<!-- Swiftype Variables -->

Pension Funds

CAAT to launch pension fund for private-sector companies without a DB plan

Colleges of Applied Art and Technology Pension Plan, Toronto, plans to create a defined benefit plan for private-sector companies across Canada that have no workplace DB plan, said Derek Dobson, CEO and plan manager.

The plan, DBplus, is scheduled to begin June 1, he said.

While details of DBplus are still being worked out, Mr. Dobson said, plans call for it to use the governance structure, investment asset mix and administration of the C$10.8 billion ($8.6 billion) CAAT plan.

"It's a second plan design under the same pension plan," Mr. Dobson said in an interview. "CAAT will operate as one pension plan with two plan designs."

Under DBplus, employers and employees would each make fixed contributions ranging from 6% to 9% of pay, determined by the employer and, potentially, unions representing employees, according to preliminary documents provided by CAAT. There are no other costs or fees.

Employers and employees would "make contributions. That's it," according to the documents.

Mr. Dobson said DBplus will combine the set-cost benefit of defined contribution plans with traditional DB plan offerings like lifetime pensions, survivor benefits and better risk management.

Earlier this month, OPTrust, which manages the assets of the C$20.3 billion Ontario Public Service Employees Union Pension Plan, Toronto, created OPTrust Select, a new DB plan for public sector, charitable and not-for-profit employers that do not offer a DB plan. The contribution rate in that plan is 3% of earnings each for employees and employers, according to OPTrust's website.

Separately, CAAT and Torstar Corp., a Toronto-based media company that publishes several Canadian newspapers including the Toronto Star, are in negotiations to merge Torstar's C$900 million pension plan with CAAT, Mr. Dobson said. Talks on the merger were cited in Torstar's fourth-quarter earnings statement issued in February.

Mr. Dobson said both CAAT and Torstar have set a target date of Oct. 1 for reaching agreement on the merger.

Previously, CAAT has merged with the C$32 million Youth Services Bureau of Ottawa Pension Plan and the C$100 million Royal Ontario Museum Pension Plan, Toronto.

Ontario regulations allow single-employer pension funds of all kinds to be merged with a multiemployer plan like CAAT.