Why do surveyed Canadian workplace plan members have $23,000 less in retirement savings than they believe?
This in-depth study combines survey insights from 1,981 Sun Life workplace plan members with their actual savings data. It's the first research of this scale to merge member attitudes, behaviours, and real plan data.
Key Findings
Workplace plans as financial cornerstones: More than half of surveyed plan members count their workplace plan as a main source of retirement income, with these plans holding 36% of their total investable assets on average.
PLAN BALANCES: PERCEPTION VS. REALITY
The Perception Gap: Members overestimate their savings: survey respondents believed they held $159,000 in their Sun Life workplace plans versus actual balances of $136,000—a 14% gap highlighting the disconnect between perceived and real retirement readiness.
The confidence paradox: Our research reveals that confidence drives significantly better savings outcomes than financial knowledge alone. Surveyed members with high confidence accumulate 64% more in savings relative to income, while those with high literacy manage just 12% more than those with low literacy.
Four distinct investor profiles: At the intersection of confidence and financial knowledge, we identified the profiles of Sophisticated Investors, Overconfident Investors, Cautious Investors, and Cautious Experts.
INVESTMENT PROFILES – GROUP SIZE BASED ON TWO DIMENSIONS – CONFIDENCE AND LITERACY
SAVINGS ACCUMULATION COMPARISON
Investable assets to household income ratio
The gender confidence divide: While women and men score similarly on objective financial knowledge tests, surveyed men consistently rate themselves 20% higher than their actual performance. This confidence gap has real consequences - 36% of surveyed women avoid financial advice due to insufficient savings, creating a cycle where those who most need guidance are least likely to access it.
Automatic features drive results: Nearly 80% of surveyed plan members want automatic features like auto-enrollment and auto-escalation.
Actionable Insights for Plan Sponsors
This research provides a roadmap for improving retirement outcomes through five key strategies:
- Maximize existing benefits through automatic features and clear matching communications
- Address the confidence gap by connecting members to professional guidance and planning tools
- Enhance plan clarity to help the 44-52% of members with neutral to negative views on plan complexity
- Close perception gaps with simple, email-based communications about plan features
- Monitor plan performance using analytics to track progress and optimize outcomes
Click to read the full report and discover how to transform workplace savings plan into a more effective retirement readiness tool for all employees.