What Role Can Plan Sponsors and Employers Play? Hosted by the - PowerPoint PPT Presentation

Financial and Retirement Literacy: What Role Can Plan Sponsors and Employers Play? Hosted by the Prairie Regional Council June 4 th , 2019, Hotel Saskatchewan, Regina Prairie Regional Council 1

Welcome Everyone Thanks for joining us! Prairie Regional Council 2

Special Thank you to Event Sponsor Prairie Regional Council 3

Our Goals Today: • Understand the opportunities and benefits of providing financial/retirement literacy education and offerings from the perspectives of two organizations who are doing so • Pose questions, share insights and comments • Inspire potential ideas for you to explore at your organization Prairie Regional Council 4

Format for today: • Current Landscape • Insights from Martin and Peter • Q & A, comments, insights • Wrap up • Note: a copy of the slides will be emailed to you along with the session evaluation following our time together today Prairie Regional Council 5

Current Landscape • The Canadian Institute of Actuaries notes “Canadians are facing challenges” due to: • “Longer life expectancies • Continuing low interest rates • Rising retirement costs • Erosion of private pension”** ** from CIA-ICA improving retirement income for Canadians, 2019 Prairie Regional Council 6

Current Landscape • Eckler notes in their national 2019 “Report for Financial Wellness for Employees Survey” of those that provide financial education**: • 51% indicate their employers offer some form of financial education • 30% provide financial education “on demand”, 20% provide “once a quarter” • 35% provide financial education to “improve employee and company performance”, 30% to “improve morale”, 28% to “increase participation in pension and benefits” and 27% say “it’s the right thing to do morally” • 45% plan to increase the amount of financial education provided Prairie Regional Council 7

Current Landscape • The “Aon DC and Financial Wellbeing Employee Survey 2018”** noted that for the 1,000 Canadian CAP members in the survey: • 71% “cannot afford to save as much as they would like” • 54% “are concerned about not having enough money to retire when they want to” • 64% “are relying on their employer’s plan as their primary source of retirement income” • Insight noted: “A successful financial wellbeing program will provide a range of tools, communication, and “nudges” at the appropriate stages of an employee's working life.” ** from “Making Retirement a Reality – A Call for Action”, Benefits and Pensions Monitor, April 2019 Prairie Regional Council 8

Conclusions • The current economic environment is making it difficult for investors • Canadians are not saving enough • Employees own perception of financial literacy is different than employers • Employers want to help, but employees are not engaged What are employers/plan sponsors doing? Prairie Regional Council 9

Introductions: • Martin McInnis, CFA, FCPA, FCMA - Executive Director of the Co- operative Superannuation Society (CSS) Pension Plan • Peter Shena - Executive Vice-President and Chief Pension Officer of the Ontario Pension Board (OPB) Prairie Regional Council 10

Setting the Stage for Martin and Peter • What is financial/retirement literacy? • What role does your organization play in increasing the financial and retirement literacy amongst plan members, or employees? • What support/education/services do you currently provide? • What process did you go through to decide what to offer? Prairie Regional Council 11

Do I need to improve my financial /retirement literacy to retire successfully? Martin McInnis Executive Director CSS Pension Plan Prairie Regional Council 12

Responsibilities – member vs. fiduciary CAPSA Guidelines (CAP and DC) - member responsibilities: • Join the Plan? • How much to contribute • Investment choice(s) and allocation decisions • When to modify allocations • Selecting an option at termination / retirement • How much to withdraw each year • Understand the impact of withdrawal choices • Seek out an appropriate advisor to assist Question: Whose interest is being best served by putting the above onus on members? Prairie Regional Council 13

Literacy - one piece of the puzzle Plan Design DC Context Smart Defaults: • Mandatory enrollment • Immediate vesting • Appropriate default investment fund Retirement Financial / Plan • Assistance setting contribution rates Income Retirement Governance Security Education Retirement Income Options: • In-plan options • Familiarity with products • MER advantage Planning • Non-conflicted decision support Tools and Resources Prairie Regional Council 14

If Only I Had Known When I Was Younger Peter Shena EVP & Chief Pension Officer Ontario Pension Board Prairie Regional Council 15

Traditional Service Delivery Model Compliance – legislation/plan text Protects Speed of transactions organization not member Avoiding legal liability Prairie Regional Council 16

What Sets Us Apart Retirement and Financial literacy education Advisory Online planning tools Services Certified Financial Planners Prairie Regional Council 17

Decision Support Pension Benefit Goals and Savings Lifestyle Vehicles Decision Tax Personal CPP situation OAS Estate Credit Planning Prairie Regional Council 18

Questions and insights Prairie Regional Council 19

Potential questions/areas to explore • What drove your organization to provide financial/retirement literacy information beyond the minimum regulatory standards? • What about the “don’t give advice” caution we often hear? What are the challenges and/or potential liabilities associated with an employer or plan sponsor providing financial advice, or in being perceived as doing so? • Why would an employer or pension plan sponsor offer financial/retirement literacy education or services? • What values or guiding principles influenced your organization? • How will such an offering enhance attraction, engagement and retention efforts? • Are generational perspective considerations needed in the design of the approach? • How do you get younger plan members or employees interested? Prairie Regional Council 20

Potential questions/areas to explore • How do you evaluate the effectiveness or value of your offering? • What would you say are the key elements of an effective offering? • Where do we start? • What are your plans for the future in terms of what you offer? • Your thoughts on financial wellness being part of a wellness strategy? Link to the EFAP? • From a broad philosophical perspective, what responsibility should pension plan sponsors and/or employers have in providing financial/retirement literacy support/services? • Thoughts on a holistic approach to financial/retirement literacy (employer sponsored plans, personal savings, government provided plans)? • How could such literacy offerings perhaps influence or impact pension plan design? Prairie Regional Council 21

Wrap up • A copy of the slides will be emailed to you along with the session evaluation following our time together today • Key learning…….. • Thanks to Martin and Peter! • Thanks to you for joining us – we trust what you have learned and shared today will be of value to you moving forward as you consider this important topic Prairie Regional Council 22

Special Thank you to Event Sponsor Prairie Regional Council 23

For more information, please visit www.acpm.com Prairie Regional Council 24