2014 Consultants Report: The personal touch

Top 9 benefits/pension trends to watch

1| MANAGING ABSENCE/DISABILITY “Disability continues to be a very challenging issue and a very cyclical one for organizations.” – Tim Clarke, Aon Hewitt

2| LIVING LONG… “We’ve got an aging workforce, and employers are looking for help. How do I know if someone should be off? How do we make sure they’re getting the right medical attention? How do we get them back to work sooner?” – Sarah Beech, Pal Benefits

3| …AND PROSPERING “There must be a better mousetrap. There must be a better way for us to be able to provide a DC plan that people will pay attention to and make sure that they are saving enough money so that they can retire with dignity.” – Nic Crook, Towers Watson

4| SUPPORTING MENTAL HEALTH “Mental health is still a very big issue. And I’m not convinced employers are really comfortable yet with what to do and how to have a strategy when it comes to mental health.” – Renée Couture, Buck Consultants

5| ATTRACTING AND RETAINING EMPLOYEES “Related to the war for talent is an increasingly mobile workforce. Talent may be recruited across town, across the country or around the globe. Benefits must be able to follow that mobility.” – Rick Holinshead, Mercer

6| MITIGATING PENSION RISKS “The risk management discussions continue in full force. Given the favourable funded positions of most DB pension plans today, sponsors are keen to manage, eliminate or find better ways to share the risk associated with funding their plans. We are seeing an increased interest in LDI, annuity purchase buy-ins and buyouts, and a general shift of risk away from the sponsoring organizations.” – Jill Wagman, Eckler

7| FIXING HEALTHCARE “The Canadian healthcare system is reactive, returning people to health when something goes wrong. We’re moving the conversation now to look at a more proactive model, ‘How do we actually encourage doctors to keep people healthy in the first place?’ I think employers are seeing a parallel set of discussions around, ‘How do we keep our employees well and therefore productive and, ultimately, function as a healthier business?’” – Tim Clarke, Aon Hewitt

8| DEVELOPING DB ALTERNATIVES “There’s a great retirement policy debate…we’ll certainly look closely at the direction regulators will take in terms of introducing new legislation to support different types of plans, whether it be target benefit plans or other types of arrangements.” – Nigel Branker, Morneau Shepell

9| UNDERSTANDING GEN Y “What does the average 22-year- old want out of their benefits plan? I think there are a lot of organizations struggling with how to make benefits relevant to the next generation of employees.” – Tim Clarke, Aon Hewitt

Straight talk
We asked two plan sponsors to tell us what they really think about consultants. Here’s what they had to say.

  • Michelle Chusan (MC) director, retirement programs & communication, HBC
  • Larry Ketchabaw (LK) manager, pension & benefits, Unisource Canada

What value do you feel consultants bring to the table?

LK: Tremendous value. I don’t always place as much value on both sides of that equation, because I don’t tend to use the benefits consultants a lot unless I really have a project. And if I do have a big project, I value them tremendously.

There are so many [benefits] consultants out there, and they’re all beating each other up trying to find business, so that’s a bit frustrating. But we’re able to do a pretty good job on our own because of the relationship we have with our insurance company and the expertise it has, and I think we do better by going direct.

On the DB pension side, you just can’t be without your consultants. There’s absolutely no way.

MC: We’re not just HR generalists who do pensions on the side—we’re actually real pension people here—but we still use consultants. Really, they bring an alternate perspective…to confirm what we’re thinking. So, not always is there something new that comes of our discussions with them, but they definitely do have different perspectives. They have different experiences—they deal with different clients all over the place, different industries—so they’ll bring some of that to the table. We don’t go to them every day for everything.

Are you concerned about the associated costs?

MC: Very much. In the U.S., they look at fees a lot, but it seems like they just use a lot of consultants, and the costs are quite high, as they are here…most of the time, we do a lot of our homework ourselves first. We do a lot to avoid undue costs.

LK: I always have concerns about the costs. Consultants are not cheap; they are expensive. And there’s absolutely nothing you can do. But what you try to do is, you try to get the best one you can. And, by doing that, you’re probably paying the most for it—but you’ll get more value for your money because your funds are being spent in a better way.
How important is it to have a relationship with your consultants?

LK: I think by building that relationship and the value that comes with that, you’re getting the better deal in the long run. People care: they care about relationships; they care about the job that they’re doing. They take ownership, really, and it becomes their plan.

MC: It’s always important to have a good relationship—that’s pretty easy to say—but for some projects, it’s more important than others. And sometimes, you just want a whole new totally fresh perspective. So the answer is, yes, it is important to have a relationship, but the degree depends on the issue or the task at hand. And I’ll be honest with you: sometimes we feel like we’re educating the consultant—it’s a two-way conversation, so a good relationship and under- standing is important.

Alyssa Hodder is editor of Benefits Canada.

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