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A road map to clarity on the multi-employer pension plan promise

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Randy Bauslaugh:

Multi-employer plans are the way to go. There are no end of independent studies to indicate that DB style benefits, even if provided under a multi-employer platform can deliver the same $1 of lifetime income at about 1/2 the cost of member directed money purchase or RRSP arrangements. The bottom-line is these plans are collective defined contribution plans with a built-in decumulation solution. Another interesting fact — every workplace pension plan in Iceland is a target benefit multi-employer pension plan, and more than 95% of Iceland’s workers have pension plans. Surely we can do that too.

Thursday, August 16 at 2:41 pm | Reply

Chris Reed:

IMO the problem is not so much in the single vs muli-employer issue. It is with this new-fangled TARGET benefit. I have read carefully and never found anywhere a clear pre-defined decision protocol for deciding who bares the pain when bad things happen. Retirees get less benefits? Workers contribute more? Employers contribute more? Do nothing and hope things reverse … only to find out they don’t?

That decision will be hugely political and nasty. Add in the issue of multi-employers and it becomes insurmountable.

Friday, August 24 at 3:20 pm | Reply

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