Participants urged to tout the benefits of DB plans – Pensions & Investments

Sep 19, 2017

Executives at Ontario-based public pension plans are “enlisting their participants to talk up defined benefit plans to friends and neighbors,” according to a recent article in Pensions & Investments. The executives say their hope is that participants’ colleagues and friends will urge their employers to keep their DB plans and not make the move to defined contribution models. In the article, author Rick Baert looks at various efforts being made to educate public plan participants on “the value of a defined benefit plan as the optimal structure for providing a long-term retirement.” The efforts, which are focused around grass-roots programs, include the Healthcare of Ontario Pension Plan’s "Defined Benefit Ambassadors," the OPTrust’s "People for Pensions" program and the Colleges of Applied Arts and Technology Pension Plan's "Building Plan Champions" program.

Jana Steele, a partner in Osler’s Pensions and Benefits Practice Group, tells Pensions & Investments that the plans' education efforts could bear fruit in the long run; however, "educating people on things like risk pooling takes time." She also states that shared-risk structures like target benefit plans, which have a DB-style payout but can reduce retiree benefits if plans fall below a certain funded status, could be a middle ground for some plans.

"The focus (in Canada) is making it better for everyone," says Jana. "Maybe that's a Canadian attitude. It shouldn't be taking away pensions from everyone."

For more information, read Rick Baert’s full article “Participants urged to tout the benefits of DB plans.”