Too many Canadians see pensions as a zero-sum negotiation between employees and employers, where one group loses, the other group wins.
While employees have long desired pension features like inflation protection and long-term retirement security, employers have needed retirement plans with cost certainty.
With this dynamic in place, pensions have become a tug-of-war between guaranteed pensions for life and retirement savings arrangements such as group RRSPs. Although still highly valued by employees, defined benefit pensions have become a riskier option for employers.
Some have come to believe that defined benefit pensions are not affordable, not a responsible use of money, and not a priority. To our country’s disservice, this has resulted in a significant reduction in the number of Canadians with a lifetime pension plan and a secure future.
This decline is not just bad for employees and employers—it’s bad for Canada. A lack of guaranteed pensions across the nation contributes to economic instability, increases use of government assistance, and adversely impacts local economies.
At the CAAT Pension Plan, we don’t believe the shift away from guaranteed lifetime pensions has been best for employees, employers, or Canada. So, we asked ourselves…
What if we could design a lifetime pension plan that works for employers and employees, while helping Canada in the near and longer term?
And then we created something new.
A plan that helps bridge the gap between happy employees and fixed cost; reduced risks and better pensions; and, what employees need plus what employers can afford. A valuable defined benefit (DB) lifetime pension with fixed costs that is easy for employers to join and administer. A plan that’s simple, secure, stable, and sustainable. A plan that includes everything Canadians want, plus more.
DBplus is a different kind of defined benefit pension. It removes the trade-offs employers once had to make in order to manage their own plan and gives employees the value of lifetime income in retirement they want and need.
Today, DBplus has made lifetime pensions accessible to more working Canadians across the country. Although it only opened to all Canadian workplaces at the start of last year, more than 15,000 members have already joined, including Postmedia, the United Way of Greater Toronto, and Brink’s Canada. Employers that transitioned away from DB pensions, such as Saint John Airport, have now returned to providing lifetime pensions through participating in DBplus.
Amid a global pandemic, pensions may or may not be a top priority for all businesses but employers should start thinking more about this soon. DBplus provides employers and employees with something in desperately short supply: Stability. And we make joining simple and fast so employers can remain focused on other challenges and opportunities. DBplus employers will benefit with improved attraction and retention, and a less stressed workforce. Our employee endorsement of DBplus is overwhelming, regardless of age, industry, or location
DBplus allows us to restore retirement security to working Canadians, while also providing employers with a retirement savings plan without risks or complex administration. As our country bounces back from COVID-19, we believe lifetime pensions will be a key tool in attracting and retaining top talent for years to come.
Months ago, I spoke to a business leader about CAAT and all the ways we could benefit his business. But his key takeaway was deeply personal. He said:
"I want my kids to have access to something like DBplus, so retirement planning isn't such a source of anxiety for them."
*A similar article was originally featured on caatpension.ca