Employee Financial Literacy Blog

A better way to reform Old Age Security (OAS)

Posted by Frank Wiginton on Tue, Mar 29, 2016

OAS_Reform.pngThe goal of recent changes and discussion around OAS reform has been to reduce the financial burden on the government and to help ensure the viability of OAS going forward. When the Conservative government led by Stephen Harper made changes in 2012 to increase the age of eligibility from 65 to 67 many experts said that this would have a short term impact on reducing the burden but long term the impact would be negligible.

To build true reform we need to look at the purpose of OAS and why it was created in the first place. Originally introduced in 1927, OAS was intended to provide a means-tested pension for senior men and women who had little to no-income.

"The purpose of OAS is to provide a pension for those seniors who have little to no-income."

Although OAS has been reformed many times over the years, its purpose still hasn’t changed, but has our society and other support structures? We now have a contributory pension (CPP) that didn’t come into existence until 1967 and the addition of Guaranteed Income Supplement (GIS) to add additional funds to support lower income seniors. Another monumental change in seniors’ income and ability to qualify for social benefits was the introduction of pension income splitting in 2007 which saw government OAS payouts increase by nearly 10%.

Using 2016 numbers, a couple could have a net combined taxable income of over $147,000 a year and still qualify for their full Old Age Security benefits. Does the benefit still match the purpose of OAS?

For years I have helped Canadian Retirees prepare financial plans and legally leverage the tax programs and structures to maximize their assets and minimize their taxes. I have routinely found ways to make it so that individuals and couples who have millions in assets can still qualify for their full Old Age Security benefit. Are these the people who the OAS was intend?

True reform would see the return of OAS to its intended purpose, to provide income to those seniors who have little to no-income. In a political arena this is highly unlikely as it would be VERY unpopular. Many now see the OAS as an entitlement and much the way Guaranteed Income Supplement was a temporary measure when it was introduced in 1967, it is now a permanent benefit.

We need to find a compromise between the political possibility and return to the intend purpose of the OAS.

I will begin this idea by saying I have not fully researched the implications of it, rather looked at many of the fundamentals surrounding it. I have considered the need to keep it simple so that it can be easily communicated without confusing the issue. I leave it to those of you with the knowledge and access to information to fill in the blanks and offer intelligent comment to further the discussion.

The new idea: Reduce the income threshold and the recover tax (claw back) rate to a level more representative of those with a low income. Currently the OAS income threshold is $73,757 (2016) and the OAS benefit is reduced by $0.15 for every dollar over that amount. This results in the full maximum benefit amount being clawed back once the income is greater than $119,398. The new OAS would see the income threshold start at $43,332 and only reduce benefits by $0.09 for every dollar over that amount, resulting in a full claw back at the same $119,398.

So if we look at a few examples of the impact this might have on those receiving benefits:

A couple with combined net income of $110,000 that can be split evenly and each qualify for the maximum OAS. Their net income would be $55,000 each. Today they would each qualify for $6,846 in OAS benefits and would have none of it clawed back. Under the new idea OAS they would still receive $5,796 in OAS benefits each as $1050 would be clawed back. (($55,000-$43,332)*0.09)

Will a $2100 reduction in benefits be detrimental to household with over $100,000 in combined income? Maybe, but is that the purpose of OAS?

Part two of the idea is to recognize the additional costs of living as a single. The change in the threshold for singles would begin at $54,900 with benefits reduced by $0.09 for every dollar on income over $54,900 and under $73,757 and a reduction of $0.11 between $73,757 and $120,720.

So a single senior with an income of $65,000 a year would have received $6,846 would now receive $5,937 as $909 would be clawed back. (($65,000-$54,900)*0.09)

Additional discussion and research should be done to see whether these social benefit income tests should be based upon net income (line 236) or taxable income (line 260). These changes may be more palatable if we changed the income threshold to be based upon taxable income (line 260) after all tax credits are factored in. (Maybe part 3?)

With this new idea, OAS begins to return to its original purpose while continuing to provide the benefit many believe they are entitled to.

I write this to encourage intelligent, thoughtful discussion of a pressing financial and political issue. Please share your thoughts and ideas and spread the discussion through sharing this post.

Tags: CPP, financial wellness, OAS, pension, financial well-being, politics

Personal Finances Costing Canadian Businesses $51 BILLION a Year!

Posted by Frank Wiginton on Tue, Nov 12, 2013

Productivity Lost to financial distressThrough our Financial Education in the Workplace survey of Canadian employees, we learned that 25% are financially distressed and an additional 41% are stressed when it comes to their finances.

Through research we know that financially distressed employees spend an average of 13% of their day at work dealing with their finances and the others who are less stressed spend on average 4% of their day at work but not working (presenteeism).

This alone adds up to lost productivity of Canadian workers totaling more than $51 BILLION!

Working Population 17,500,000  
Average Income $47,868  
Employee Cost $11,967  
Financially Distressed (25%) 4,375,000 13%
Financially Stressed (41%) 7,175,000 4%
Lost Productivity cost $51,203,801,250  

Although this may be an over simplification of the calculation a deeper in-depth analysis will only lead to an even larger value. Financial stress doesn’t only impact employees’ productivity; it also impacts their overall wellness. More than 60% of employees cite personal finances as their number one stress.

Financial stress impacts mental health: Those with high debt stress are six times more likely to suffer from depression and seven times more likely to suffer from high anxiety. Their physical health is impacted as well: employees are twice as likely to suffer a heart attack, three and half times more likely to suffer from ulcers and digestive track problems, and three times as likely to suffer from migraines or headaches.

Debt Stress

Financial illiteracy is becoming a pandemic in this country and it is time for Canadian businesses to recognize the impact it is having on their bottom line.

Take a few minutes to learn more about how financial education can increase productivity and profitability in your organization by downloading the whitepaper: http://info.employeefinancialeducation.ca/Employee-Financial-Literacy-White-Paper

Employee Financial Education White Paper




Tags: Employee wellness, workplace wellness, financially distressed, Financial Literacy, presenteeism, financial wellness, absenteeism, corporate financial education, employee financial education, employee education, wellness

Are your finances keeping you awake at night?

Posted by Frank Wiginton on Thu, Sep 05, 2013
“If you want to live a happy life, tie it to a goal, not to people or things.”

― Albert Einstein

Employee Financial EducationIf your personal finances are keeping you awake at night, you are not alone. The biggest cause of insomnia for many has been their stress and anxiety around their personal finances. In fact more than 60% of Canadians cite personal finances as their number one stress.  Surveys and studies since 1985 have found that the two greatest stresses in people’s lives are work and personal finances. 

For the last 14 years I have been working with people to help them sleep better at night. When I help them get their basic finances in order, from managing debt, to organizing cash flow, to protecting their family and planning their retirement, the same result comes from it - Relief.

What has been the biggest change? Are they wealthier? No. Are they poorer? No. Do they have more debt? No. Do they have better investments? No. Are they making more money? No. So what changed that provided the relief?... Understanding. They have a clear understanding of their financial situation and what they need to do to be financially successful.

The majority of people I work with and many of those I encounter share the same common trait when it comes to their finances – they don’t have their basic financial affairs in order and don’t know where to start.

This isn’t surprising to me as we are bombarded with many confusing messages from the media, the financial services industry, the Bank of Canada, and even our parents, uncle or best friend. Who can you trust? And the bigger question… where do you START?

Over the years, I developed a process to help people achieve the understanding necessary about their finances and the priorities for their life. It is important to understand that this process only works if you truly are ready to deal with your finances.

The critical first step, that is often overlooked, is to set clear realistic goals. Many struggle to define what they truly want to achieve and spend much of their life going day-to-day in hopes that one day it will all work out. This step is so critical to your success because you need to change your focus to what is really important to you. Keeping those things that are most important to you top-of-mind is instrumental in achieving real financial success.

One Frank Thought – To help you be successful with your goals, share them with many people. They may be able to help you achieve them and they can help hold you accountable to them.

Another critical component is to be able to differentiate between wants and needs. Take a good look at everything around you and be honest with yourself – Are these things around you wants or needs? To truly help you do this, ask yourself this – Do I want this more than I want that trip to Hawaii? Or whatever your goals are.

This was a big thing for my wife and I when we first got together. We would be out at a store and she would come across a nice blouse or pair of shoes and I would ask her. “Is that a want or a need?” I got some very interesting looks. Eventually she started catching on and found some clever ways to explain why it was a need.

Many people ask me, “If you gave just one piece of financial advice, what would it be?” I tell them the secret to understanding your finances and being able to achieve financial success comes down to just one thing. All other financial areas and issue stem from this one thing. It is the tipping point of financial understanding and the linchpin to financial success. It is what separates those that can save and those that can’t. Those who can manage their debts and those who drown in debt.  If you want to start sleeping better at night do this: Know exactly how much money you spend and what you spend it on each month!

Once you have this understanding, you will be empowered to make better decisions with your money. Remember, money is finite; if you spend it over here, you don’t have it to spend over there.

By combining your knowledge of your goals with refocused prioritization of wants and needs and an understanding of how much money you spend and where you spend it – you will be well on your way to financial success and a better quality of life!

To help you START on this journey to financial understanding, I have written a book called How to Eat an Elephant: Achieving Financial Success One Bite at a Time. The book takes you by the hand and leads you step-by-step through the process of getting your financial affairs in order. It includes simple, almost fill-in-the-blank online tools to help you set your goals, figure out where you spend all your money and so much more. Available at all Chapters Indigo stores and online at amazon.ca.


Tags: financially distressed, financial wellness, employee financial education

The Tipping Point to a Successful Wellness Program

Posted by Frank Wiginton on Wed, May 08, 2013

{This post was originally written for the HRIA newsletter}

Financial WellnessSTRESS has the biggest impact on  workplace wellness. Many wellness programs have a strong focus on stress management that addresses the symptoms of stress but not the cause.

For decades now this has been a focus of many surveys and studies. The results of these studies have consistently identified the two principle causes of stress to be work and personal finances.

The impact of this stress has led to a myriad of health issues and behaviours that negatively affect the employee’s productivity and ability to conduct themself appropriately. Most companies already provide programs to help employees with their work stress but what about the bigger contributor to employee stress - personal finances?

Employee financial education must be a critical component of any wellness program because if the largest contributor to employee stress is not addressed, the effectiveness of any wellness program will be limited.

In 2009, Desjardin Financial did a survey and found that 61% of people cited personal finances as their #1 source of stress. In 2012, the Employee Financial Education Division found that 48% of employees felt their level of financial stress was high-to-overwhelming and that more than half (52%) indicated distress over financial matters contributed to irritability, anger, fatigue and sleeplessness. In fact, research from the Consumer Credit Council Services in the US found that employees who are financially distressed spend on average an hour a day at work dealing with their personal finances.

To quickly understand if your organization’s employees may be struggling with personal finances, take a look at drug benefits usage and EAP service requests. Since 2008, Shepell fgi has reported that the number of EAP requests for help with personal finances has exceeded all other EAP requests combined.

A comprehensive financial education program for employees that addresses much more than just pensions and retirement will have a significant impact on reducing the financial stress of employees. Employee financial education isn’t the only solution to substantially reducing employee stress, but it needs to be part of the solution.

A short story to illustrate the point:

Barbara woke up early as usual to start her day and to enjoy a few minutes of quiet before her husband Mike and two children got up. Sitting in the kitchen, lingering over a cup of coffee, her mind started racing through the many things she needed to do. Once again she had awoken with a headache, which she strongly felt as she looked around the kitchen and saw the mail sitting in a neat pile. Barb slowly stood up to get some Tylenol and as she fussed with the protective cap she glanced down at the mail pile noting, for the hundredth time, that these bills needed to be handled. Then, her household began waking and it took her mind away from the stress of bills and finances and back to getting on with the day.

Barbara arrived at work, head still pounding, and reviewed the tasks ahead. A reminder popped up, saying that she needed to get her son Brandon some new skates for this weekend’s hockey tournament.

After work, Barb and Brandon went out to get his new skates and she couldn’t believe how expensive they were, especially since they were only going to last him one year. At the cash register, the cashier looked at Barb and said “I’m sorry ma’am but your card has been declined. Do you have another one or would like to pay with cash or debit?” Embarrassed and slightly angry, Barb dug out her debit card and bought the skates.On the way home she called Mike and began to berate him about the credit card, asking why it had not been paid.

That evening and the next morning no one in the house was happy. Barb was STRESSED and didn’t feel like talking to anyone at the office. She sat quietly through the morning meeting and could only think about the night before. Barb’s boss, Sarah, called her into her office just before lunch to ask what was going on. They talked and Sarah told her to take the afternoon off and go to the gym to attend two of the new wellness workshops.

Barb really got into the yoga class and the teacher welcomed anyone who wished to stay for a session on mindfulness meditation. Barb enjoyed the meditation and found that she was much calmer, relaxed, and de-stressed at the end of it.

Barb was feeling much better as she arrived home earlier than usual and was pleasantly surprised to find the house was empty and quiet, noting that Mike had uncharacteristically cleaned up the kitchen before leaving in the morning. She was thinking how great it was to feel relaxed for a change when she saw the pile of bills. Instantly, she was angry. She could feel the stress and anxiety come flooding back as the heat in her shoulders built, her blood pressure mounted and another one of her headaches started. Barb grabbed the pile of bills and threw it across the kitchen as she started cry. A moment later her daughter walked in with a frightened look on her face. Barb quickly tried to compose herself and reassure her daughter that she was just stressed out and there was nothing for her to worry about. She gave her a big hug as tears began coming back, and she vowed to get their finances in order once and for all.

Later that evening as Barb and Mike went through all their bills, Barb thought back to how relaxed she was after the afternoon of yoga and mindfulness and realized it was all for nothing. She was just as stressed now as she was before. As she and Mike talked while pouring over all the statements, they both realized that they needed help with their finances. If only their wellness program addressed personal finances. 

Financial Education White Paper Series

Tags: Employee wellness, workplace wellness, financial wellness, employee financial education

The Limitations Financial Institutions Face When Providing Financial Education

Posted by Frank Wiginton on Wed, May 01, 2013

Don Stewart, the former CEO of Sun Life Financial, speaks at the 2012 Financial Education in the Workplace Roundtable about the limitations organizations face when providing financial education to employees.


Donald: I think they face the same general limitations as every business, which is every business needs employees to be well placed to help that business thrive and prosper. And, financial education as I said earlier is one of many things that businesses have to worry about. The various financial providers you mentioned such as the banks, the insurance companies, the investment companies and even the pension funds obviously have an advantage in the stock and trade is financial matters, but it fully, they may not be quite as well placed as others because of course, they got to consider their own financial products in that and that might or might not lead to perceptions of non-neutrality.

To find out more about financial education in the workplace, read the recently published whitepaper,Financial Literacy for Employees: Understanding What Makes An Effective Financial Education Program.

Tags: financial wellness, employee financial education, corporate financial literacy

Providing Better Financial Education to Employees

Posted by Frank Wiginton on Fri, Apr 26, 2013

Don Stewart, former CEO of Sun Life Financial, speaks at the 2012 Financial Education in the Workplace Roundtable about what financial and benefit providers can do to improve their communication with employees.


Donald: Oh I’m very firm believer in that we can all do better in all of our businesses. And the work of the task force in financial literacy clearly demonstrated that the financial service providers can do better, need to do better, have opportunities to do better in financial communication. And we cite a quite dramatic example of information going to customers that was considerably too complex than it need to be to deliver its key message.

To find out more about financial education in the workplace, read the recently published whitepaper,Financial Literacy for Employees: Understanding What Makes An Effective Financial Education Program.

Tags: financial wellness, employee financial education, corporate financial literacy

The Economic Impact of Employee Financial Education

Posted by Frank Wiginton on Wed, Apr 24, 2013

Gary Rabbior, President of the Canadian Foundation for Economic Education (CFEE), speaks at the 2012 Financial Education in the Workplace Roundtable about how financial education improves relationships between employers and employees.



Gary: There’s two dimensions in being an economics, you have micro economics and macro economics. I don’t know macro basis within individual companies not only can it provide benefits to the employees. It can helps in a better relations between employer and employee. If you’re actually working together for the betterment of the lives of your employees, employees are going to be appreciative of that. It ultimately will manifest itself and gonna change in the workplace.

On the macro level, the more that we can do this across the society, individual households collectively can better attended their financial affairs to the collective activities that we would go on various workplaces across the country. If in fact, we get the benefit that we could foresee from employers in the sense of higher productivity, happier employers or creativity that comes from less anxiety, then we can collectively benefit as a society too from those kind of outcomes achieve in our companies. 

To find out more about financial education in the workplace, read the recently published whitepaper,Financial Literacy for Employees: Understanding What Makes An Effective Financial Education Program.

Tags: financial wellness, employee financial education, corporate financial literacy

The Importance of Financial Education in the Workplace

Posted by Frank Wiginton on Fri, Apr 19, 2013

Don Stewart, former CEO of Sun Life Financial, speaks at the 2012 Financial Education in the Workplace Roundtable about why financial education in the workplace is important.


Donald: Financial literacy’s is an important topic for many reasons including the fact that where is getting a more complicated place, so it’s more difficult to make decisions, because there is more choice, there is more complexity and in some cases there is significant economic challenge out there. So to get it right for your financial economic situation is becoming increasingly challenging and it’s therefore important to know more about the basics, about your choices and why you should do certain things and stay away from other choices. Personally, I feel very strongly that workplace is an appropriate venue for financial training. It’s a place that many of us spend a great deal of time at. We have the resources of technology available at the workplace for many of us and the employer is in a position to provide education center around wanting the number of cases, a very comprehensive range of benefit and savings programs for employees.

To find out more about financial education in the workplace, read the recently published whitepaper,Financial Literacy for Employees: Understanding What Makes An Effective Financial Education Program.

Tags: financial wellness, employee financial education, corporate financial literacy

The Challenge for Businesses in Providing Financial Education

Posted by Frank Wiginton on Wed, Apr 17, 2013

Don Stewart, former CEO of Sun Life Financial, speaks at the 2012 Financial Education in the Workplace Roundtable about the competing initiatives that work against the widespread practice of financial literacy in the workplace.


Donald: What business in virtually every country face a great many challenges including importantly competing with each other and so financial literacy itself has to compete with  many other priorities, because obviously the first goal of the business is to thrive and prosper. And it’s only if financial literacy can be seen to contribute to that, that it’s able to get it, a place at the table and so competition for attention like any what while initiative is a fact of life. 

To find out more about financial education in the workplace, read the recently published whitepaper,Financial Literacy for Employees: Understanding What Makes An Effective Financial Education Program.

Tags: financial wellness, employee financial education, corporate financial literacy

How Financial Literacy can improve the health of your workforce

Posted by Frank Wiginton on Mon, Apr 15, 2013

When people discuss reasons to teach financial literacy, retirement savings and the dangers of debt often come up. What’s not talked about is the effect that being in debt or having no savings can have on someone; people who are having money problems are typically more stressed and less healthy than those who are financially secure.

Financial WellnessThere are several studies that point to a relationship between money and stress. A 2009 Desjardins Financial Security study, for instance, found that 61% of employees cite money problems as a leading cause of stress. 25% of workers found that debt is their main concern while 45% feel their level of financial stress today is high to overwhelming.

Another study, conducted by the Associated Press and AOL in 2008, found that people with high stress face a number of health-related issues. Here are some of the findings from that study:

  • 29% of people with debt-related stress suffered severe anxiety, compared to 4% who were stress free
  • 23% had severe depression, compared to 4%
  • 44% experienced migraines or other headaches, compared to 15%
  • 51% had muscle tension and back pain, compared to 31%


When people are sick they stay away from the office. A report from the U.K.-based Chartered Institute of Personnel and Development, found that employees are absent from work at least one week a year due to health reasons.

All of these illnesses and absences come at a great cost to employers. A 2005 academic study found that financial stress could cost companies up to $2000 per employee; that may be even higher these days.

When people become financially literate, their stress levels drop and, as a result, they become healthier and more productive.

With illnesses caused by financial stress costing companies so much money, it only makes sense for businesses to offer financial education in the workforce.

Through comprehensive financial education — via group sessions, one-on-one training, webinars and more — employees will be able to get a handle on their money issues and then come to work less stressed. When that happens, illnesses and absenteeism will fall and workers will become more productive. Not only will companies save money because more people will be at work, but they’ll also make money as those less stressed out workers become more engaged. 

To find out more about financial education in the workplace, read the recently published whitepaper,Financial Literacy for Employees: Understanding What Makes An Effective Financial Education Program.

Employee Financial Education White Paper

Tags: financial wellness, employee financial education, corporate financial literacy