, but feel they cannot offer competitive compensation to their employees. Inconsistent revenue is a huge factor for employers, with over half saying that it is a significant hurdle to offering retirement benefits. This sentiment is held by both small and large non-profit organizations. Over seven-in-ten (73%) employers say that retirement benefits are too expensive for them to offer.
Financial barriers are huge issues for retirement benefits in the non-profit sector. Over eight-in-ten (84%) say the lack of consistency/stability in their organization's funding impedes their ability to offer retirement benefits to employees. The most common reason cited for employers not offering benefits is that they are too expensive (73%).
Read the full report:
Common Good is an initiative supported by a coalition of nonprofit sector leaders, major philanthropic foundations, and retirement security specialists.
It is led by a Steering Committee of sector leaders and a cross-sector Champions Council of supporters and endorsers. The design and operations of the proposed plan are provided in partnership with Common Wealth, a mission-driven retirement security firm.
The initiative’s Steering Committee is chaired by Alan Broadbent, the CEO of Avana Capital and founder of Maytree and a long-standing leader in the fight against poverty in Canada. In addition to Alan Broadbent, the Steering Committee includes the following nonprofit sector leaders:
• Owen Charters: CEO, Boys & Girls Clubs of Canada, former board chair of Imagine Canada and the HR Council for the Nonprofit Sector, and former CEO of CanadaHelps.org, Canada’s leading online donations platform
• Rahima Mamdani: Vice President, Human Capital, United Way Greater Toronto
• Elizabeth Mulholland: CEO, Prosper Canada, a national charity championing the development and sustainable scaling of financial empowerment solutions for Canadians living in poverty
Common Good is working to build the best possible plan for the nonprofit and charitable sector; we need to understand our collective needs, constraints and attitudes when it comes to retirement saving.
