Canada’s health-care union, the Services Employees International Union Healthcare, is introducing a new low-fee, portable retirement plan for its members and their family members.

The My65+ plan, which will launch on July 1, 2017, is designed for SEIU Healthcare members with no workplace pension and who earn less than $50,000 a year.

It’s registered as a group tax-free savings account because withdrawals in retirement from a TFSA don’t result in a reduction or clawback of guaranteed income supplement benefits, says Emanuel Carvalho, secretary-treasurer of SEIU Healthcare.

“When you go down the road of a typical mutual fund or an RRSP, there’s taxation that happens at the end of that cycle when you retire,” he says. “We wanted to make sure we structured this thing in a way that people retiring — especially people who are making low wages — had the maximum amount of money saved in their bank accounts.”

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The plan is also designed to be portable so members can move it from job to job, an issue that is particularly important in the community health-care sector, notes Carvalho. “As our health-care system transitions into the new world, workers tend to be moving from job to job on a more-often basis. If you look at the community sector, employees could work for three employers at the same time, because most of the time it’s either casual or part-time work.

“For people who are moving from job to job, it’s really hard to save money or have a relationship to some sort of retirement security.”

Since the union’s relationship is directly with its members, the plan will begin with employee contributions only, though Carvalho says the union would absolutely aim to engage employers in the future. “We also see this is a huge asset for employers,” he adds.

“One of the things we’ve recognized — and employers have been very open to us about — is the idea of retention. When people are moving from job to job, they’re moving for a reason, either wages or benefits or pensions. And if we can provide a vehicle that we can sit down with employers and they see a benefit to employer contributions through collective bargaining, we’d absolutely be open to that.”

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The TFSA will be overseen by a non-profit board comprised of a mix of SEIU representatives and external experts, and the investment choice will be limited to a suite of low-cost, target-date funds.

Membership is open to all SEIU Healthcare members and their family members, including spouses, children and parents. “Retirement security is not just a one-worker issues, it’s a family issue,” says Carvalho. “We’re trying to provide a path that, not only our members are retiring on, but their family members are retiring on as well. Retirement security is about the entire family, not just one individual.”

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