Morneau Shepell delivers response to Government of Canada's consultation paper on Target Benefit Plans
Company supports the federal Department of Finance initiative to extend the flexibility of pension options available to Canadians through proposed Target Benefit Plans
TORONTO, June 23, 2014 /CNW/ - Morneau Shepell (TSX: MSI), the largest company in Canada offering human resources consulting and outsourcing services, today announced that it has responded with recommendations and its views on the proposed Target Benefit Plan (TBP) framework outlined in the Department of Finance's consultation paper. The consultation document, which was provided to serve as a focus for the consultations, outlines background information and illustrates the parameters of the proposed TBP framework.
The consultation process followed an announcement on April 24, 2014 by the Government of Canada that launched a national discussion of proposed new TBPs that would share risks between employers and employees. The suggested TBP framework is designed to help ensure that effective, sustainable pension options are available to Canadians who work in the federally regulated private sector or Crown corporations.
"The long-term sustainability of the traditional defined benefit plan is questionable and yet defined contribution plans, the only real alternative until recently, have their own drawbacks," said Fred Vettese, Morneau Shepell's Chief Actuary. "The time has come for a new hybrid vehicle that shares risk between employers and employees in a more sustainable manner, while preserving some of the more attractive features of defined benefit plans. In our opinion, target benefit plans are very promising in this respect."
In its response, Morneau Shepell stressed that all groups should collaborate to ensure a smooth transition. "We strongly believe that there should be a realistic pathway to conversion to a TBP," added Vettese. "The voluntary nature of the proposed framework means that all stakeholders should have a chance to learn more about TBPs and have an opportunity to express their views. It will be vital for government, unions, business, plan sponsors and plan members to focus on cooperation in order to achieve a sustainable system to fund pensions going forward."
"We agree with much of the approach the Department of Finance is suggesting in its consultation paper regarding target benefit plans," said Mel Bartlett, Managing Partner for Morneau Shepell's Atlantic office. "Our response today provides recommendations aimed at shifting the focus to sustainable solutions such as TBPs that provide plan members with adequate, predictable pensions. Our position is based on our extensive experience in working with a wide range of pension plans and their stakeholders, as well as our involvement in helping to develop the shared risk pension plan model in New Brunswick."
Morneau Shepell assisted in the development of New Brunswick's Shared Risk Pension Plan design in 2012. The company is now working with a number of other pension plans in New Brunswick that have adopted the Shared Risk Pension Plan model, plus several others that are considering the change.
About Morneau Shepell Inc.
Morneau Shepell is the largest company in Canada offering human resources consulting and outsourcing services. The Company is the leading provider of Employee and Family Assistance Programs, as well as the largest administrator of retirement and benefits plans and the largest provider of integrated absence management solutions in Canada. Through health and productivity, administrative, and retirement solutions, Morneau Shepell helps clients reduce costs, increase employee productivity, and improve their competitive position. Established in 1966, Morneau Shepell serves more than 21,000 clients, ranging from small businesses to some of the largest corporations and associations in North America. With approximately 3,300 employees in offices across North America, Morneau Shepell provides services to organizations across Canada, in the United States, and around the globe. Morneau Shepell is a publicly-traded company on the Toronto Stock Exchange (TSX: MSI). For more information, visit morneaushepell.com.
SOURCE Morneau Shepell Inc.