The Ontario Medical Association is helping its members save for retirement with a new guaranteed lifetime income annuity.
Kayte Fredrickson, vice-president of insurance for the OMA, says the annuity was developed in partnership with Brookfield Annuity Co. and Common Wealth Retirement, the OMA’s retirement plan administrator, to specifically meet the retirement needs of the province’s physicians. The annuity is based on a minimum 10-year term, which can be increased to 15 years with a 60 per cent survivor benefit.
“They really wanted a guaranteed income solution that was as close to a pension product as possible, so we did a lot of research and found this guaranteed lifetime income annuity met their needs. . . . Our partner at Brookfield developed this product specifically for us and what makes it really interesting is [the OMA can leverage] the Common Wealth platform to allow single purchases or through monthly installments at dollar-cost averaging.”
Since most physicians are self-employed, Fredrickson says the biggest retirement challenge for OMA members is a lack of matching contributions. According to a 2018 OMA membership survey, only 20 per cent of respondents felt confident about their retirement finances.
“Many [of our members] have their own corporations, so if they have assets in their corporations, it requires very complex planning. . . . A lot of them have very heavy student debt and they haven’t focused on taking care of themselves. If 80 per cent of our members aren’t ready for foundational retirement, most of them need [a retirement product] that’s predictable and reliable.”
While the coronavirus pandemic delayed the annuity’s launch, member response has been significant, with the OMA conducting more than 5,000 outreach advisory conversations among its membership.
“We’re listening to our members to help them plan and prepare for retirement,” says Allan O’Dette, chief executive officer of the OMA. “It’s really been an unmet need and we’re excited to help our members plan for their future.”