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Background
MC Canada asked PERMA Systems Inc. to develop and perform a Pension Plan Analysis
and Feedback Project survey to assess Pension Plan Members level of satisfaction
with their current Pension Plan.
Objectives
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Determine:
- understanding of current Pension Plan
- perceived value of current Pension Plan
- member satisfaction with current Pension Plan
- identified areas to enhance perceived value
PERMA Systems and MC Canada developed a survey questionnaire that was distributed
to 806 Pension Plan members and 197 employers in May 2001.
- a total of 390 questionnaires were received via mail and facsimile, representing
a response rate of 39%
- a total of 318 employee questionnaires were received, representing a response
rate of almost 40%
- a total of 72 employer questionnaires were received, representing a response
rate of 37%
- The goal for minimum response from Plan Members was set at the industry standard
of 25%
- 25% is the respondent level determined to be accurately representative of
a group
- This project exceeded the stated minimum by 14%, and the total respondent
rate of 39% is considered to be very good
The survey results are reliable to within plus or minus 5%, at a 96% confidence
interval. In simple terms, this means that 96 times out of 100, this same survey,
deployed to the same total population, would achieve comparable results.
PERMA Systems feels that the respondent population provides a reasonably accurate
representation of the total population, although the respondent population contains
a slightly larger percentage of males, Pastors and long-term service employees
than the total population.
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Key Findings
Satisfaction | Communication
| Goals and Horizons | Flexibility
| Risk tolerance | Ethical
considerations
Satisfaction with Pension Plan
- nearly half (49%) of respondents indicated that there is improvement needed
in understanding their pension plan (#7)
- over half of respondents rated "fairly well" when asked if the current
Pension Plan meets their needs
- the next highest response was to "do not know" (31%), indicating
an increased need to educate and communicate the details surrounding the current
Pension Plan (#8)
- information indicates that the majority of members are satisfied with the
investment composition as it currently is (#15)
- respondent answers indicate a good level of satisfaction in MC Canada's current
investment capability (#16)
Communication
- 1/3 of survey respondents stated that they "do not know" if they
are able to get answers to their Pension Plan questions
- however, majority (60%) somewhat or strongly agreed that their questions could
be answered (#9)
- 81% of respondents felt they are kept well informed (#10)
- 25% strongly agreed
- 56% somewhat agreed
- information suggests that the written materials used by MC Canada to communicate
with Plan members has been effective (82%)
- information suggests a Retirement Planning Seminar would be beneficial to
most Plan members (#12)
- an increase in frequency in which Pension Plan information is delivered would
be appreciated by many of the Plan members (#13)
Financial Goals and Time Horizons
- almost half (45%) of respondents currently have an Investment Advisor
- 40% do not wish for additional assistance (#14)
- over half of respondents have over fifteen years remaining until retirement
(#20)
- majority of respondents have a good idea of what their needs in retirement
will be (#21)
- a mix of percentages were identified regarding respondents confidence that
they will be adequately covered for retirement
- most respondents (68%) show a willingness to learn and improve their understanding
on how to manage their money (#29)
Interest in Flexibility
- respondent percentages indicate a trust in MC Canada's current investment
strategies and little interest in investing Pension Plan dollars in "Alternate"
Plans
- 89% of respondents would use a Financial Planner to assist them in choosing
funds to invest in if interested in placing a percentage of their plan in an "Alternate
Fund"
- 45% would use a major Financial Institution
- 44% would use their own Independent Financial Planner
- over half of the respondents would be satisfied with one Pension Fund, maintained
by MC Canada
- 40% of respondents would be interested in a choice of five funds, ranging
from very conservative to very aggressive
Risk Tolerance Profile
- 66% of all respondents chose to rate "moderate" as their preferred
asset class mix with the second highest percentage (18%) rating for conservative
(#19)
- when given a hypothetical investment challenge, majority of respondents (77%)
chose a conservative option to react to the question (#26)
- when asked about risk exposure, there was a near-even mix between respondents,
indicating a moderate risk tolerance (#27)
- survey information indicates that 83% of respondents felt that they are not
confident that they would make competent investing decisions as individuals (#28)
- 48% strongly agree
- 35% somewhat agree
- when asked about return on higher risk investments, majority of respondents
rated moderate aggressive in their chosen approach (#30 and #31)
- when asked about guaranteed returns, respondent percentages rated a moderate
conservative approach (#33)
- majority of respondents (60%) indicated that they should contribute 5% of
their annual income to their Pension Plan, with the next highest percentage (17%
of respondents) indicating they feel it should be 6% annually
- majority of respondents (64%) indicated that they feel their employer should
contribute 5% annually, with the second highest percentage (16% of respondents)
indicating they feel employers should contribute 6% annually
Ethical Considerations
- 84% of respondents feel that it is ethically very important not to
invest in companies involved in tobacco, alcohol and firearms
- 14% feel that it is somewhat important (#36)
- 54% of respondents feel it is important to expand MC Canada's ethical criteria
when investing
- 33% feel it is somewhat important
- 74% of respondents feel all funds should contain ethical screens even at the
expense of significantly fewer funds to choose from
- 22% feel some funds should contain ethical screens
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Patterns
Constructive Patterns
- nearly half of respondents do not fully understand the details of their Pension
Plan
- many respondents are not sure if the current Pension Plan meets their needs,
specifically for retirement
- while current communication efforts regarding the Pension Plan have been appreciated,
many respondents stated that:
- they desire increased frequency in delivery of Pension Plan information
- a higher level of detail in reporting Pension Plan info would be appreciated
- explanation of Administration and Management consulting fees
- explanation of what the fund is actually investing in
- knowledgeable answers to common questions
- explanation of how ethical standards are applied
- respondents written comments reflect a desire for flexible options, diversification
and broader choice in investing
- information suggests that Plan members are not completely satisfied with the
historical rate of return and would like to see improvement
Positive Patterns
- the Pension Plan offered by MC Canada is highly valued among the members and
is considered to be an important part of total compensation
- overall, MC Canada Plan Members are reasonably satisfied with their Pension
Plan
- Pension Plan members are collectively aware that their financial planning
knowledge can use improvement and would be willing to learn how to better manage
their money
- information suggests that efforts made by MC Canada in communicating with
Plan members has been valued and appreciated
- majority of respondents expressed a good level of trust with MC Canada investment
capability and the current investment composition
- majority of respondents value ethical investing and appreciate the efforts
of MC Canada in this area
- feedback has indicated that the initiative taken by MC Canada to conduct this
survey and provide Plan members with the opportunity to give feedback and have
their opinions acknowledged has been valued
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Conclusions
- development of a Comprehensive Communications Plan would be beneficial to
MC Canada and highly valued by majority of the Pension Plan members
- a Retirement Planning Seminar would be beneficial to most Plan members
- Pension Plan members rank as moderate regarding investment options and risk.
While expressing an interest in a more aggressive approach to investing to increase
return on investment, most respondents expressed a desire for safety and guaranteed
return on investment
- there is a strong, although not unanimous, interest in having increased choice
and flexibility to meet member needs
- information suggests that there is a strong shared concern for members' future
financial security and the historical rate of return on investment, which may
indicate a lack of understanding of the value and competitiveness of the current
plan
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