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BMO: Nearly 4 in 10 Canadians Contributing to 401(k)-Like Plan

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Nearly 4 in 10 Canadians contributed or planned to contribute to the Canadian equivalent of a 401(k) plan before a government-imposed deadline to defray income taxes for the 2011 tax year, according to a new survey.

BMO Financial Group, Toronto, Ont., published this finding in a summary of results from its Third Annual Post-RRSP Deadline Study. The survey of 1,500 Canadians was completed online from February 21 to February 23 using Leger Marketing’s online panel, LegerWeb.

The report finds that, despite ongoing volatility in the financial markets, 38 per cent of Canadians contributed or planned to contribute to their Registered Retirement Savings Plans (RRSPs) before the Canadian’s government’s February 29th deadline. The participation rate remained essentially unchanged from the previous two years (39% last year; 38% two years ago).

Additionally, the BMO study finds that Canadians have contributed an average of $4,670 (CDN) to their RRSPs this year, as compared to $4,538 last year.

Among the study’s other key findings:

  • Men were more likely to have contributed to an RRSP than women this year (41% versus 34%)
  • Alberta, Saskatchewan and Manitoba have the highest proportion of those who contributed to an RRSP in the country (42%)
  • British Columbians contributed the highest average amount in the country ($6,703)
  • Mutual funds were the investment of choice this RRSP season, with 59% investing in them, followed by Canadian guaranteed investment certificates or GICs (25%), equities (22%), bonds (12%) and ETFs (6%)

Of those who did not make a contribution this year, the survey says, 61% cited a lack of funds as the reason. This was followed by:

  • Already having enough money for retirement (14%)
  • Lack of confidence in the economy (9%)
  • Did not think it was important to make a contribution (4%)