The Colleges of Applied Arts and Technology pension plan is looking to launch a new defined benefit pension plan that will be available to workplaces in the broader public, private and not-for-profit sectors across Canada.
The new plan, called DBplus, is subject to board approval on May 30. The new plan will have a likely start date of June 1.
Fixed contribution rates for the new plan range between six and nine per cent of pay. The higher the contribution level, the greater the benefits provided.
The Ontario-based organization will run the new plan as a product within its current plan design. Features of the new plan include survivor benefits and conditional inflation protection.
As for the pension benefit earned, the new plan will provide for an annual pension of 8.5 per cent of total contributions from the employer and the employee. For organizations contributing nine per cent from each of employer and employees, the benefit accrual rate will be about 1.5 per cent. Documentation about the new plan shows a member earning $55,000 in the first year of membership would accrue a pension benefit of $841.50 for that period.
While the new plan will be available across Canada, because pensions are largely subject to provincial regulation, there will be some additional considerations for organizations in other provinces. CAAT hasn’t, however, excluded any national company or organization from joining.
The CAAT plan has been in expansion mode recently, having already concluded pension mergers with organizations such as the Royal Ontario Museum and Youth Services Bureau. The CAAT plan is also in discussions with Torstar Corp., parent company of the Toronto Star, and its union about a possible merger with that company’s defined benefit pension plans.
The move follows the announcement by the OPSEU Pension Trust this month that it’s launching a new defined benefit pension plan, OPTrust Select, that will be available to employers in the broader public sector, charitable and not-for-profit industries. OPTrust Select will target employers that currently don’t have a defined benefit plan but may provide a capital accumulation program. With employers and employees contributing three per cent each, the plan will provide for an annual pension accrual rate of 0.6 per cent of earnings.