Outsourcing pensions to attract talent

‘I don’t want to be a pension administrator, and I don’t want our staff doing it’

Outsourcing pensions to attract talent
Attracting the right people means offering the right compensation mix. Credit: Stmool/Shutterstock

Chalupiak & Associates has served First Nations, non-profit organizations and small businesses in Saskatchewan for more than 20 years as a chartered professional accountancy firm based in Regina.

Many First Nations organizations and relationships are complex and include governments, funding agencies, private sector partners and a mix of non-profit and profit-seeking entities including trusts, corporations, and limited partnerships.

This creates multiple accountabilities and complex reporting obligations that, in turn, require professional staff possessing the expertise to help First Nations discharge their reporting duties.

With a staff of 12, Chalupiak & Associates’ business and client demands are growing. For a professional services firm, growth means attracting, training and retaining qualified staff. Two key business challenges for the firm are attracting the right employees and preventing “brain drain” to other employers — particularly to the public sector given the firm’s specialized work with First Nations.

“We see losing talent to the public sector as a high risk,” says senior partner Kerry Avery.

Attracting the right people means offering the right compensation mix. To do this, the partners realized they needed to offer a pension plan, so they spent a couple of years researching the options — including group registered retirement savings plans (group RRSPs), defined contribution (DC) pension plans and pooled registered pension plans.

But none offered what the company really wanted: A pension plan with institutional-grade pricing and services, customized and tax-effective, with enough saving room to provide good retirement income, strong creditor protection and — especially — minimal administrative workload.

Chalupiak could have started its own plan. But that would have meant choosing and overseeing investment managers, a recordkeeper and an asset custodian, as well as taking on the regulatory and fiduciary duties of a standalone plan.

In effect, the firm would have had to operate what amounts to a small financial institution alongside its core business.

“That’s not what we wanted to do” says Avery.

“We’re lean, low-overhead and client-centred. I don’t want to be a pension administrator and we don’t want our staff doing it. Every minute that’s not spent servicing our clients is lost time and impedes our business success.”

They chose Blue Pier, a fully outsourced, customizable and scalable pension solution in Toronto.

“We realized that we can provide good pensions to our staff without wasting 10 per cent of our firm’s resources on administrative and compliance work. We’ve long understood that a solution like this is needed,” says Avery.

They also found the onboarding process easy, he says.

“With a few simple questions, the sign-up agreement form identified the design options possible under regulatory guidelines — start date, pensionable earnings, contributions, eligibility, vesting, early/normal retirement, administration expenses, eligible earnings, asset transfers, etcetera. We explained what we wanted, Blue Pier completed the form for us and we approved it.”

Chalupiak can look forward to first-tier outcomes with Blue Pier, not least because of its service partnerships with the likes of Buck Global, Phillips, Hager & North Investment Management and Canadian Western Trust.

“We like the fact that our employees’ money will be managed by a large and well-respected institutional asset manager with a history of strong performance, and that our plan will be administered on a secure online platform that services some of Canada’s largest financial institutions and pension funds,” says Avery.

Big impact for small employers

Canada has a lot of employers like Chalupiak — small in size, big in ambition and competing fiercely for talent. And demand for skilled workers is increasing, with 41 per cent of Canadian employers having difficulty hiring skilled workers, according to the ManpowerGroup’s 2018 Talent Shortage Survey.

The talent marketplace increasingly favours sellers (workers), not buyers (employers). And the top 10 in-demand job categories all require some post-secondary training while being harder to fill.

They include skilled trades, engineers, sales representatives, drivers, technicians, IT support personnel, accounting and finance professionals, educated professionals (managers, lawyers, researchers) and skilled manufacturing and production staff.

In 2018, more than 30 per cent of Canada’s 16.3 million workers were in workplaces with fewer than 50 employees, according to Statistics Canada. None of these enterprises are large enough to offer an efficient, stand-alone workplace retirement plan like larger employers often do, particularly in the public sector.

So, how can smaller employers compete for talent? Offering higher wages is one option, but it’s often not enough because workers want pensions — almost 80 per cent of Canadian workers without a workplace retirement plan would change jobs to have one, according to a 2016 ADP survey.

And while people may think millennials don’t really contemplate the future, results from a 2016 survey by Franklin Templeton suggest retirement is a key concern for 70 per cent of them. 

A further 78 per cent said the availability of a pension plan is a major factor in deciding to accept a job, according to a 2018 Accenture survey of 3,000 workers, while 72 per cent said they stayed with an employer to keep pension coverage.

And almost 70 per cent of workers said they would give up some pay to have better retirement benefits, according to a 2017 Willis Towers Watson survey.

A good workplace pension plan helps employers to attract and retain the best staff. Pension plan sponsorship that is realistic and affordable for any employer, anywhere in Canada, levels the playing field, helping smaller enterprises compete and succeed.


James Pierlot is Blue Pier’s founder and CEO in Toronto. For more information, visit www.bluepier.org.

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