Multi-employer defined contribution plans can lower fees and reduce demands on businesses of all sizes.
Is your business looking for a reason to join a Multi-Employer Pension Plan (MEPP)?
In Canada, there are more than 450 plans covering more than one million workers.
Historically, Multi-Employer Pension Plans were largely confined to Canada’s unionized workforce—established under a collectively bargained agreement.
However, with pension regulators relaxing rules in recent years, and allowing two or more unaffiliated employers to participate in the same plan, it has opened the door to all Canadian employers and workers to participate in a MEPP.
MEPPs offer multiple advantages to employers—with significant efficiencies that lower costs, a lighter administration and compliance burden and reduced fiduciary responsibility and risk. MEPPs can also drive better outcomes for plan members through lower fees and the potential for continuity of membership.
Link Investment Management is a disruptive innovator in workplace equity, health and savings plan management and Link’s LINK Multi Employer Pension Plan, is a prime example of a MEPP that benefits both employers and employees alike.
“This plan was the first of its kind in Alberta and is open to any Canadian employer,” says Brian McClennon, President and Chief Executive Officer of Link Investment Management.
“The cost, risks and internal resources required to effectively sponsor and administer a registered pension plan can be prohibitive for employers,” he adds. “Our ALPP removes much of that burden.”
With Link as plan sponsor and administrator, the ALPP offers a multitude of benefits to participating employer, including:
- Management: With Link responsible for plan design and the day to day administration including plan investment strategy, implementation, monitoring, disclosure, communication and service provider selection and oversight, the strain on the sponsoring company’s internal resources is greatly reduced.
- Cost: Lower service provider and investment management fees through the sharing of administration and pooling assets and reduced workload makes a MEPP more financially viable for many companies compared to other plan types.
- Compliance: Link is responsible for compliance with the Income Tax Act, pension legislation and plan provisions thereby eliminating this burden for participating employers.
- Governance: One centralized pension committee along with established processes and procedures ensures that the fiduciary and other responsibilities of the plan administrator are met.
- Reduced fiduciary responsibility and risk: With Link having fiduciary responsibility for the administration of the plan, participating employers’ fiduciary risk is mitigated.
- Flexibility: Customizable plan features such as contribution levels and structures, eligibility and earnings definition allows the plan to be tailored to meet employer objectives.
- Better outcomes for plan members: The lower fee structure of a MEPP ultimately yields more retirement income for its members.
“We believe that the ALPP will enable Canadian companies to offer a pension plan to reward, attract and retain top talent while assisting their employees to obtain their retirement objectives.” says Mr. McClennon.
“Let’s face it—one million active MEPP members can’t be wrong.”
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Read more: Challenging the status quo: Comparing MEPPs and group RRSPs.
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