The Canadian Institute of Actuaries says the federal government's launch of consultations on a potential federal framework for target benefit plans is a potential game changer.
Ottawa plans to propose shared-risk pension plans for crown corporations and federally regulated companies, according to media reports.
The biggest challenge for DB pensions isn’t the cost, but the volatility.
For sponsors concerned about the affordability and sustainability of DB plans, a target benefit plan might just hit the spot
As the interest in target benefit plans grows, a new guide by Aon Hewitt says Canada’s pension industry needs to examine the range of choices available for plan governance.
Target benefit plans may be the answer to many problems facing pension plan design, according to a white paper.
Aon Hewitt has launched a website dedicated to target benefit plans for plan sponsors as well as industry and government leaders.
As part of ongoing pension reform initiatives, pension legislation in various Canadian jurisdictions is being amended to accommodate a new pension plan design feature, commonly referred to as a target benefit provision (although the label differs across jurisdictions). Plans containing target benefit provisions could come in different design forms, but, conceptually, they aim to provide […]
More than four years have passed since expert commissions in Ontario, Alberta, B.C. and Nova Scotia all endorsed target benefit plans (TBPs). TBPs are generally regarded as superior to DC arrangements since longevity risk is pooled and the intractable problem of educating a diverse population on myriad investment options is neatly circumvented by having one common fund. TBPs are also more suited to collective-bargaining situations since all members have the same investment return. Assuming that traditional DB pension plans are no longer viable in industries with volatile profitability—which means most industries—TBPs are the way to go.
In much of the western world, DB plans are on the endangered list. In some countries, such as Australia, these plans are virtually extinct.