New Report: Impact of COVID-19 on Pensions and Benefits in Canada

New Report: Impact of COVID-19 on Pensions and Benefits in Canada

The COVID-19 pandemic has had significant implications for workplaces across the world, and employers and workers have needed to make difficult decisions regarding retirement, health and paid leave benefits. A new International Foundation report, Impact of COVID-19 on Pensions and Benefits in Canada: Spring 2021 Update, addresses these changes and provides a snapshot of the current environment.

Today's Legal & Legislative Landscape Across Canada

Impact of COVID-19 on Pensions and Benefits in Canada key findings include:

Managing a Remote Workforce

Canadian employers report that before the pandemic, on average, 14% of their workforce worked remotely, compared with almost half (49%) who are working remotely now during the pandemic. This shift has resulted in just under half of employers (46%) reimbursing their workers for specific work-from-home expenses, while 6% of employers are offering a general stipend that covers a wide range of expenses. Of organizations that are providing reimbursements during the pandemic, employers are most commonly reimbursing for office supplies (49%), office furniture (32%), electronic devices (24%) and internet service (22%).

Mental and Behavioural Health Benefits

Organizations that offer mental health benefits to their workers have made several shifts due to the pandemic, including the following.

  • Allowing telemedicine or virtual health for mental health benefits. In June 2020, 10% of employers had added this benefit due to the pandemic, and by February 2021, 23% of employers had allowed for virtual health for mental health issues. (This is in addition to the 47% who were already offering prepandemic.)
  • Relaxing or eliminating the eligibility requirements for mental health benefits (7%)
  • Reducing or eliminating cost sharing for mental health benefits (7%)

Additionally, more than two in five organizations (41%) are adding services to their mental health benefits.

Changes Made to Mental Health Benefits Due to COVID-19 Pandemic

Employee Assistance Programs (EAPs)/ Employee and Family Assistance Programs (EFAPs)

Of employers that offer an EAP or EFAP, 61% cite an increase in the utilization of plan services as a result of the COVID-19 pandemic. The average utilization rate of EAP/EFAP services before the COVID-19 pandemic was 9%, and it has now increased to 15%.

Prescription Drug Benefits

Of organizations that offer coverage for prescription drugs, about one in five (18%) have extended the time allowed under prior authorization periods, followed closely by temporarily waiving premiums for some or all plan members (17%).

Defined Contribution (DC) Plans

Of employers offering DC plan withdrawals, 21% report an increase in withdrawals, up substantially from the 8% increase observed in June 2020. Changes in DC contribution levels vary with 65% of employers reporting no changes to contribution levels, 5% reporting a greater number of changes and 5% reporting a smaller number of changes.

Defined Benefit (DB) and Target Benefit (TB) Pension Plans

For organizations offering a DB or TB pension plan, 27% have reviewed actuarial assumptions/pension plan designs, with an additional 28% considering doing so. One-quarter (25%) of responding DB plans have updated their investment policies, and an additional 23% are considering doing so. Both actions represent substantial increases from June 2020, when 11% had reviewed their actuarial assumptions/pension plan designs, and 6% had updated their investment policies.

Learn More

Impact of COVID-19 on Pensions and Benefits in Canada: Spring 2021 Update addresses changes to DB and DC plans, health benefits, EAPs/EFAPs and workforce staffing levels. It is a follow-up survey to a report conducted in June 2020 by the International Foundation. The full report is available free to members here.

[Upcoming Webcast: Canadian Drug Landscape Update – Sponsored by Canada Life | May 18, 2021 | Register Now]

Brenda Hofmann
Communications Manager at the International Foundation

Today's Legal & Legislative Landscape Across Canada

The latest from Word on Benefits:

Leave a Comment

Your email address will not be published. Required fields are marked *