'Retirement is one of life’s biggest transitions... Members have to take a much more preventative and proactive ownership over their own retirement,’ argues HUB’s Joe Connolly
It's no surprise the retirement landscape in Canada is shifting. People are living longer, markets remain volatile and the traditional playbook for retirement planning is rewriting itself.
For plan sponsors caught between rising benefit costs and an anxious workforce, the path forward requires more than incremental adjustments.
"There has to be a holistic approach to this and they're all interrelated, whether it's becoming more productive at work, whether it's improving your health or improving your financial situation," said Joseph Connolly, senior vice president in the investment consulting group at HUB International. “We have to encourage employees to take preventative care, and proactive ownership over each one of those items. Ownership over their health, ownership over their total financial well-being and that will improve their overall total well-being. And that's important, especially if we want a very productive workforce. There are a lot of transitions happening. Retirement is one of life's biggest transitions, and it involves much more than just finances.”
Connolly acknowledges that recent years have been unsettling for institutional investors and plan members alike particularly as markets have felt erratic, buffeted by global events, trade disputes, and economic curveballs.
That unpredictability makes it nearly impossible for those approaching or in retirement to feel confident their savings will hold. He argues the current environment demands greater diligence and deeper analysis from both plan sponsors and members.
To that end, some employers and plan sponsors are finding success with less conventional approaches to boost engagement. Connolly points to the growing use of retirement lifestyle coaches and web-based planning tools that help members think beyond the numbers.
These resources offer "a fresh perspective on how to shape a clear vision for retirement," he said, adding sponsors who invest in such tools are seeing results and members feel more prepared and less anxious about what lies ahead.
"It gives you that peace of mind," he added.
Still, while tools like lifestyle coaches and webinars can help shift member behaviour, Connolly cautions that more isn't always better.
"Sometimes we almost do too much and there's information overload," he said, adding that “the one thing plan sponsors have to become much more aware of is to have a better line of focus of what the members need.”
According to Connolly, a decade ago, the standard approach was to pile on options and leave members to sort it out, an approach he dismisses as inadequate as recent CAP guidelines have reinforced this shift, urging sponsors to be more deliberate about the information they provide members.
"Just giving them access to multiple sources and multiple websites is really not good enough," he added, underscoring that clarity and not volume, is what members require.
When asked how he would characterize the state of retirement readiness across the country, Connolly sees it as very nuanced, varying significantly by age group. He noted that as people live longer, planning has become more sophisticated, with far greater emphasis on the decumulation phase than in the past.
Even most of his own work has historically focused on helping people build assets, but he argues the real challenge now is how retirees draw down and redeploy those assets effectively in later life.
Additionally, insurers are actively developing decumulation-focused products and options to address this, while also highlighting the growing use of target date and lifecycle funds as a mixed development, adding they generally leave members in a better position than a decade ago and provide a form of “autopilot.” Yet he believes the industry still needs to go further to strengthen retirement security and avoid complacency.
Connolly stressed that there is no one-size-fits-all approach to investing because each person’s circumstances, history, and market experience are different. Still, he sees some clear principles. First, he advocates broad diversification across asset classes, noting that insurers are increasingly offering access to alternatives such as real estate, infrastructure, private equity, and private debt to help smooth returns and reduce swings in portfolio values, framing this as a deliberate effort to de-risk.
He also expects income replacement products and decumulation vehicles to gain traction on DC and insurance platforms in the near term, noting there’s a fundamental gap in how the industry serves members approaching retirement.
"Most of the target date funds we see end at 65 and then the assumption is nothing changes after that. It's almost like life ends at 65," he said, underscoring that plan members - whether in a DC, DB, group RRSP, or TFSA need to understand what’s available and use the resources at hand to make informed choices.
Notably, Connolly emphasized how the retirement landscape has shifted, and DB plans are increasingly rare. In their place, new "DB light" products are emerging that mimic target benefit structures and distribute risk between employers and employees. Ontario's recent legislative approval of variable payment life annuities reflects growing demand for predictable retirement income.
"Members have to start to take a much more preventative and proactive ownership over their own retirement," he added.
Having spent most of his career focused on accumulation, he now fields questions from clients asking what they should offer members once they reach that milestone and whether those members are even prepared. Retirement preparedness, he believes, will be a central theme going forward, along with annuity-style options and broader de-risking strategies.
Connolly also sees the coming year as pivotal for AI stocks, which will need to demonstrate profitability after years of investor patience. To that end, Connolly sees AI playing a significant role in retirement planning, functioning as a personal assistant that can field questions and prompt action.
While he emphasized legal guardrails will be necessary to ensure any AI-generated guidance is reviewed with a qualified professional, adoption is already underway across investment and consulting functions.
And like smartphones before it, he expects AI to boost productivity and, ideally, help individuals build more robust retirement plans.
“It's almost going to be like your personal robot. It's going to make us significantly more productive and that's something that will improve, we hope, people's ability to create a retirement program and be your own individual advisor to hopefully advise you when you need to get professional help,” he said.
