In the midst of financial literacy month, what does education look like in a defined benefit world where plan members don’t have to actively make investment choices? And how much do members need to understand about investments?

While financial literacy is important, DB plans allow members to prepare for retirement without being financial experts themselves, says Derek Dobson, chief executive officer of the Colleges of Applied Arts and Technology pension plan. But member education in the DB space is still important, he adds. CAAT, for example, offers member education through in-person, face-to-face sessions, print and online formats. It also offers a call centre where members or employers can ask questions.

Read: CAAT wins pension performance award for membership growth strategy

Over the past few years, the Royal Ontario Museum, Youth Services Bureau of Ottawa and Torstar Corp. have merged their pension plans with the CAAT. 

Dobson says that there’s a very high threshold for plan mergers and a lot of work was done to increase pension literacy and educate members leading up to these mergers. Most members want to trust the provider to make sure they have robust processes in place to keep the pension promise as strong as possible, he says, noting few members want to be steeped in technical details.

“The vast majority of people want retirement made simple and they don’t want to necessarily be in the expertise to do retirement on their own,” says Dobson.

Read: How YBS Ottawa merged its pension plan with a bigger player

Alyssa Hodder, a senior communications consultant at Eckler Ltd., agrees that in the DB world members don’t need all the nitty-gritty details. “I think it’s important for members to have a basic understanding of how the plan works. I think that trying to make the average person into an investment professional is probably going to be pretty challenging, but at the very least they should have a good understanding of how the plan operates and how it aligns with their risk tolerance.”

However, responsible investing is one area where she’s seen plan members show interest. “We’re finding there’s a lot more questions about plan investments than there used to be, simply because members have a personal interest in making sure their plan is investing responsibly,” she says.

Read: Canadian responsible investments surpass $2 trillion AUM: report

Copyright © 2019 Transcontinental Media G.P. Originally published on benefitscanada.com

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