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At BFP we believe there are three core areas that need to be focused on with a pension/group retirement plan

 

Plan Design

Plan design is first of all the structure. Should it be a pension, group RRSP, group Deferred Profit Sharing Plan, group Tax Free Savings Plan or a combination? The answer will depend on the employer’s answer to questions such as: how important is it that the employer’s contribution can’t be accessed while they are employed? How much flexibility do you want the employee to have to cash out their funds? How important is it that the employee will end up with the maximum retirement benefit if the trade off is less flexibility? Plan design also involves figuring out the contribution rate from the employer, the contribution rate from the employee, and when if ever those rates change based on years of service.

 

Capital Accumulation Plan Compliance

A few years ago the Government introduced Capital Accumulation Plan Guidelines – CAP for short. As the name implies they are voluntary guidelines that employer’s who have a plan should be following. In our experience it is an area that is often neglected, but it is our prediction that plans that do ignore these guidelines will set themselves up for possible lawsuits down the road from employees/former employees who didn’t end up with the retirement assets they think they should have. CAP guidelines are really just common sense areas that need to be addressed, covering topics such as having a broad range of investments for members to choose from, and having a way for members to access information on their investment choices, and regular communication of updates to their plan. This doesn’t mean that this has to be a scary thing for an employer however. The suppliers that we work with are generally very helpful in doing a lot of the areas that the guidelines suggest, and we also assist the employer to make sure their plan starts off and stays “Cap compliant”.

 

Employee Financial Education

This is a topic that we are very passionate about at BFP. We find that, in general, employees are either unaware of their investment options in a plan, or if they do know their options they don’t know how to make good informed decision as to which investments are appropriate for them. That is why we commit to provide support in a number of ways: group meetings, lunch and learn sessions, one on one meetings with the employees –usually in conjunction with a group meeting, and investment and financial planning advice over the phone or email. We find the one on one meetings are particularly effective because the employee gets to ask questions to a financial planner that may relate to the group retirement plan, or it may just be general financial planning questions – either way this personalized service is rare in the group retirement world. If your employee has questions we will answer them!

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