Joel Schlesinger © Postmedia Network Inc.
Defined benefit (DB) pension plans, which provide guaranteed retirement income for life, are often the envy of those who do not work in the public sector, where the plans are most common.
Yet one Canadian non-profit pension plan provider has solved the challenge of making this highly sought-after benefit available to private sector and non-profit employers across the country.
“The defined benefit pension is considered the gold standard of retirement plans, but it’s increasingly only available to individuals working in the public sector,” says Graham Stone, acting vice-president, pension solutions at CAAT Pension Plan.
“The fact is most workers don’t have access to this type of benefit. So yes, there really is a bit of pension envy going on.”
CAAT’s mission statement is Pensions for Everyone and its innovative DBplus plan is making that more of a reality every day.
“At CAAT, we provide a modern lifetime pension solution that is open and accessible to all Canadian employers to support their talent attraction and retention strategies,” says Sabeen Purewall, vice-president, solutions and partnerships at CAAT.
In today’s competitive job market, offering a DB pension plan like DBplus can help attract and retain existing, valued employees.
“Employee turnover is costly,” adds Purewall. “Even before an employee exits, disengagement, decreased productivity and low morale can take hold. The quiet departure phase affects the bottom line — turnover can have irreversible consequences on workplace culture.”
DBplus offers flexibility and affordability for employers by collectively pooling the investing power of nearly 400 different organizations across Canada, including those in Calgary.
“We cover 20 industries with 94,000-plus employees, and we’re averaging one new employer joining our plan every three business days,” Purewall says.
Employers join based on a contribution level that is within their budget. This offers them cost certainty. Unlike traditional DB plans, employers will not be on the hook for unfunded liabilities.
DBplus is also more appealing to workers than other retirement arrangements like defined contribution or group RRSP plans because, with those offerings, there is the potential to outlive your pension.
“Group RRSPs may be better than nothing but employees prefer pensions like government workers have,” Stone notes.
Unlike group RRSPs, DBplus gives workers retirement income certainty. With CAAT’s plan, they receive a monthly payment in retirement for life that grows with inflation.
What’s more, CAAT’s DBplus plan is secure and well-funded, Purewall says. In fact, the biggest challenge for CAAT is raising awareness about DBplus being available to all Canadian employers as a business solution.
“It’s a great offering and a win-win for employers and employees,” Purewall notes. “Employers get motivated and engaged staff, while employees receive a secure and predictable retirement outcome.”
This story was created by Content Works, Postmedia’s commercial content division, on behalf of Calgary Economic Development.