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

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Financial and Retirement Literacy: What Role Can Plan Sponsors and Employers Play?

Hosted by the Prairie Regional Council June 4th, 2019, Hotel Saskatchewan, Regina

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Welcome Everyone Thanks for joining us!

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Special Thank you to Event Sponsor

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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

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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

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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

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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

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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

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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?

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Introductions:

• Martin McInnis, CFA, FCPA, FCMA - Executive Director of the Co-
• perative Superannuation Society (CSS) Pension Plan
• Peter Shena - Executive Vice-President and Chief Pension

Officer of the Ontario Pension Board (OPB)

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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?

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Do I need to improve my financial /retirement literacy to retire successfully?

Martin McInnis Executive Director CSS Pension Plan

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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

• nus on members?

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Retirement Income Security

Plan Design Financial / Retirement Education Planning Tools and Resources Plan Governance

Literacy - one piece of the puzzle

DC Context Smart Defaults:

• Mandatory enrollment
• Immediate vesting
• Appropriate default investment fund
• Assistance setting contribution rates

Retirement Income Options:

• In-plan options
• Familiarity with products
• MER advantage
• Non-conflicted decision support

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If Only I Had Known When I Was Younger

Peter Shena EVP & Chief Pension Officer Ontario Pension Board

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Traditional Service Delivery Model

Protects

• rganization

not member

Compliance – legislation/plan text Speed of transactions Avoiding legal liability

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What Sets Us Apart

Retirement and Financial literacy education Online planning tools Certified Financial Planners

Advisory Services

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Decision Support

Decision

Pension Benefit Savings Vehicles Tax CPP OAS Credit Estate Planning Personal situation Goals and Lifestyle

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Questions and insights

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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?

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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?

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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

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Special Thank you to Event Sponsor

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For more information, please visit www.acpm.com