As Canadians grapple with inflation, rising interest rates and an often reluctant return to the office, employers are looking for new and better ways to both attract and retain employees. This was a key part of the conversation at the second annual DC Plan Experience Forum which was held at the Shangri-La Hotel in downtown Toronto from February 15-16. We learned that while the role of retirement benefits can be one of the most important tools employers can offer, ongoing challenges remain in the defined contribution space.
Industry veteran and honorary CLC team member, Kevin Press, summed up three key takeaways he saw emerging from the discussion:
- DC plan member communication and education remain the greatest challenges facing plan sponsors and retirement industry providers.
- Target date funds have delivered real value, in particular as default investment options.
- DC plan members would benefit greatly from independent, professional financial advice – the industry feels closer to moving on this than ever.
On the plan sponsor side, we polled our audience to get their take on a few burning questions that surfaced during the day. Here’s what they told us:
- When asked whether employees would value decumulation options in their DC pension plans in this age of quiet quitting and the great resignation, the room was divided – 53% said they would while 47% said no.
- We also asked them whether or not they’re in the process of integrating ESG, especially given all the attention it’s attracted in recent years. About a third – 30% – said no while the rest (70%) are already headed down the ESG path.
- Private markets was another topic – what should its role be in DC plans and how are some already using it? We asked whether delegates feel private markets are too risky for DC plans and most (76%) said no.
- Finally, a topic that recurred throughout the day was target date funds, a staple of many DC pension plans in Canada. We asked our audience whether they are using target date funds as a default and a whopping 82% said yes.
See the charts below for the full results:
Additional Poll Results
If you’re interested in attending next year’s DC Plan Experience, contact Joanne Boccia to get your name on the list!