DC Plan Summit: ATB focuses on flexibility in pension redesign

The pension and benefits industry often talks about flexibility and customization of plans, but how many companies are actually changing their offerings to introduce those elements?

ATB Financial is one company that’s taking action on the issue following its pension redesign in recent years.

“The most relevant strategic driver for reviewing and redesigning our pension plan was to help our team members build personal equity,” Debbie Couch, leader of total rewards at ATB Financial, said during Benefits Canada‘s Defined Contribution Plan Summit. “Our challenge is to provide something that can be delivered as a consistent program and allow members to customize according to their needs and personal circumstances.”

Prior to the redesign, ATB had five pension plans for 5,000 members, including a mix of defined contribution and defined benefit plans, as well as a public service pension not controlled by the company. “The result was a high level of complexity with high costs and a plan structure [that was] not equitable,” said Couch. “In most cases, our team members did not value the benefits.”

Read: Australian pension shares details on new option to help members deal with lump sums

After an in-depth review, ATB decided on a flexible pension plan. “It made the most sense, as it is both affordable and allowed our team members to derive maximum value over their life stages,” said Couch.

Core contributions go into the defined contribution plan. But employees then have the option of a flexible component with the ability to direct contributions to mortgage repayment, registered retirement savings plans or education savings. The plan allows them to accumulate up to 18 per cent of their pensionable earnings, with two-thirds of that contributed by the employer. “It is all based on their own current life situation and provides a more holistic view to financial wellness at different stages,” said Couch.

At enrolment time, more than 90 per cent of eligible employees actively joined the new plan, with 88 per cent opting for the full matching contributions.

“We’re completely satisfied with how the new flexible pension plan supports our corporate goal and strategies,” said Couch. “One lesson learned is not to underestimate the role your pension or benefits plans play in attracting talent to your organization.”

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