Cost containment, asset management and adequacy of benefits have emerged as the most important issues to plan sponsors, according to the
2007 Canadian Pension Survey: Defined Benefit Plans
by ACS Buck Consultants. That’s a change from the last time the survey was conducted, when employee communications was on top.
“It’s not really all that surprising, when you consider the hostile climate that has reigned over DB plans in the last several years,” said Marc-André Vinson, a senior consultant with the retirement practice in ACS buck’s Ottawa office. “Most chose to keep the DB intact for existing employees and basically ate their young, introducing DC components or separate DC plans for new employees. Others took action to lessen the generous early-retirement provisions in their DB… They want to contain costs but not anger employees with radical measures.”
The high concern about adequacy of benefits (35 per cent), which didn’t register in the last survey, along with the lower ranking of administration issues (nine per cent), may be because plan sponsors are considering the consequences of cost containment.
“Paternalism is not dead. Employers do still look out for their employees’ well-being and that extends to their retirement needs,” said Vinson, adding a better arsenal of tools could help with administration.
When it comes to communicating with employees, the most commonly used strategies are benefits statements (77 per cent) and plan booklets (74 per cent). But close behind are memos or announcements (70 per cent), meetings or presentations (66 per cent), a website (58 per cent), newsletters (42 per cent), total rewards statements (19 per cent) and webcasts (five per cent).
“A lot of effort has gone to addressing employee understanding and appreciation,” said Vinson.
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