Retirement firm Common Wealth is part of a new effort aimed at creating a national, portable retirement plan for Canada’s non-profit sector.
The goal of the Common Good Retirement Initiative is to address the 50 per cent of workers in the non-profit sector who lack access to a workplace retirement plan. The sector also has a large proportion of workers (47 per cent) in part-time or contract arrangements, while many non-profit employers face barriers in offering a formal retirement program. They include costs, administrative burdens and potential liability.
So far, the effort includes a steering committee, a so-called champions council and foundation partners involving leaders in the non-profit sector across Canada. On the steering committee is Alan Broadbent, chair and founder of Maytree; Owen Charters, chief executive officer of Boys and Girls Clubs of Canada; Rahima Mamdani, vice-president of human capital for the United Way Greater Toronto; and Elizabeth Mulholland, chief executive officer of Prosper Canada. Also involved is Keith Ambachtsheer, director emeritus of the International Centre for Pension Management at the University of Toronto, who’s serving as the new plan’s expert technical advisor.
As it stands, the plan is to raise awareness about the effort and consult with the non-profit sector. A national survey is also underway in order to better understand the non-profit sector’s needs. The goal is to make a decision this fall on whether to implement a new plan. If there’s enough back from employers and associations to offer it, the plan could be available as early as 2019.
Key features of the proposed plan include accessibility (through, for example, availability to freelance workers), portability (allowing people to continue participating even if they change jobs), affordability (through low fees), flexibility (through optional employer contributions) and inclusion (by, for example, making spouses and common law partners eligible to participate).
“Employees in the not-for-profit sector spend their careers working on behalf of others,” said Mamdani in a news release.
“With the Common Good Retirement Initiative, we have an opportunity to support them by filling an important need for a high-quality, portable retirement plan. This innovative solution supports savings for sector employees at all income levels — whether they currently have a retirement plan at work or not — and the plan has a legal duty to act in the best interests of its members. I believe this is an excellent model with the potential to make a real difference in the financial security of so many dedicated workers.”
The new effort follows a move by Toronto-based Common Wealth to create a retirement savings plan for low-income workers in the health-care sector in partnership with the Service Employees International Union. Called My65+, the plan essentially functions as a group tax-free savings account aimed largely at workers with no workplace pension.