If DC plan sponsors want employees to become more engaged, they need to influence their behaviour.
And providing advice to plan members can be one way to improve plan member engagement.
“A simple example of this would be pre-retirement sessions,” explained Pat Leo, director, institutional business, Ontario and Western Canada, with Sun Life Global Investments, at Benefits Canada’s Benefits & Pension Summit.
Yamaha Music Canada, which launched its DC plan in 1984, has only recently begun providing education for its employees.
The company has offered an hour-long lunch and learn—basically an Investments 101 course—as well as quarterly meetings with mandatory participation, explained Gus Marcelino, general manager and pension committee chairman.
Although moving in this direction was a big change for employees, he noted that it was important for employees to get some financial advice from a third party.
“We were not going to be as passive as we were in the last 30 years,” Marcelino explained, adding that the company wanted to make it clear that plan members had to take charge.
While providing advice is a difficult issue and controversial, if plan sponsors don’t do anything, members may have difficulty down the road, Leo noted.
“We want them to be informed and engaged so they can achieve the outcomes for their lives,” he said.
All the articles from the event can be found on our special section: 2014 Benefits & Pension Summit Coverage.
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