The southern Alberta division of the Canadian Corps of Commissionaires has changed its defined contribution pension provider and structure in a bid to offer its 1,600 employees a plan that is simple to understand and requires little administrative support.
Since the not-for-profit security services company launched Mercer’s Planisphere in September 2015, it has seen its employee participation rise, from 22.6 per cent of its workforce in the previous plan to 31.3 per cent of employees in the new one.
The previous defined contribution pension had been in place since 1992, but the organization didn’t feel it was receiving the appropriate information it needed to make reasonable decisions about the plan and its members, says Tim Campagna, senior manager in the Canadian Corps of Commissionaires’ People Services Department.
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“We received little information from the broker nor did we receive any information saying, this is available to you should you need it. So, that was the crux as to why we were moving ahead,” he adds.
“In the new plan, we have lots of support, a lot of reports available to us that allow us to see the growth of the plan itself … it allows us to identify who, for example, is taking part, all the things we HR guys like to see. Even the email material that we receive is helpful, as it identifies financial information that could help an employee make informed decisions.”
In switching its pension plan to Planisphere, the Canadian Corps of Commissionaires also changed the eligibility periods associated with the plan. “We’re a not-for-profit company, but we’re trying to keep up with the pace of business,” says Campagna. “We felt it relevant to change our eligibility requirements to give our new employees a chance to take part.”
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In the previous pension, employees had to wait one year to join the plan. The eligibility period has now been reduced to 90 days, so employees can join the plan as soon as their probation period comes to an end.
It also changed the eligibility periods associated with employer contributions to the plan. Previously, employees had to wait three years to receive an employer contribution. That has now been reduced to one year.
Contribution levels still depend on how much an employee works. “We work on the basis of five cents per billable hour, and then there is an amount that the board of governors also contributes,” says Campagna. “We put all of that into a pot and then we do our calculations to come up with that final employer contribution amount.
“Our only caveat is for employees to work 110 hours a year to be eligible to receive an employer contribution amount. It doesn’t matter if they’re part time or full time or casual … they must work a minimum of 110 hours.”
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The Canadian Corps of Commissionaires has also added a tax-free savings account to the plan. For salaried employees, the organization contributes a one-per-cent match to the TFSA.
It communicated all of the changes to employees through an initial email blast, which was followed up with an official letter and information on its employee website. The organization also hosted presentations in four of its five regions in southern Alberta.
“We spread it across two or three days, depending on the region, to give everybody a chance to come and listen to the presentation,” says Campagna. “We’re a not-for-profit company, but we do our best to provide benefits that allow our employees to plan for the future.”
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Planisphere was launched by Mercer as a retirement savings option that shifts most of the governance burden associated with establishing and administering a defined contribution pension plan, “thereby saving the plan sponsor time and potentially costs,” says Oma Sharma, Canada defined contribution consulting leader at Mercer.
“There are no set contribution levels under Mercer Planisphere – the plan sponsors decides on the key design elements like contribution rates, eligibility requirements and so on.”