The Colleges of Applied Arts and Technology pension plan’s plan to share its expertise with as many Canadian workers as possible nabbed it the award for pension performance at Benefits Canada’s 2018 Workplace Benefits Awards in Toronto on Oct. 11.
With a backdrop of strong fund performance in its main plan, as evidenced by its 118 per cent going-concern funding as of Jan. 1, 2018, the CAAT is seeking to grow the number of employers and employees it serves. In May 2018, it launched the DBPlus pension, a secondary plan design that employers and other plan sponsors can join as a simple method of offering a defined benefit pension to employees.
“We’re not growing because we have to grow, we’re a very strong sustainable pension plan,” says Derek Dobson, chief executive officer of the CAAT. “But we’ve been listening to the industry and to employers and governments, and there seems to be a gap and we’re in a position to help fill that gap. So growth will help us make our plan stronger but also increase coverage, reduce risk, help employers and help members.”
The DBPlus design provides its members with lifetime retirement income and survivor benefits, with inflation protection. The fixed contribution rates range from five to nine per cent of employee contributions, matched by the employer. It allows plan sponsors with fewer resources to allocate towards retirement readiness the chance to benefit from the CAAT’s long-standing experience in institutional investment, as well as the more complex return-seeking methods it can employ.
The first employer, Torstar Corp., to join the DBPlus plan recently finalized its transition, moving its eight DB pensions to the new model and growing the CAAT’s overall membership by 3,000. Indeed, some employers have also recently joined the original CAAT plan, including the Youth Services Bureau of Ottawa in 2017 and the Royal Ontario Museum in 2016.
Underpinning its strong membership growth is the plan’s investment expertise. Its small team recommends an asset mix to its board of trustees that’s based on asset-liability modelling studies it conducts every few years, according to the award entry. External investment managers then assist in implementing the strategy, which results in the production of a diversified portfolio with three key category strengths: return-enhancing, inflation sensitive and interest-rate sensitive.
Read the full list of 2018 Workplace Benefits Awards winners here. And stay tuned in the coming days to learn more about each of the winners.