By slotting alternative assets into portfolio offerings, Saskatchewan’s Public Employees Pension Plan is incorporating an element of the defined benefit pension plan model, according to Gary Hutch, chief investment officer and executive vice-president of investments at Plannera Pensions & Benefits, which administers the plan.
“We believe that including all of these alternatives provides more of a floor in terms of low downside risk, but still [provides a] really attractive diversification, really attractive returns overall,” he said during a session at Benefits Canada’s 2025 Defined Contribution Plan Summit.
The pension fund includes private equity and private credit assets in its equity and fixed income portfolios, respectively, with the rest of the alternatives separated in a bucket, he said, noting the alternatives bucket also includes infrastructure, farmland, real estate and liquids.
Read: 2022 DCIF: How Saskatchewan’s PEPP is adding alternative investments to its DC plan portfolios
The plan’s philosophy is to keep investment options simple for plan members alongside a very sophisticated engine powering the suite of options, said Hutch. Plan members can choose between five different balance funds with a range of risk and reward opportunities. They can also pick a speciality fund, which is either money market or bond fund-based.
“[Plan members] can tailor [their] account to have a different risk profile if [they] want to pair a balanced fund with money market and/or bonds.”
It’s crucial for the organization to keep illiquid alternatives protected from member sentiment, he added, which it does by ensuring no member can pick a 100 per cent allocation to any one private market. “It can’t be 100 per cent private equity or private credit and the only way they can be zero per cent private equity or credit is going entirely money market.”
Read: Quebec’s VPLA rollout would benefit from more flexible approach: CIA
During the session, Hutch also described the launch of the PEPP’s variable payment life annuity, which now has about 27 members and $7 million in assets. The decumulation strategy carries a four per cent hurdle rate, which might not match inflation, he noted, but its inflationary indexing component will provide plan members, on average, with a tailwind with increased payments.
“It is a permanent purchase. It’s locked in. This is not a reversible choice.”
The solution addresses longevity risk but it doesn’t eliminate it since there will always be a cash flow, noted Hutch. The VPLA can be paired with other options, providing plan members with flexibility depending on their preferences. Plan members must be between ages 50 and 95 to select this new option. And to open an account, they must have a minimum $14,000 saved with a cap at $1 million.
“It’s another wedge of the pie that I think can help be a solution for members in retirement and take away some of those potential sleepless nights about some of the challenges they have.”
Read more coverage from the 2026 DC Plan Summit.