tweed_wearer

I am looking to move to Canada this year. My employer in the UK makes a pension contribution for me of 9% of salary (free money) and will match any additional contributions from me up to I think another 5%. This is a good deal by UK standards but by no means unheard of.

I'm keen to make sure I'm not going to spend my retirement eating cold baked beans so I have been looking at what Canadian employers offer.

Many offer RRSP matching to 3 or 5% of salary. I know that RRSPs are retirement savings accounts in a tax wrapper (and i know about the scheme which allows you to borrow your RRSP funds for education or to buy a home). However, 3-5% seems a little stingy. Are the RRSPs on top of an occupational pension fund? I know that Canada Pension Plan is the equivalent of the UK state pension, but how much does it pay? What do most Canadians do for retirement preparation? Is it all RRSP? Occupational pension plans? Or does CPP pay enough to live on?

montreal mike

right now it pays monthly about 1000 to 1100 maximum based on what has been paid in

to get that max one needs to pay in for 40 years

it will pay for baked beans but not much more

these are rough figures so i hope someone will correct me if needs be

http://www.servicecanada.gc.ca/eng/s...ns/index.shtml

ann m

There is no way one should embark on a venture that would rely solely on the CPP - no way enough to live on, and while I think the max is something like $1038, most people barely qualify for around $600 per month.

I don't know what "most" employers do - I only know what mine does - which is higher education.

We pay into a mandatory pension scheme - 10.39%, and the employer adds 11.39%.

The government are making changes to our pension that will take effect in 2016 and essentially require that people work longer (no surprises there).

We have RRSP's but only the employee pays in. Management fees have been negotiated down for a group plan.

RRSP's generally are touted the way to go - shove in what you can, whenever you can - and just be aware you will pay tax on any withdrawals, so plot and plan carefully how you draw on this for your income when you are old(er!).

Just like most western countries, Canadians generally don't save enough - although I heard on the radio this week that about a third of people DO think they are saving enough...

joinerboy

looks like I'm getting the same deal as you.
just hope i'm around to collect

Atlantic Xpat

RRSP with employers matching employee contributions to the tune of 3-5% are the norm, any higher is exceptional IMHO. (My current employer matches 5% of contribution so I am putting 10% total into the RRSP). If your employer offers a RRSP scheme it will be a substitute for a pension scheme which these days are usually limited to public sector employers.

I have some service in a final salary pension in the UK + my RRSP's here. The real difference between eating catfood or not will be the Mrs's final salary scheme as a teacher. Or to put it another way, she's worth more to our retirement than I am.

scrubbedexpat091

Benefits of any sort will vary all over the spectrum depending on your position within the employer, and how nice/generous your employer is.

I haven't for example yet, found any employer in my field who offers benefits of any sort, but its common in the hotel industry for non-management, so not something employees plan on having.

Its unfortunate, but in the next few decades, I see more people relying on CPP more then we see now, since companies have largely done away with pensions, and more and more seem to not have RRSP's or the ability to save sufficient amounts for old age. Based on my income, and maximum I can afford to pay a month, the calculator on the banks website figures I can save 70,000 or so from now 35 to age 70.

montreal mike

and what will that 70K be worth when you get there?

scrubbedexpat091

I have no idea, its based on today's dollar I am sure, so doubt it will be worth much then...lol

montreal mike

in 1962 i was paid the princely sum of 40 a week

food was 10 a week and rent was 50 a month

I managed somehow

now just think of the inflation since, in a 52 year period

and you have another 35 to go

Novocastrian

Similar figures here. 5.6% from salary 5.9% employer: final salary with minimum guarantee (=hybrid scheme).

Edo

I used to get 'free money' like that from my employer too when I was in the UK without having to contribute anything from my own pocket.

However, unfortunately thats not the case here in Canada. Ihave to pay 5% from my salary for my eloyer to pay 7.5% on top of it. But what I like about here is you get 30% of it back in taxes at the end of the year. Thats 30% on your contribution AND your employer's comtribution combined. Not a bad deal IMO.

JonboyE

I have about 65 corporate clients - small and micro businesses that range from 1 to 50 employees. I don't need any hands at all to count the number of businesses that offer any kind of pension.

Novocastrian

In my (very limited) experience of working in a Canadian SME (1983-1985) that is entirely credible.

JamesM

My last two employers had no pension scheme.

Only large corporations and the government.

I manage everything myself.

montreal mike

some small employers will pay only minimum wage, no medical insurance, no pension plan, no bonuses,

Maybe a 25 dollar food voucher for Christmas?

people work in 12 hours shifts 5 days a week and since overtime (at time and a half) is paid after 40 hours a week, it works out to 70 hours a week at regular pay

why do people put up with this?

well it is either that or no job at all!