January 16, 2008 7:30 AM to 9:00 AMRoyal Mayfair Golf & Country Club, Edmonton, Alberta
Format:
In Person
DEFINED CONTRIBUTION RISKS: Pension Adequacy and Replacement Ratios::
There has been significant movement from Defined Benefit (DB) to Defined Contribution (DC) pension plans, with few new DB plans being underwritten over the past 10 to 15 years.
While DC Plans empower employees with control of their Investments employees also assume the corresponding responsibility to manage those investments to secure their retirement nest egg effectively transferring retirement risk from the sponsor to the employee. For the most part, DC plans were designed based on an internal set
Of budgetary constraints and external competitive pressures. Unfortunately in doing so, even in light of the best adhered to CAP Guidelines, Sponsors may have inadvertently ignored the employee perspective, specifically, explaining and clarifying what retirement income may by delivered by DC Plans.
In the coming years more Canadians will retire from DC plans than ever before. Many in our business fear lawsuits grounded in complaints about inadequacy of retirement income, or insufficient replacement ratios* due to ill-designed DC Plans. These lawsuits are likely to take another couple decades, as plan members retire in sufficient numbers from DC Plans to result in widespread legal action.
Please join us as Minaz Lalani from Towers Perrin provides practical guidance on the role of employers in managing, or avoiding the potential risk of litigation of retirement (in) adequacy in DC Plans.
Minaz will discuss:
• A better understanding of retirement adequacy and replacement ratios, answering the question: How much is adequate retirement income?
• Managing employee expectations on retirement income and providing worthwhile retirement adequacy education and communication| to employees, and;
• Actions employers can take to "bullet-proof" retirement adequacy risk.
Minaz Lalani is a Principal and consulting actuary with Towers Perrin in Calgary. He has established and designed DC Plans since the late 1980s; recently, he has been strategically involved in managing DC risks for large DC clients. Minaz has over 25 years of experience in strategic, actuarial and human resource consulting services, including pension review and design, financial management of retirement plans, employee education and governance, including integration of retirement plans in merger and acquisition situations.
* Ratio of retirement income as a percentage of earnings at retirement.