Investment advice isn’t the only option—some plan sponsors opt for broader retirement planning education instead.
Cadillac Fairview doesn’t do investment advice. “We did not want anyone giving our employees investment advice because we believe it’s a personal rather than a company responsibility,” says Debbie Coughlin, director, HR, with Cadillac Fairview.
And, with company responsibility comes the fear that litigation may be lurking around the corner. But this commercial real estate company has opted for an alternative.
Since 2006, Cadillac Fairview has offered group financial planning workshops (four per year) as well as one-on-one retirement planning for those age 50 and over, provided free of charge.
“What we’re helping people with is financial planning and retirement,” says Coughlin. “We want to make sure our employees understand that our role is to assist them with building funds for retirement. We don’t want them to think of our pension plan as their only source of income.”
For the 1,500 members of the company—1,300 of whom are members of the pension plan——Cadillac Fairview currently budgets for 50 people a year to participate in the one-on-one sessions. “When we started, it was almost like a lottery: people put their names in and we had to choose,” says Coughlin. “We’ve had 119 people so far go through.”
Plan members can go to the vendor’s office or have the vendor visit them at home, Coughlin adds. “It’s your typical financial planning. They ask you questions about when you want to retire, what your life’s going to look like when you retire, how much money you need.”
The program has been so popular that some employees have asked if they can attend twice. (Cadillac Fairview has since lowered the participation age to 45.) Coughlin has even had a few members ask if they could attend another session on their own dime.”
The group workshops are a full day—on company time—in a classroom setting, and members can bring their spouses. “Some people are more comfortable in a group setting,” says Coughlin, adding that certain employees may be intimidated by the one-on-one option. “I think they think, ‘Well, my knowledge isn’t quite up there. I don’t want to be embarrassed.’ So it’s safer for them.”
One concern that Cadillac Fairview had, common to many plan sponsors, is that the financial advisors would attempt to sell other services to their employees during the sessions. But Coughlin says it’s clear in the contract that there won’t be solicitation of any kind.
Employees have generally been happy with the one-on-one sessions, but there were a few concerns around privacy. “Some employees signed up for the one-on-one retirement planning and then backed out when they realized that they were going to have to give personal data,” says Coughlin.
“I personally met with these individuals and explained that we have no access to their data. In fact, there is an agreement that members sign indicating that their data is confidential between them and the advisor.” Unfortunately, the members weren’t convinced, but Coughlin isn’t fazed. “This is optional,” she says. “If it doesn’t work for the individual, they can try out the workshops.”
Coughlin, a five-year veteran of the company and a participant in the one-on-one sessions, is clearly proud of Cadillac Fairview’s retirement planning program. “Of all the things we’ve done, this has had the most consistent, positive feedback.”
Brooke Smith is Associate Editor of Benefits Canada.