What do you get when you look to transfer 9,000 members, with more than $1.3 billion in assets, from one defined contribution pension plan to another? A major change management project that aims to seamlessly transfer retirement savings accounts for thousands of plan members.
In Canada, it’s rare to see pension plans amalgamated. And yet, two Saskatchewan-based pension plans – the Capital Pension Plan and the Public Employees Pension Plan – were faced with exactly that challenge.
A few years ago, the Capital Pension Plan board began exploring ways to help members achieve their retirement goals through greater investment options and enhanced member services. In the end, the board recognized that its most feasible option was literally steps away and so the decision was made – the Capital Pension Plan would join the Public Employees Pension Plan.
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This decision made sense on many levels. First, the Public Employees Pension Plan was and still is Canada’s largest defined contribution pension plan by assets. Plus, at the time of amalgamation, it had more than 54,000 members and held $6.8 billion in assets. As a sister organization to the Capital Pension Plan, it is also sponsored by the government of Saskatchewan.
As well, the move would prove beneficial for Capital Pension Plan’s members due to Public Employees Pension Plan’s substantial size in terms of membership and assets. Public Employees Pension Plan’s key advantages included a much wider range of investment options, greater economies of scale, enhanced retirement planning services and more frequent fund valuations.
Once the decision was made to move forward, formal approval was required by the Capital Pension Plan board, the Public Employees Pension Plan board and Saskatchewan’s provincial cabinet. Then, in early 2014, Public Employees Pension Plan was officially tasked with leading the amalgamation, including the merging the Capital Pension Plan’s assets and member files.
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To achieve the project’s primary goal, the pension plans hired an external project manager to oversee the project to completion. After developing a project plan, a cross-functional team was put into place to tackle all the pieces of the challenge. There were plenty of hurdles along the way; some expected, others not as much.
First of all, it’s never easy when the reality of the situation means an end to an organization’s operations, which was Capital Pension Plan’s fate. So, it was no surprise to see that the two plans weren’t in sync at the start. Eventually, the two organizations managed to find their groove and worked collaboratively to the project’s end.
Another big hurdle was the impact on people. In this case, it was Capital Pension Plan’s 9,000 members who were central to this change. When the announcement came out, it wasn’t a surprise that many were nervous about the transition, especially because it involved the transfer of their retirement savings accounts. Anticipating the concerns, the Public Employees Pension Plan was ready to deal with the uncertainty. This included regular updates to all Capital Pension Plan members during the transition process. As well, the Public Employees Pension Plan held many information sessions explaining the transition process and addressing member questions and concerns. The sessions proved very popular and provided Capital Pension Plan members with greater peace of mind.
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Another hurdle was addressing the transition for the Capital Pension Plan’s 60 employers. Here too, the Public Employees Pension Plan was prepared. Its customer focus coordinators reached out to each employer through face-to-face meetings, as well as hosting presentations on what they could expect from the Public Employees Pension Plan’s processes. In the end, the efforts were welcomed and many employers were relieved to learn the change wasn’t as great as expected.
And finally, when two plans are sponsored by the same government, there’s a good chance that some members will belong to both plans. This proved to be another hurdle. Many duplicate members had conflicting investment choices, while others had differing beneficiaries in each plan.
Despite the project’s complexity, the transition proceeded as planned – culminating in the transfer of $1.3 billion in assets into 9,000 member accounts on June 30, 2015.
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Plenty of lessons were learned along the way. The external project manager proved invaluable when it came to resolving governance and communication issues between the plans, while ensuring all the deliverables were completed on time. Another positive aspect of the project was the team itself. The cross-functional team worked well together to tackle a host of obstacles arising throughout the project. Plus, a high level of trust among the team was evident and essential to a such a project.
Looking back, this was the biggest change management project taken on by both Capital Pension Plan and the Public Employees Pension Plan. Whenever organizations are faced with significant change, there are going to be challenges. This is especially true when the change impacts someone’s retirement fund and leads to the demise of one of the organizations involved.
Yes, there were hurdles to overcome, lines of communication to sort out and processes to be fixed, but in the end, all the pieces came together. Most importantly, the project team achieved what it had set out to do: successfully amalgamate the Capital Pension Plan into the Public Employees Pension Plan.
Sharon Christie is a communications consultant with the Public Employees Benefits Agency.