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
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
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
"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.
For further information:
Sonia Massicotte (French)