Kitchener-Waterloo Multicultural Centre introduces DB pension mid-pandemic
While many Canadians likely started the year worried about retirement savings as the markets were ravaged by the coronavirus fallout, some employers continued to introduce new savings offerings to help ensure their employees’ retirement security.
In May 2020, the Kitchener-Waterloo Multicultural Centre officially joined the OPSEU Pension Trust’s OPTrust Select, offering its employees a defined benefit plan for the first time.
Plan members and the employer will each contribute three per cent and members will receive a lifetime guaranteed benefit.
Read: OPTrust Select welcomes first members
The 53-year-old organization has grown to between 35 and 40 staff and a budget of about $2.5 million. “We were very reliant on our various levels of funders, but over the years we’ve also grown a fee-for-service aspect of the organization,” says Lucia Harrison, chief executive officer of the centre. “We provide interpretation services [at] very competitive not-for-profit rates, but it provides us with a revenue that we have more discretion on how that revenue is used.”
The Kitchener-Waterloo Multicultural Centre had talked about pensions for years, she says. “We had people in doing presentations, encouraging people to invest in [registered retirement savings plans]. We just weren’t able to cover the cost of a pension plan in the earlier years when we were so reliant on our funders because the funders typically don’t provide the funding for that.”
As the organization’s revenue grew, it started to look at pensions more seriously. Then it hired a new director of finance and business who took ownership of the idea and found a solution to offer to staff.
Read: Tips for moving from a single-employer to a jointly sponsored pension plan
Employees reacted very positively, adds Harrison. “I’ve been working in the not-for-profit sector for over 30 years and, of course, I didn’t have a pension. In looking at our staff now, where we’ve got a whole growing group of younger staff, I think they saw it as kind of a painless way to start investing in the pension.”
While the work to introduce the pension plan started before the coronavirus hit, the centre was able to keep all staff employed and was able to transition to working from home. No staff indicated financial concern about starting to contribute to a pension fund during the throes of a pandemic.
Harrison emphasizes the importance of offering a pension to those who don’t have one. “In the not-for-profit sector especially, where pay levels may not be as high, it’s a benefit that I strongly encourage employers to give to their staff, especially something like OPTrust, which is transferrable.”