Providing a defined contribution pension to employees since 1969, Western University is in a unique position to share how the landscape for these plans has evolved over time and how its plan measures success.
Louise Koza, the university’s director of total compensation, will discuss past and current issues facing defined contribution plans at a session during the 2018 Benefits and Pension Summit at the Ritz-Carlton Hotel in Toronto on April 17.
“We have insight to share in terms of how the legislation, the investment environment, the planning tools have evolved over time,” she says. “There is optimism there in that we’ve made great strides, but then there is an opportunity to reflect on where else could we be doing a better job and supporting employees in these programs.”
One key element Koza plans to highlight during the session is how defined contribution plans measure success. “We’ve focused on a small number of metrics to identify the success programs, so those would be contribution levels, proportion of investment portfolio exposed to equity or growth investments, management expense ratios and finally the replacement ratio upon retirement,” she says.
That latter issue is of particular interest, adds Koza, noting she believes the defined contribution sector is currently targeting the wrong replacement ratio. “The underlying assumption that somehow the retired person needs to work towards 100 per cent or even 70 per cent of what they were earning just before they retired is not really the right measurement,” she says.
“Instead, what I’m advocating for is some kind of lifestyle index that you’re working towards, to envision what you want your lifestyle to look like, consider the cost of living of living that way and then work towards that.”
Koza will be joined during the session by Peggy McCallum, a partner in the pension and benefits group at Toronto-based law firm Fasken Martineau LLP and Joe Nunes, president of Actuarial Solutions Inc.
Find out more about the current landscape for defined contribution plans at the 2018 Benefits and Pension Summit.
Register for the event here.