Pensions are my life’s work, so you would think that writing about pension sites, especially sites for small and medium-sized businesses would be easy. Unfortunately, there is not much out there specifically directed to the smaller employers.
Individual pension plans
Individual pension plans are a vehicle that most small owner-operator companies will look at sooner or later. This article on IPPs is from 1996 just after the Federal Government cut RRSP limits and limits to maximum pensions in defined benefit pension plans. Nonetheless, it is a useful introduction to the concept and gives the reader some solid background knowledge.
IPPs for owners and key execs
This recent article also looks at the merits of the IPP and presents a positive picture of the value of these programs. Similar to the article above, this short read is worthwhile for those likely to be looking at IPPs for the owners or key executives with an organization.
DB, DC or a little of both
Neil Southam, an associate professor at the University of Regina reviews the school’s pension plan to determine whether a defined benefit, defined contribution or some hybrid pension plan would work best. The paper attempts to “demonstrate that it may be possible to convert a defined benefit plan into a hybrid plan in such a way that all members of the plan benefit. Improved pension plans will, arguably, lead to enhanced early retirement rates.” Of course plan sponsors should ask themselves whether encouraging early retirement is a strategy appropriate to today’s ever-aging population and imminent shortage of skilled workers. A longer read full of details, this article is not for those in a hurry.
Group pensions in a small office
magazine is dedicated to issues confronting small business. In his article, Terry Greene a “fee only” financial planner, covers some of the issues small businesses face when creating a company plan, including the benefits of a defined contribution pension plan and group RRSP versus a defined benefit plan. This article provides a valuable comparisons for those considering a “Capital Accumulation Plan” but unsure of the merits of choosing a registered pension plan.
DBs: Just for big business?
Many small employers assume that a defined benefit plan is out of reach for them as a result of the costs. This article lends credence to this impression and although somewhat outdated it is still good reading.
Pension advice from federal government
The Human Resources Development Canada Web site offers a wealth of information about Old Age Security and the Canada Pension Plan, often considered the foundation of pensions in Canada. Also included is a page titled “Private Pensions and Savings,” which is intended to introduce Canadians to the concept of private pensions as an additional source of retirement income.
Joe Nunes is an actuary and president of Actuarial Solutions Inc. in Oakville, Ont. He can be reached at (905) 257-2038 or Joe@ActuarialSolutionsInc.com.