Canadian HR Reporter

www.hrreporter.com 25 employers, he says, citing as an example, the traditional single-employer, defined benefit plan. " There's a reason why a lot of employers are moving out of that space, both because of complexity and because of liability… Capital accumulation plans have put too much of the burden on the employer to make choices around, for example, 'What investment choices are you going to offer?' and things that the employer is not necessarily well- equipped to decide." Instead, it should be about offering simple, straightforward programs that are portable and can be moved from employer to employer, says Mazer. "One way of doing that is having multi- employer arrangements that an employer can participate in but doesn't have to get heavily involved in administering, overseeing and setting up." The design of the retirement plan makes a big difference, say Mazer and Zanardo, in touting the benefits of a "Canada model" pension that involves pooled pensions instead of the typical individual approach. As an example, the cost of retirement could cost $0.31 million for the former compared to $1.2 million for the latter in assessing the There's a business case to be made for employers taking on a bigger role, says Mazer. "Workplace retirement plans should be thought of as an investment, not just a cost," he says. "Over and above the argument for being an employer of choice, for attraction, for retention, there's a strong argument in terms of a more productive and more innovative workforce — it's hard for your workforce to think of new ideas when they're stressed about their finances." In addition, there will be increasing focus from investors on metrics such as employee engagement and employee well-being as part of their investment decision, says Mazer. "There is a trend toward a greater focus on environmental, social and governance factors in investing. And one of the factors is the human capital factor. So, are you offering a good quality set of benefits? Do your employees feel a sense of financial security? That's another element of the business case." Simplifying the plans One big challenge is the retirement industry has made it too complicated for total contributions required to achieve a 70-per-cent replacement rate for a worker earning $40,000 at the start of their career. Five key drivers The right program is designed with five value drivers: lower fees and costs, saving earlier and more consistently, investment discipline, fiduciary gover- nance and risk pooling. With a multi-employer plan such as HOOPP, employers don't have to worry about investment decisions, says Zanardo. "Really, all they need to do is take deductions from their employees, send them to us every month and at the end of the year, send us their member data. That's it, and their employees are able to participate in a world-class pension plan." Portability is also important, allowing plan members to move their plan from one employer to the next without the risk of higher fees, says Mazer. "If you're a plan that moves from having a high-fee plan to having a low- fee plan, that can make the difference of several hundred thousands of dollars for a typical individual over the course of their lifetime. That's a lot of additional financial security." HOOPP members, for example, can continue to enjoy access to the plan features when they move from one employer to another, says Zanardo, "and continue to have access to their HOOPP pension plan… to the key features that come along with a plan, like survivor benefits, that they wouldn't have otherwise." CHRR "There's a need for more sustainable, adequate and accessible retirement income — regardless of the economic climate." Ivana Zanardo, HOOPP

• Cover
• Untitled
• Untitled (1)