Lawyers Financial has inked a deal with the Colleges of Applied Arts and Technology pension plan to offer law firms the chance to join the CAAT’s DBplus.
The organization, which is a brand of the Canadian Bar Insurance Association, started looking into pension options for the legal community back in 2016. Over the past few years, a task force delved into which plan design to choose. Ultimately, it opted for the CAAT’s DBplus, which was launched in 2018 and allows employers outside of the college sector to join.
“We started talking to CAAT because all the research we had done and all the decisions we had made on what kind of plan it should be and what kind of contributions we should make and what kind of benefits at the end of retirement should look like, CAAT checked all those boxes,” says Dawn Marchand, president and chief executive officer of Lawyers Financial.
After doing a deep dive into the options, Marchand says being able to offer staff at Canadian law firms a DB plan over a defined contribution plan was seen as key because the former offers a guaranteed benefit for life. Also, DBPlus handles the administrative side and takes on the fiduciary risk, she adds.
Lawyers Financial is set to promote DBPlus this spring, with the DB plan expected to be available for law firms by July. But even before the promotional push, Marchand says the excitement for the DB plan is already palpable. “The appetite is huge; at this point, I’m getting four to five calls a week and it’s increasing all the time.”
The hunger for a plan like DBPlus is so large because many in the Canadian legal community, from administrative staff at a small-town firm to partners at big-city outfits, don’t have any pension at all, she says.
While there is intense interest, the details of how DBPlus would serve the diverse legal community is still being worked out. Partners at law firms and solo practitioners, for example, aren’t usually considered employees, says Marchand, noting that both groups would likely have to have a professional corporation set up and then the corporation would be considered the employer and the partner would be the employee.