TORONTO , May 5, 2014 /CNW/ - PBI welcomes the announcement by Minister of State for Finance Kevin Sorenson that the government will hold public consultations with the goal of creating a legislative framework for target benefit pension plans, or shared-risk pension plans. The new voluntary type of plan would be available to Crown corporations and to all federally-regulated private sector employees including those in Canada's banking sector, telecommunications sector, etc.
This plan offers some key benefits over defined contribution plans and RRSPs such as:
- allowing employees to join together in one plan in order to share longevity risk and investment risk, and achieve economies of scale
- greater predictability of pension benefits
- management by a joint employer-employee governing body with a fiduciary duty
- the ability to manage the plan's funding and investment strategies with a focus on protecting the members' benefits including the ability to fund deficits and restore potentially lost benefits in volatile market conditions and ability to put aside a reserve for unexpected contingencies
- attraction and retention of employees including the ability to offer ancillary benefits useful in workforce planning.
Using its experience with multi-employer pension plans, that could be considered the precursors to target benefit or shared-risk pension plans, PBI will submit its comments focusing on:
- Plan design and policies
- Benefits Funding
- Risk Management
"We are in support of any legislative measure aiming at the creation of new pension plans that could offer better retirement security to Canadians or aiming at ensuring the future of defined benefit pension plans in the current environment. Target benefit plans are intended to preserve and increase the number of employers that can offer employees an affordable workplace pension plan that has a predictable pension in retirement" says Clare Pitcher , Senior Consulting Actuary in Toronto . "We look forward to contributing in the future development of these plans in Canada ."
About PBI Actuarial Consultants Ltd.
PBI Actuarial Consultants Ltd. is an independent Canadian company providing actuarial, administrative, and investment consulting services for pension and group benefit plans, as well as other trust funds. With extensive experience with various multi-employer, negotiated cost or member-funded pension plans, PBI is a recognized industry leader in Canada in the design of retirement objectives, funding policies, and risk management strategies for these types of plans. Visit www.pbiactuarial.ca for more information.
SOURCE PBI Actuarial Consultants Ltd.
- Retirement Benefits
- pension plans