Normandin Beaudry's Dimitiri Poliak outlines what it takes to close Canada's retirement gap
Recent findings found that millions of Canadians have no workplace savings plan. And while that gap sits at the centre of the country's retirement readiness problem, closing it is harder than it seems.
So what happens to those without a pension plan? And are pensions the ultimate solution for retirement readiness?
Dimitri Poliak, principal at Normandin Beaudry, believes the retirement readiness problem plays out on two fronts, noting that most Canadians work for small and medium-sized businesses. Most of those businesses do not offer a savings vehicle.
“It is also true that in the absence of such a vehicle, savings habits are scarce in terms of saving for long-term goals, such as retirement. And that's before we even get into important subjects like the increased cost of living that we’re going through today,” said Poliak. “Having the vehicle and the payroll deduction is a significant contributor towards long-term savings. Automation is one more decision off our hands and making it easy for everyone. It's been effective worldwide.”
Still, retirement readiness is too broad a problem for any single fix, Poliak suggests, adding the more useful way to think about it is at a systems level - what can be built at scale, and how can it actually be delivered in a way people use.
He sees recent VPLA legislation as a positive step because it creates a path for workers to turn savings into retirement income, but he also stresses that these decisions remain highly personal. Whether savings sit in an RRSP or a pension plan, plan members still have to choose what fits their finances, family situation, taxes, and timing.
In his view, scale matters because large institutions are better placed to offer income vehicles efficiently and at lower cost, which can improve retirement outcomes and stretch lifetime income further. While he doesn’t see employers as the most efficient point of delivery for those solutions on their own, he believes larger platforms should handle the heavy lifting, while employers connect workers to them and build a clearer experience around onboarding, financial literacy, retirement planning, and the options available at the point of retirement.
He also acknowledged how retirement decisions rarely happen on the schedule plan sponsors expect, noting employees don’t often want to lock themselves into a fixed income product the moment they stop working. Otherwise, some have to take government benefits immediately to afford retirement, noted Poliak.
In practice, many people only move into more formal income arrangements a few years after retiring, which means support systems need to reflect the fact that decision-making is often delayed, staggered, and personal rather than neat and immediate, noted Poliak.
That’s why he argues for better structures that guide people without forcing them into choices before they are ready. The goal, in his view, is to get people off to the best possible start rather than leave them on their own, while still recognizing that the final decision will come in their own time.
He also flags wider literacy gaps as a major obstacle, especially for new Canadians and for workers dealing with broader inequities such as the gender pay gap, which pension gaps can deepen. More broadly, he suggests Canada is still behind on the financial literacy needed to help people navigate retirement well.
To that end, Poliak pointed to Quebec's requirement that employers provide some form of retirement vehicle, whether a VRSP or a sponsored plan, which helped move the needle in provincially. Meanwhile, the rest of Canada has not followed, Poliak noted, and existing PRPP vehicles offered by financial institutions remain underused despite having the scale to support broader adoption.
For workers who do have access to a plan, the challenge shifts to design and usability, Poliak suggests. While a traditional DC structure can be difficult to commit to when starting salaries are low and living costs are high, Poliak believes that tension is pushing employers to rethink how plans are built.
He sees room for flexible arrangements that allow contributions to serve needs beyond retirement without sacrificing retirement outcomes, whether that means adjusting the balance of employer and employee contributions or broadening what the vehicle can be used for. Consequently, he recognizes that some employers believe a locked-in structure is the only thing standing between their workforce and poor retirement outcomes.
Poliak emphasized that modernization ultimately needs to be tailored to the demographics of each workforce, which means the right answer will differ from one employer to the next. That could involve adding plan choice through TFSAs or FHSAs, adjusting withdrawal provisions, or directing limited resources toward the areas where gaps are widest rather than raising contributions across the board.
He also points to women's pay equity as one example, suggesting sustaining pension contributions during parental and family leaves would go a long way toward bridging a gap that pension design currently deepens.
Still, Poliak stressed that structural changes alone are not enough. Financial literacy has to underpin any strategy, emphasizing sustained engagement that builds knowledge over time, like budgeting, cash flow management, and debt reduction, which he argues remain the areas of greatest demand.
After all, building and reinforcing good money habits has to come before any conversation about retirement planning, because workers who are drowning in high-interest debt are unlikely to engage with or value the savings programs available to them, he added.
Where employers do have room to act today is by adding LIF or RRIF vehicles to their plan structures, and Poliak says a growing number are moving in that direction. The revised CAPSA guidelines have accelerated those conversations over the past year, reinforcing the original intent behind workplace savings programs: to provide income in retirement, not just accumulate assets. That distinction matters because the investment approach that works during the savings phase does not necessarily serve members well once they begin drawing income.
"It doesn't necessarily hold true that the same investment plays well in both parts of the equation. You may need a completely different investment structure," he said.
However, the urgency varies by employer, notably as an organization where most of the workforce is under 40 may not feel the pressure yet, but Poliak suggests many Canadian employers have 25 per cent or more of their population at or near retirement age.
"There are ways to provide for a secure pension at the same time as allowing for some flexibility to recognize the modern challenges that everyone faces,” noted Poliak. “Having a thoughtful discussion strategically to plan what a modern pension plan structure could look like when both are true at the same time is quite important. Because there are ways to address both.”
