AFTERNOON BREAKOUT: Communicating the Value of Good Pensions BC PENSION FORUM February 26, 2016
Moderator Linda Watson Vice Chair, BC Teachers Pension Plan Speakers Corina de Guire Director, Plan and Member Communications, BC Pension Corporation Ron Auer Executive Director, CORPaTH Riley St. Jacques Senior Consulting Actuary, PBI Actuarial Consultants #BCPensionSummit
Introductions Riley St. Jacques, FCIA, FSA Senior Pension Consultant PBI Actuarial Consultants Ltd. Specialize in TBP and MEPP #BCPensionSummit
What is a good pension? Bad Better Than Nothing Good Better Best Nothing RRSP/DC SRP TBP/ MEPP DB #BCPensionSummit
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AFTERNOON BREAKOUT: Communicating the Value of Good Pensions BC PENSION FORUM February 26, 2016
Communicating Value of Good Pensions Ron Auer * Executive Director, CORPaTH * Director, Analytic Investors, LLC #BCPensionSummit
CORPaTH is an alliance of defined benefit pension stakeholders who believe working men and women earn and deserve a secure retirement. Education to ensure the long-term viability of defined benefit pensions and safeguard the enormous economic contributions pensions make to regional, national, and global infrastructures and economies. Advocates responsible investment strategies, social responsibility, transparent and stable financial markets, investor advocacy, solid corporate governance, and consistency of meaningful investment returns. Growing community of decision makers who oversee pension assets and are committed to protect, promote, and perpetuate defined benefit pensions globally. #BCPensionSummit
The Value of Good Pension Plans Defined Benefit Plans are superior vehicles to deliver sustainable investment returns and to provide retirement income security. Pension Envy is misguided; all workers should participate. Framework is wealth and income inequality, secure retirement Income, GDP and societal contribution. Benefits local, regional, national, and international economies. Communication and engagement with plan participants - both current and future- taxpayers, legislators, employers, business owners, and societies at large.
Michael Kahn, PhD
Baby Boomers retiring and majority ill-prepared. 40 Million households (25-64) do not have retirement accounts. Insufficient 401(k) savings, DC plans costly and ineffective, private pensions disappearing, Social Security cuts, plus increased healthcare costs. Pressure on public assistance, reverting to elder poverty. No safety net. Source: NIRS
Communicating Value of Good Pensions Defined Benefit Plans are GOOD Pensions Shift to DC plans increases income inequality, which in turn drags down the economy and prolongs recessions. Shift to DC plans has created accelerating retirement savings crisis Angus Deaton, PhD; Nobel Laureate, Economic Sciences, 2015: The United States has moved primarily to defined-contribution pension plans with associated stock market risk, whereas, in Europe, defined-benefit pensions are still the norm. Future financial insecurity may weigh more heavily on U.S. workers, if they perceive stock market risk harder to manage than earnings risk, or if they have contributed inadequately to defined-contribution plans.
Talking Points 1. DB plans serve many purposes beyond providing constituents with retirement income. 2. DB plans are proven to be extremely cost effective and reliable in delivering retirement income security. 3. Many DB plans are underfunded today, not because of paltry long-term returns. Rather, sponsors contributions neither sufficient nor consistent enough to properly fund benefits. 4. Returns, over time, are average. 5. DB plan funding surpluses and deficits occur over normal cycles of investment returns. 6. Plans with actuarially sound funding policies will achieve 100% funded status over the long run. Short term market cycles can veer plans off course. 7. Healthy DB plans are underpinned by a sustainable benefit design, a strong governance process, and the sponsor s commitment to regularly fund the plan. * 8. Within DB plans responsible investment reduces investment risk, and is cognizant of the impact both financially and societally. 9. DB plans investments create jobs, strengthen GDP, and reduce income inequality.
Pending Forums: Communicating Value of Good Pensions CORPaTH activities Annual Summit Forum & Awards Banquet December 2016, Las Vegas, NV NORTH AMERICA'S BUILDING TRADES UNIONS 2016 LEGISLATIVE CONFERENCE, Washington, DC New York, NY Chicago, IL Los Angeles, CA London, U.K Brazil CORPaTH Website: www.corpath.org
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Check s in the Mail? A CORPaTH Film Documenting the movement to protect and promote retirement security. Coming Soon #BCPensionSummit
CORPaTH Strategic Allies: Resources for Communication & Message NCCMP (National Coordinating Committee for Multiemployer Plans) An organization of national, regional and local multiemployer pension and health and welfare plans, International and Local Unions, national and local employer associations, individual local employers, and multiemployer fund professionals. www.nccmp.org NCPERS (National Conference on Public Employee Retirement Systems) Pension Defense Tool Kit. A useful template of what a local or regional media tool kit should contain as local and regional media outreach efforts build to support retirement security for employees. www.ncpers.org/promotingpensions NIRS (National Institute for Retirement Security) A non-profit research and education organization established to contribute to informed policymaking by fostering a deep understanding of the value of retirement security to employees, employers, and the economy as a whole. http://www.nirsonline.org
CORPaTH Strategic Allies: Communications, Message, Research www.unpri.org Principles for Responsible investment Explicit relevance to the investor of environmental, social and governance (ESG) factors, and long-term health and stability of the market as a whole. Long-term sustainable returns dependent on stable, well-functioning and well governed social, environmental and economic systems. Growing recognition in the financial community that effective research, analysis and evaluation of ESG issues is a fundamental part of assessing the value and performance of an investment over the medium and longer term Requires investors and companies to take a wider view (of) full spectrum of risks and opportunities, in the interest of their clients and beneficiaries.
But I like living in the past. It s where I grew up. The New Yorker #BCPensionSummit
AFTERNOON BREAKOUT: Communicating the Value of Good Pensions BC PENSION FORUM February 26, 2016
Introductions Corina De Guire, MA Director, Plan and Member Communications BC Pension Corporation Type of Plan: DB plan #BCPensionSummit
Communicating the value of the plan with members is challenging #BCPensionSummit
Understanding our environment helps us be responsive to members communications needs #BCPensionSummit
Understanding members helps us focus on their needs and get their attention Member-centric communications Simple, relevant, impactful Create a relationship through a lifetime of communications #BCPensionSummit
It s important to join the conversation Do the research so you know the facts Create partnerships to share the facts Tell your story before others tell it #BCPensionSummit
A holistic approach reduces risk Consistent Strategic All channels and audiences Long term Steady, even tone #BCPensionSummit
Thank you for joining us! Corina.DeGuire@pensionsbc.ca rauer@aninvestor.com riley.stjacques@pbiactuarial.ca