BC: How will pensions and benefits change with the West experiencing a labour crunch?

AB: I remember a few years ago people were talking about “attracting and retaining” employees but I would spin them around and say it’s now more about “retention and attraction.” Companies in Western Canada, primarily in the resource-base industry are growing and that spills over to financial services and retail sales. And what you find is that junior to midlevel employees are having the most activity and moving from one company or one industry to the next.

BC: Are you seeing any changes to pensions as a result?

AB: Where we’re seeing change is in the so-called softer areas. In other words they are not creating more sophisticated plans, but are making more employees eligible or instead of having a 90-day probationary period, they would get the benefits from day one. And we’re seeing a trend for employees who had two or three weeks vacation to get more of a European twist where people want to get four or five weeks vacation.

BC: Any changes that are not in the softer areas?

AB: Those changes are probably more targeted at the senior executives and managers. There are a number of “phantom” plans being established. That is where companies offer retention incentives that should an executive stay until retirement or a fixed period of time, some additional stock incentives will be provided. They are called phantom plans because the recipient is not receiving any value today. The value is only received in the future.

BC: Have you set any up?

AB: We have seen a number of them at Canadian Western Trust. We don’t come in them with plan design, we come in where there is a need for a custodian or a trustee. But they need a trust company to assist them in keeping their records.

BC: Are you changing your business based on the change in labour?

AB: The one thing we are [changing] has to do with the challenges of the CAP Guidelines. Because employers are concerned with communication, education and potential liability, we’ve been in discussion with mid-size fund companies about offering no-choice group RRSP…These are for companies with 50 and fewer employees who don’t want to spend a lot of money but want to retain employees, we’ll provide no-choice or lifestyle choice.

BC: Are you making changes due to regional issues?

AB: Governments and regulatory agencies seem to be staying out of these issues and are really letting the employers and plan sponsors manage the incredible labour shock to the region.

BC: How do you think they are doing?

AB: It is a challenge. This is a major driver for them and is really top of mind for plan sponsors as to how best to retain employees. [The labour shortage is making things] more and more difficult and we don’t see it slowing down…We plan to have straight forward and plain English plan documents to help reduce costs for plan sponsors.

BC: What can employers do now to offset costs in the future?

AB: I would imagine most companies aren’t even thinking about that right now. They are so focused on the growth they are facing and the labour shortages. We are still seeing a lot of new Canadians plus Canadians moving for employment.

The larger companies that have the infrastructure are managing okay but the vast majority of businesses have to deal with their issues now rather than worrying about the future.

Joel Kranc is managing editor of BENEFITS CANADA. Joel.kranc@bencan-cir.rogers.com


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