Executives at Ontario-based public pension plans are enlisting their participants to talk up defined benefit plans to friends and neighbors in hopes of ultimately pressuring their corporate employer colleagues to keep their DB plans.
The efforts all center on grass-roots programs to educate public plan participants on the value of a defined benefit plan as the optimal structure for providing a long-term retirement. The hope, the executives say, is that participants will convince their corporate-worker neighbors about the value of DB plans and they, in turn, will call on their employers to maintain their plans and not shift to defined contribution models.
Among the efforts:
The C$70.4 billion ($55.9 billion) Healthcare of Ontario Pension Plan has "Defined Benefit Ambassadors," plan participants who are educated in the plan's model, said Jim Keohane, HOOPP president and CEO. These ambassadors can then counter "any misleading or incorrect views" of defined benefit plans among people they know who work in other businesses;
OPTrust, which manages the assets of the C$19.1 billion Ontario Public Service Employees Union Pension Plan, has a "People for Pensions" program, educating plan participants about DB plans and their benefits vs. those offered by other retirement plan models; and
The C$9.3 billion Colleges of Applied Arts and Technology Pension Plan's "Building Plan Champions" is a participant- and employer-education program that encourages both to talk with others about the value of a DB plan.
Derek Dobson, CAAT CEO and plan manager, said surveys have shown most Canadians "want long-term retirement protection and are willing to pay up to 10% of pay to get there, with a 10% match from their employer. That would be enough to guarantee retirement security for them. The Canadian culture is such that Canadians want DB plans. The question is, how to get them access."
As an example, in 2016 all but one province approved the expansion of the C$316.7 billion Canada Pension Plan, Ottawa, to increase both employer and employee contributions, and retirement benefits. The holdout, Quebec, does not participate in CPP but has its own similar plan, the C$62.2 billion Quebec Pension Plan, Quebec City.
While executives can tout the advantages of their defined benefit plans, those themes are not always so well known among the rank and file, particularly in the public sector.
"It's about getting plan members to really know about DB," said Mr. Keohane. "There's a huge amount of information out there about DB plan sponsors. Issues like longevity and risk affect all savers. ... You're much better off in a structured pension plan like DB because of pooling and risk sharing. It's important for us to just get that information out there."
OPTrust's "People for Pensions" had a soft launch this year and has "close to 1,000 people signed up," said Hugh O'Reilly, OPTrust president and CEO. "To put that into context, we have close to 44,000 active members and 90,000 members overall. So 1,000 so early is a significant sign-up rate. We also look at how we present ourselves. We've enhanced our use of social media. And our union sponsor hosts conferences with youth and regional members." He said the "People for Pensions" program will run indefinitely.
While much of OPTrust's communication with members is done through traditional media like mail and phone calls along with email, executives there are looking to enhance their communications and "perhaps one day, create an OPTrust app to reach out to its members, talk to them, do research to see what they're looking for from us," Mr. O'Reilly said. "The closer people get to retirement, the more they care about pension funds. But we want younger members to care about it as well."