The Challenge
Complex Pension Structure Cause for Concern
Postmedia Network Canada Corporation was tangled in a web of multiple pension plans. The company administered a mix of defined benefit (DB), defined contribution (DC), and group RRSP programs. Further complicating matters, its workforce was scattered across the country and consisted of both non-bargaining and bargaining staff represented by three national unions, each with multiple locals.
With thousands of DB, DC, and group RRSP members, including deferred and retired members, Postmedia was managing, administrating, and sponsoring six DB pension plans with assets surpassing $500 million.
With the changing media and news landscapes, Postmedia needed to focus on its core business, and exit the pension management business. The company aimed to unify its pension plans under a common pension program, intending to reduce risk and manage costs without sacrificing value or security for its employees or retired members.
The Solution
DBplus is a Win-Win for Employer and Employee
In the pursuit of a more efficient pension solution, Postmedia learned CAAT could streamline its plans and was a viable solution to its pension complexity woes. CAAT, a jointly sponsored pension plan (JSPP), offers lower risk and enhanced cost-efficiency compared to managing numerous single employer pension plans. Merging all its pension plans with DBplus would also transfer Postmedia’s pension liability off its balance sheet, and transfer most administrative duties to CAAT.
Merging and joining DBplus empowered Postmedia to remove itself from the pension risk management business with ease. The company was able to provide its personnel with freedom from investment decisions associated with capital accumulation plans like group RRSP and DC plans, access to monthly predictable retirement income they won’t outlive, early retirement options, and conditional inflation protection, all highly valuable benefits to Postmedia employees.