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Posted by Jimmy Carbonneau, Group insurance and group annuity plans advisor, April 2 2020
Pension Plan
Helping Your Employees Cope With Financial Market Volatility


Global financial markets have been rattled due to the current COVID-19 pandemic. Stock markets were particularly affected and have been experiencing significant volatility. Are your employees wondering about the impact of this crisis on their retirement savings? Below are some answers to the questions they may have.


Historically, stock markets corrections have been cyclical. There are up cycles and down cycles. Until most recently, the stock market was in the longest cyclical upswing on record. For 2019 alone, the S&P/TSX index (Canadian equities) returned nearly +19%. In the U.S., the S&P 500 index (American equities) posted a stunning return of almost +29%.

The stock market meltdown in the first three months of 2020 is certainly overwhelming, but there is no need to panic. This alternating pattern of financial cycles is normal and can even create attractive opportunities for plan members.


Review and confirm your objectives

  • When you enrolled in your retirement savings plan, you must have set some objectives for your retirement (for instance, I want to retire at 65, I would like an annual income equal to 70% of my salary at retirement, etc.). If these objectives have not changed, it is important to maintain your investment discipline. Generally, your investment strategy should not be altered if your objectives are still the same.

Keep a long-term focus

  • It is important to remember that your retirement savings should usually be invested according to your time horizon. For example, if you plan to retire in 20 years time, you won’t be investing your assets like someone who is retiring next year. Staying the course based on your time horizon is key, even in the face of volatility.
  • If your assets are invested in a retirement target date (life cycle) portfolio, your investments already reflect your time horizon. Generally, no adjustment is required as such portfolios are automatically adjusted to your age.

Keep on contributing

  • By continuing to make plan contributions in a down market, you end up buying more shares at a lower cost. Moreover, if your employer is also contributing, it is equally important not to lose out on these contributions (whether the market is up or down).

Avoid acting on impulse

  • In time of heightened volatility, you must avoid making emotional decisions. Witnessing wild daily swings in the value of your retirement savings can be stressful, but beware of panicking. Patience is a better option: this slowdown will be followed by an economic recovery.

Avoid market timing

  • You may be tempted to sell your assets and invest them in a safer product. However, we don’t know what the future holds. By selling at the wrong time, you may miss out on attractive returns down the road.

Take advantage of diversification

  • Putting all your eggs in the same basket can be risky. Investing in different types of assets can be an effective way to better protect yourself against financial market turmoil. If you have a retirement target date (life cycle) portfolio, your investments are generally well diversified and tailored to your circumstances.


If your employees would like to learn more on investing or discuss with a professional, all financial institutions that offer group retirement savings plans have a toll-free phone line to answer questions from employees. Do not hesitate to refer your employees to your retirement plan documents where they will find the number to call.

Moreover, every financial institution has a web portal where employees will find a wide range of relevant information and tools to guide them, along with answers to their questions.


Contact us! We will be pleased to guide you and answer any questions you may have.


Jimmy brings overs 20 years of experience in pension plans. After starting his pension career at the Ontario Teachers’ Pension Plan, he worked as DC Consultant for a large actuarial firm and two insurance companies before joining AGA. With his extensive pension experience, he has developed an acute expertise in the selection, the design and the implementation of pension plans. Jimmy provides his clients with both expertise and insight on their employee benefits.
Jimmy Carbonneau, Group insurance and group annuity plans advisor