How PCL Construction balances its DC pension and employee share plan

At PCL Construction, employee ownership is built into the company culture and is a big part of total compensation.

However, it’s created some apathy when it comes to the way employees approach their DC plans and prepare for retirement, according to Mike Olsson, the company’s vice-president of human resources and professional development.

At the company’s annual share offering each March, employees are offered shares they must fund themselves and are paid back each year through dividends. “So if you own $100,000 worth of shares and we hit a 20 per cent return or more, which is what we aim for every year, suddenly you’re getting money back,” said Olsson, during a session at Benefits Canada‘s 2020 DC Plan Summit in Montreal in February. However, as employees build up equity in their shares, their pension plan is often forgotten.

Read: Q&A with PCL Construction’s Mike Olsson

About 98 per cent of PCL Construction’s 2,700 salaried employees are participating in the DC plan. The majority of this group is contributing five per cent, with the employer matching that percentage. The organization has also shifted to a mandatory plan and defaults its members into a target-date fund based on retirement at age 65. In addition, it has a number of pension committees, which are made up of employees from across Canada.

 “The whole approach on everything is how paternalistic it is. We feel that responsibility big time,” says Olsson. “Does that approach create apathy, lack of interest or concern? A hundred per cent it does. . . . And when we approach this, are we OK with this apathy? The answer is no. We absolutely cannot be OK with that apathy, for a number of reasons, including some of our people, you can’t guarantee the future, we don’t know what they’re doing with their own investments and those sorts of things. And then also, the idea that there’s a big opportunity here with that money.”

While PCL Construction’s share plan is a big focus, the company also communicates the DC plan across an employee’s career. There’s early education in two meetings when a new employee joins, followed by online education sessions, a Friday e-newsletter that touches on the plan, face-to-face sessions, information on the intranet and a wellness fair.

Read: Editorial: The medium is the message

“It is unreal the list of things we do, but we feel we have to do it because we just don’t want to be guilty of someone not being prepared,” said Olsson.

PCL Construction has also rolled out its company purpose over the last year, he noted, which is to build a better future through people, communities and legacies. The latter ties into the company as a whole, but also its savings opportunities for employees.

“We’re here for the long term so we want to build legacies. We also think about it as . . . making sure employee ownership is there for the next generation and the generation after that and the generation after that.”

Read more stories from the 2020 DC Plan Summit.