Mercer Canada’s president has a warning for us: ‘We haven’t saved enough for retirement’

Canada’s “three-legged stool” approach to retirement is looking a little wobbly these days.
The country has long sat near the top of global indexes for retirement planning by leaning equally on government funded, employer supported and individual retirement savings, but in recent years its position has been slipping.
That’s because fewer than 40 per cent of Canadian workers have access to a registered pension plan, and nearly half of those nearing retirement worry their personal savings won’t be enough to cover their costs.
“Without that accessible workplace pension, personal savings and government benefits become more vital sources of income,” says Mercer Canada president Teresa Palandra from her office in downtown Toronto. “In very simple terms, we haven’t saved enough for retirement.”
Palandra took the top job in Canada for the Vancouver-founded global financial consulting firm 18 months ago and has been interested in actuarial sciences — which measures and manages the cost of financial uncertainty — since high school.
“Most people don’t even know what an actuary is — certainly not at that age, but even later on in life,” she says, adding that she was introduced to the profession by a high school guidance councillor who recognized her passion for math. “I kind of liked the mystique about it, that not everyone knows what an actuary is, so there was a bit of a cool factor in what some would consider a bit of a nerdy career.”
The Toronto native earned a bachelor’s degree in actuarial sciences from the University of Toronto and began her career as an analyst at a small firm that was later acquired by Aon, then for Watson Wyatt (now Willis Towers Watson), before joining Mercer in 2006, where she’s remained since. As president of Mercer Canada, Palandra now oversees the firm’s wealth, health and career practices nationwide.
The company was founded in 1945 by William Mercer who helped design the pension plan for the Powell River Company, which operated a pulp and paper mill near Vancouver. The actuarial and benefits consulting firm was acquired by global professional services firm Marsh McLennan in 1959. Mercer now has more than 20,000 employees in 43 countries, including 900 at its 11 Canadian offices, and operates in 130 countries. 
Palandra recently spoke with the Star about the implications of an aging population and longer life expectancy, why diversification is the best answer to volatility, and the challenges of balancing short-term financial needs with long-term savings.
I had been at Watson Wyatt for about eight years, and some of the individuals that I had worked with and admired were making changes in their career, so I started to think about whether it was time for me to also move on. I knew some people at Mercer, so I decided to take the leap. I was doing very similar work as an actuary and a retirement consultant, but looking back, it was probably the best decision I ever made.
There are a few things, but first is the people. I know everyone says that, but I truly believe in my heart that I work with incredible people. I’m also very goal oriented, and there’s always been new opportunities to grow my career. It’s also just a high-quality firm; one that has real purpose, values and integrity.
Besides my years of experience and a deep understanding of our business and how we support our clients, I’ve worked in different roles at the firm, which has given me opportunities to learn and experience and lead different parts of our business.
I previously led our Toronto office, which oversees all our different practice areas — our career practice, health and benefits practice, as well as retirement and investments — so I’ve had opportunities to understand those solutions.
A lot of it comes back to just being curious and a lifelong learner, always wanting to challenge myself. That helped me contribute in different ways to these other practices where maybe I’m not necessarily the subject matter expert, but I do bring another lens.
Canada is one of the largest geographies that we operate in, so it is a very important part of the portfolio for Mercer, and globally for Marsh McLennan.
Mercer and the CFA Institute publish a Global Pension Index each year, and the last report in 2023 gave Canada a B rating, and ranked it 12th in the world.
In Canada we have what they call a “three-legged stool” approach to retirement; You have government pension programs, you have workplace plans, and you have personal savings, and this diversification is a strength of our system, but there were also challenges, which is why we only got a B.
One of the biggest challenges is the coverage for employees, particularly in the private sector. With less than 40% of Canadians participating in a workplace plan, personal savings and government benefits become more vital sources of income.
In very simple terms, we haven’t saved enough for retirement.
Part of it is due to a lack of awareness, education, financial planning, but we also have the fact that people are living much longer. The Canada Pension Plan, for example, was established in 1965, when the retirement age was 65 and life expectancy was 71, so people expected to spend about six years in retirement. Today the retirement age is still 65, but life expectancy is about 83, so we’ve gone from six years of retirement to 18, but most people haven’t tripled their savings since then.
Then there’s an even greater gap for women, which could be 20 per cent or 30 per cent due to historical and ongoing gender wage gaps, career interruptions, and lack of pension credits during caregiving. Combining that with all the challenges in the economy, like inflation, interest rates, market volatility, and household debt, brings us to where we are today.
There are opportunities to strengthen the system, including looking for ways to increase pension plans, more accessible multi-investment products, increasing household saving and reducing household debt. One of my personal favourites, data analytics, could also help Canadians measure and monitor their progress.
There are also strategies to better support women, like flexible plan design, which allows people to save for different life events during their working career in a single plan, whether it’s your first home, your child’s education, or retirement. We know that flexibility encourages higher savings, since people are afraid that the money won’t be accessible when they need it, and you can design plans that allow women, for example, to continue contributing during periods of leave so they don’t fall behind.
I appreciate that many people — especially younger generations — face financial challenges that take precedence over planning for retirement, but even if retirement feels far away the key is to start small and start early to let the power of compounding interest work in your favour. What’s key is that you’re diligent about paying down debt as quickly as possible, so that you can turn your focus to accumulating adequate savings for retirement.
People also need to make sure they’re not leaving money on the table. If you work for a company that offers a pension plan or some type of savings arrangement, really try and maximize the benefits of that plan.
The pitch for employers is that it is one of the most valued employee benefits, so from an attraction and retention standpoint, there is a strong business case. Having a more financially secure employee population also means they’re less stressed and distracted by their finances.
For those in the gig economy there are only two legs to the stool, which puts more pressure on personal savings, so for them it’s even more important to start saving early.
I certainly appreciate the constraints that individuals have, but I think you nailed it when you said, “single asset.” There is something to be said about diversification and not concentrating everything into one asset class, such as real estate, especially for those without a company plan.
There are situations where paying off debt first is the right thing to do, and situations where you’re going to want to try and find ways to save something, even if it’s small, just so that you can help it accumulate, so there isn’t a one-size-fits-all answer.
There’s always been some level of uncertainty in our economy, and we’ve had to take steps to weather that. Diversification is one of your best tools in navigating through uncertain times. I would just encourage Canadians to focus on things that they can control, like leaning into company provided pension plans, leaning into education, leaning into financial awareness, leaning into their own savings — I think that is what’s going to secure Canadians’ retirement future most successfully.