Educate the pension fund managers of the future - your employees

By Jury Kopach
|CHRR, Guide to Pensions & Benefits|Last Updated: 04/12/2001

We’ve seen the shift from defined benefit (DB) pension plans to defined contribution (DC) plans. But organizations need to understand that the switch results in a shift in responsibility for providing retirement income. In essence, the employee takes over the burden of fund management.

Employers need to reconsider the part they play in their employees’ future income stream, or face possible legal consequences. Organizations in the United States are suffering from burdensome litigation as the number of employers being cited with negligence increases. The question is, “How long before this kind of litigation seeps into Canada?”

Today’s working Canadians have been told their retirement will be composed of three sources — a company pension, government pension (Canada/ Quebec Pension Plan) and personal assets. A stern warning that governments of the industrialized world will renege on their pension promises was issued by Moody’s, an international bond rating service, last March. It stated that almost all countries will have to substantially re-engineer their pension schemes.