In this year’s report on Quebec, we asked Quebec-based industry experts to summarize the recent legislative and regulatory developments, as well as possible trends on the horizon. We also talked to Quebec plan sponsors about what they are doing to attract and retain talent. Here’s an update on what’s new in La Belle Province.

While some companies are closing their defined benefit (DB) plans to new employees or shifting away from them completely, Bombardier is initiating a unique approach to retirement savings. An approach it hopes will help attract new talent and keep the great minds it has.

The Montreal-based manufacturer of planes and trains currently provides its unionized employees with DB plans, while its non-unionized members have access to a hybrid plan—a DB plan with a defined contribution (DC) component. For the corporate and transportation divisions, the DB portion of the plan is fully paid for by Bombardier, and the company matches employee contributions to the DC portion of the plan at 50%. For the aerospace division, employees contribute a small percentage to the DB plan, and Bombardier matches 50% to 100% for the DC component, depending on location. But later this year, the pension options will be changing course. Bombardier plans to roll out a DC-only component to its pension offerings, allowing nonunionized workers, current and new, to choose between either the hybrid plan or the DC-only plan.

“This is a bit original,” says Étienne Brodeur, senior director, compensation, pension and benefits. “In Canada, many companies are going to DC and that is the only thing they offer to new employees. We have decided to offer both. We hope we can attract young engineers who may not necessarily plan to spend their whole careers with us and, at the same time, attract older employees who still see the value of a DB component.” He hopes that offering both the hybrid plan and the DC-only component will give employees options and encourage them to save more for retirement.

Local Differences

Being a global company—employing nearly 20,000 Canadians and close to 60,000 people worldwide—a one-sizefits- all approach to pensions and benefits wouldn’t work.

The Bombardier pension plans are business-unit driven, meaning that the plan structure is fundamentally the same in Canada, but the plans are managed at the local level. Bombardier has taken this approach because of the differences in legislation between provinces, with the added benefit of plan administrators being closer to the members and better understanding their needs.

Many of the Bombardier plans existed prior to acquisitions that took place in the ’70s, ’80s and ’90s. While the earlier plans have been amended slightly, they’ve mainly stayed as they were prior to the acquisitions. “These are local plans with their own [conditions],” says Brodeur. “We make sure they are competitive, but we have not said it is mandatory that all our non-unionized employees have the same formula.”

A similar concept has been applied to the employee benefits package, as well. “We’ve been rather traditional [with our benefits]. But recently, we have made some changes to them to make them more modern and flexible,” adds Brodeur.

Bombardier Aerospace has rolled out what it calls a modular approach to benefits, which allows employees to choose from different levels of prepackaged coverage. The lower-level coverage is completely paid by Bombardier, while the more extensive coverage comes with some cost to the plan member. Brodeur says this approach has been well received.

He also says the company is looking to make changes to the delivery of its benefits plan in the future, moving toward a more proactive approach that supports healthy lifestyle choices. “Not only would we be reimbursing pills, but we would help employees maintain their health.”

Skilful Retention

Within the manufacturing industry, finding and retaining people with specialized skills is becoming more difficult—and more of a concern as a large percentage of the workforce closes in on retirement.

Bombardier, too, is feeling the pressure. “We have some concerns about finding people with the specialized skills. Building a new model of plane, for instance, requires a number of engineers who are specialized in that area. It is quite complicated to get a new plane to fly,” explains Brodeur.

Bombardier is now in the planning stages of how to address the expected workforce shortfall. Ideally, the company wants to find a way to keep people once they’re eligible to retire, rather than having employees leave the company, collect their pensions and then go to work someplace else. “There is no magic recipe in this area, but we are taking steps to address this need for specific target groups. We need to find out how we can position it so that it will be a win-win situation for us and them,” he adds.

These changes are simply the first steps toward making Bombardier even more attractive to prospective job seekers in the future.

April Scott-Clarke is the assistant editor of Benefits Canada.

For a PDF version of this article and the rest of the 2008 Quebec Report, click here.

© Copyright 2008 Rogers Publishing Ltd. This article first appeared in the May 2008 edition of BENEFITS CANADA magazine.

 

Copyright © 2020 Transcontinental Media G.P. This article first appeared in Benefits Canada.

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