Saint Mary’s University encourages its plan members to attend financial planning education sessions, with or without incentives.
In 1953, Saint Mary’s University in Halifax implemented its first pension plan. It was an optional plan, for faculty members only. Over the years, the university had a number of capital accumulation plans, which, in the mid-’80s, eventually evolved into two defined contribution (DC ) plans—one for faculty and one for support staff. “We started to look at the investment patterns [and] discovered that there really weren’t very many differences [between the two groups],” says Larry Corrigan, vice-president, finance, with Saint Mary’s.
In 2007, the two plans merged into one DC plan, which is open to full-time faculty and administrative/professional employees. Membership is now compulsory and the plan has automatic enrollment. The university contributes 8% of salary. Faculty and staff contribute 6% from each pay and also have the option to make voluntary contributions. There are five pre-built portfolios—from low to high risk—from which the university’s 850 plan members can choose.
But Corrigan is aware that a DC plan’s flexibility and choice presents some challenges. “I have actually had plan members tell me they prefer the ‘good old days’ when the university decided where the money would be invested,” he says. But while employees are expected to take initiative for their financial futures, as a plan administrator, the university also needs to do its part. And that’s where Saint Mary’s excels.
It recently offered an education session called My Money, a hands-on computer lab in which members learn how to use online retirement planning tools. Corrigan was surprised at the lack of knowledge that plan members had prior to the session. “Probably half a dozen of the people who came to that particular session actually didn’t have a password. They had never accessed the site,” he says. “People who clearly had never taken advantage of even the basic website to seek knowledge now know how to get in. It was a bonus that they also got to look at the tools and got some training on how to use [them].”
In 2009, employees can look forward to roughly a dozen more education sessions such as the Canada Pension Plan, Pension Member Responsibilities and How to Select a Financial Advisor, Estate Planning, Weekend Retreat for Employees About to Retire, and Harvest Your Savings, which provides details on the options and products available at retirement.
All of the sessions are free, and spouses and partners can attend. “We always have food and refreshments available,” says Corrigan. “We are not above coaxing attendance with food!” While attendance does depend on the session, overall, Corrigan is pleased with the member participation. “[Our] pension committee members help generate interest because they speak with their constituents and rally [members] to come to these events.”
One session in particular received high praise. In early September and October this year, as the market continued to bounce around faster than a pinball, Saint Mary’s plan members received their pension statements. Corrigan says there was a lot of speculation from members about how they should approach this volatility with regard to their investments. “Some of the pension committee members started to get nervous that people were going to lock in their losses,” says Corrigan. So, in a matter of weeks, Saint Mary’s put together a session called Pension Investment Taking Into Account the Recent Market Turmoil. “We held that in a room that holds 175 people, and it was standing room only,” says Corrigan. The interesting part? “There was no lunch involved with that one!”
Brooke Smith is Associate Editor of Benefits Canada.
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© Copyright 2008 Rogers Publishing Ltd. This article first appeared in the December 2008 edition of BENEFITS CANADA magazine.