During Benefits Canada’s annual DC Plan Summit, plan sponsors participated in interactive sessions. They split into small groups and were given questions to discuss. Based on these discussions, moderators later offered their insights and relayed key take-aways.
Janice Holman, principal with Eckler Ltd., shares the best ideas from the topic they discussed.
The Challenge:
Despite the name, most DC plans are conceived and run as saving vehicles, not ones that generate income. This could pose challenges for retirees, who may think that they will have a pension of significance. Most sponsors care about their retirees, and some listed valid business reasons why sponsor involvement to assist members in maximizing their retirement income makes sense.
Survival Tips for Employers:
- Sponsors need to focus attention on the goal of the plan: income or savings vehicle. This will shape DC plan design, communications and investment lineups.
- In light of the high impact of de-accumulation decisions, sponsors need to determine whether and how involved they want to be in helping members in those decisions.
- Whether or not sponsors get involved beyond accumulation, the impact on their fiduciary responsibilities has to be considered, as it will surely be different from what they now perceive.
Additional videos from the DC Plan Summit can be found here.