PepsiCo Canada’s enhanced defined contribution pension plan is supporting the retirement goals of a very diverse employee population.

The company, which employs roughly 11,000 people across its food and beverage divisions, has a wide range of roles, from drivers and warehouse workers to sales employees. While the organization offers multiple pension plans, the majority of new employees participate in the DC plan.

In 2020, the company reviewed its DC plan from a financial wellness perspective, said Jaye Calder, the organization’s manager of Canadian benefits and retirement, during a session at Benefits Canada‘s 2023 DC Plan Summit. She noted that, at the time, the plan hadn’t been evaluated since 2014.

Read: 2022 Top 50 DC Plans Report: How are DC pension plans evolving?

“We looked at what other companies were doing within Canada. We looked at the competitive landscape. . . . We have a very complex business — two very separate entities — so that required a lot of review within many different competitors and we looked at what they were doing. We also looked at best practices within Canada — just because our competitors weren’t doing it, doesn’t mean that we shouldn’t be doing it.”

In January 2022, PepsiCo introduced its enhanced DC pension plan. While members receive a core employer contribution, they can make optional contributions to either the DC plan — with a full employer match up to 3.5 per cent — or a group registered retirement savings plan or group tax-free savings account. The additional flexibility allows employees to save for a variety of purposes, said Calder. “I recognize that some of our employees are not thinking about saving for retirement. They’re thinking about that emergency fund [or] they’re thinking about home renovations. They’re thinking about the family vacation.”

PepsiCo initially communicated these changes to employees via mailed brochures, in order to also reach members’ families. “We try not to send out physical mail, [but] in this situation, we felt it was important that spouses and family members had visibility to these changes as well. I actually still have employees now that come to meetings with their colourful brochure and . . . they’re still looking at it. So I do think, in this instance, it was very beneficial.”

Read: How are personalized communications connecting with employees?

In addition to brochures, the company also communicated the enhancements through 99 separate webinars, as well as a short video that demonstrated the plan’s new design. “It’s nice to be able to get in front of people and have the conversation with them. I think it’s a lot more engaging than sending out the plan design on a piece of paper. And videos are sometimes the best way of doing that — especially with our population out on the road.”

While employees’ contributions to the savings plans decreased in 2021, they started to increase again following the launch of the revamped DC pension plan, said Calder. As well, more employees are engaging with the plan, though she’d like to see them take full advantage of the employer match.

“We have that personalized statement that’s available to employees, where they can go in and see [how much they contribute]. . . . So we really want to push that and I would love to see these numbers continue to increase.”

In addition, more enhancements are on the way, she said, noting PepsiCo is exploring the possibility of integrating a tax-free first home savings account into the DC plan. “I really think the design is pretty cool in that it offers ultimate flexibility for the future, to figure out what new accounts [are] beneficial for our employees, what speaks to them [and] how we can get them engaged in retirement and caring about saving.”

Read more coverage of the 2023 DC Plan Summit.