TORONTO, ON--(Marketwired - September 25, 2014) - Aon Hewitt agrees with many elements of the proposed Blueprint issued by the Financial Consumer Agency of Canada for advancement of financial literacy among Canadian's seniors. In particular, as noted in our response to the Blueprint, we are fully in support of the goals identified in the Blueprint.

The actuarial profession has long recognized the importance of objective information and education to help seniors make educated and informed financial decisions. We believe the following four principles are keys to the success of any education strategy:

  1. Simplicity and understandability of the information provided -- Seniors need to gain a basic understanding of core financial principles, the income options available to them, and the associated advantages and disadvantages so that they can make informed decisions that best meet their needs.
  2. Access to information -- In-person meetings, whether one on one with an advisor or in a group, allow more interaction and, as a result, have a better learning outcome. Local community centres, religious or cultural centres, and other places that seniors often frequent provide a familiar setting and may be used as "financial literacy" classrooms.
  3. Independence and objectivity of information -- Financial information is likely to be more reliable if the source is an independent unbiased expert. Transparency and objectivity of the partners and educators is a crucial criterion.
  4. Ongoing monitoring -- The success of the financial literacy initiative can be measured by assessing its impact on the level of understanding and behaviors of seniors.

"Our clients across the country continue to express a growing interest and concern with respect to their employees' financial literacy and retirement preparedness," says Bita Jenab, Partner in Aon Hewitt's Vancouver office and leader of the firm's national Financial Planning Practice. "Moreover, our clients recognize the critical importance of independence in providing financial planning services to their employees. They retain us because we are independent and provide unbiased, objective information that is educational in nature."

Aon Hewitt suggests that the following goal be added to those set in the Blueprint: "Assist more Canadians in setting personal financial objectives." Our experience shows that many people do not know how much income they will need in retirement because they have not defined their retirement goals. Helping Canadians set goals and quantify their income needs before and after retirement is the very first step. Once that is in place, then we can help them with the planning process and talk about sources of income such as government benefits, employer-sponsored plans and personal savings.

"The primary purpose of the proposed national strategy is to encourage more Canadians to prepare financially for their senior years," adds Ms. Jenab. "People need to be able to overcome existing barriers and disincentives including inertia and procrastination, balancing today's expenses with saving for tomorrow and understanding the future value of that dollar saved, and the overwhelming number of choices offered by banks, financial planners, employers and well-meaning relatives providing advice. Without a reasonable level of financial literacy, individuals are paralyzed into inaction."

Even when a financial decision is narrowed down to one area, for example, an employer's retirement savings plan, the responsibility to make investment decisions or even choosing whether to participate or not can be overwhelming. Many individuals with access to employer-sponsored retirement savings programs do not take full advantage of the offering and often leave money on the table.

Defined contribution ("DC") pension arrangements are an often overlooked retirement savings vehicle that could be utilized more effectively. DC plans suffer from several acute and persistent problems such as low savings rates, members' limited ability to make informed investment choices, and the uncertainty and complexity of options for the decumulation phase. Providing tools and resources to address these issues may motivate individuals to participate in their employer-sponsored DC plan, increase their savings rate and make optimal use of the plan and the opportunities provided.

In Canada, many sponsors of DC arrangements would like to provide more information and education to their employees but are concerned about the possibility of litigation. The Capital Accumulation Guidelines (CAP Guidelines), which serve as "best practices" for the governance of such plans, provide no legal protection to plan sponsors who follow them.

"In the United States, the law provides protection from liability to those plan sponsors who provide their plan members with appropriate choices and advice. Given that DC arrangements, especially group RRSPs, are used by so many Canadians as a retirement savings vehicle, endorsing the CAP Guidelines as a safe harbor for employers would strengthen the government's partnership with employers and empower both parties to act in a way that would enhance the financial well-being of many Canadians."

About Aon Hewitt
Aon Hewitt empowers organizations and individuals to secure a better future through innovative talent, retirement and health solutions. We advise, design and execute a wide range of solutions that enable clients to cultivate talent to drive organizational and personal performance and growth, navigate retirement risk while providing new levels of financial security, and redefine health solutions for greater choice, affordability and wellness. Aon Hewitt is the global leader in human resource solutions, with over 30,000 professionals in 90 countries serving more than 20,000 clients worldwide. For more information on Aon Hewitt, please visit

About Aon
Aon plc (NYSE: AON) is the leading global provider of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 65,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via innovative and effective risk and people solutions and through industry-leading global resources and technical expertise. Aon has been named repeatedly as the world's best broker, best insurance intermediary, reinsurance intermediary, captives manager and best employee benefits consulting firm by multiple industry sources. Visit for more information on Aon and to learn about Aon's global partnership and shirt sponsorship with Manchester United.

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Alexandre Daudelin