“Most of the employees consider it very unusual for their employers to offer such an extensive pension and benefits plan,” says Elroy Trithardt, general manager of the East Central Development Corporation based in Broadview, Sask. and the administrator for Saskatchewan’s CFDC DC pension plan. “Our plan is quite unique.”
But, while it may be unique in some ways, Saskatchewan’s CFDC employer-sponsored plan is struggling with issues similar to those faced by the biggest employers in Canada. Its principal challenge is how to reduce benefit costs and how to ensure enough flexibility and investment education to meet members’ needs.
“[Some] of our challenges these days [are] higher drug costs and rising premiums,” says Trithardt, adding that although employers have so far been picking up the higher costs, there is now talk about possible caps on benefits and higher deductibles. “It’s all we can do to reduce costs since premiums are beyond our control.”
After short-term employees were blamed for a spike in the plan’s claims to premium ratios, the decision was made across the group to restrict benefits coverage to long-term employees only. However, Trithardt says the change could have a negative impact on recruitment down the road since benefits have always been a big attraction.
Creating a pension plan for 10 different employers that would still offer members control over their investments was another challenge, but the group managed to set up a DC plan where all employees are vested immediately after probation. And, although about 80% are in a default lifecycle- style fund, there is opportunity for members to do their own investing, as well.
With members spread out all over, face-to-face communication isn’t easy, admits Trithardt. The managers meet quarterly to discuss the pension and benefits plans and they try to have someone talk to all employees, especially about their pensions, at least once a year.
“There are definitely challenges to having a group plan for several small employers,” says Trithardt. “But I think everyone realizes that compared to many people, we are very fortunate. Both employers and employees are willing to compromise so they can continue to enjoy benefits.”
Sonya Felix is a freelance writer living in St. Catharine’s, Ont. firstname.lastname@example.org