At the 2023 Defined Contribution Plan Summit, which was hosted in Montebello, Que. on Feb. 21-23, delegates learned from employer case studies and expert thought leadership about innovative pension plan design, financial wellness programs, decumulation solutions and investment opportunities to support their DC plan members.
Indeed, alongside high inflation and interest rates, members are facing several competing financial priorities, from simple day-to-day expenses to contributing to their workplace retirement plans. To meet this challenge, DC plan sponsors are evolving their savings programs to offer flexibility and innovation, focusing on catering to plan members’ different needs and expanding the scope of these programs.
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With group retirement plans aimed at helping members avoid risks and achieve their savings goals, defined contribution plan sponsors are uniquely positioned to step up and take a more active role in managing risk, said Christine van Staden, regional vice-president of group customer and national accounts business development at Canada Life.
The traditional aim for the defined contribution pension industry has been helping plan members save for retirement, but as the nature of employment, plan design, investment choice and member engagement evolves, that objective is changing to financial wellness.
MFS Investment Management
While a third of Canadians are very or extremely confident they’ll be able to retire at the age they want to, around 40 per cent are somewhat confident and a fifth say they don’t think they’ll be able to retire at all, according to MFS Investment Management’s 2022 global retirement survey.
Canada’s Financial Wellness Lab
While McGill University has factored decumulation into its pension plan for decades, the plan sponsor is continually fine tuning these strategies for members, said John D’Agata, the university’s director of pension and benefits.
CIBC Asset Management Inc.
While there’s a lot of noise and confusion around environmental, social and governance factors, it comes down to delivering value for investors in terms of better risk-adjusted returns, said Aaron White, CIBC Asset Management Inc.’s vice-president of sustainable investments.
Fidelity Canada Institutional
Factors such as population demographics, productivity and geopolitics impact economic growth and, by extension, the retirement outcomes of defined contribution pension plan members over longer-term time horizons, said Jon Knowles, senior investment analyst at Fidelity Canada Institutional.
author and pension expert
Even though it sounds obvious, maximizing retirement income and making it last for life isn’t what drives most retirees when it comes to making decisions — which is contributing to the challenges around decumulation, said Fred Vettese, an author and pension expert.
Purpose Investments Inc.
Purpose Investments Inc.
Mitigating longevity risk is key to solving the decumulation challenge, said Pat Leo, Purpose Investments Inc.’s vice-president of longevity retirement solutions.
With eight billion people consuming the planet’s resources, assets such as clean energy and sustainable agriculture are becoming increasingly important to institutional investors, said John Cook, a senior vice-president portfolio manager and co-lead of the Greenchip team at Mackenzie Investments
With multiple generations in Canada’s diverse labour force, each generation has distinct needs and expectations, with millennials, in particular, creating increasing challenges for plan sponsors.
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