Governance Structure
Retirement plans in Canada are subject to a number of regulatory regimes, and the governance structure for any plan is dependent upon which of these regimes is applicable. While some of the governance activities relate to specific legislated rules, others are “best practices” that do not have the force of legislation.
With respect to a Group RRSP, two regulatory/governance regimes are applicable:
1. Canadian income tax legislation, which places limits on tax-deductible contributions and necessitates certain levels of tax reporting in respect of the plan.
2. Capital Accumulation Plan (CAP) Guidelines, issued in 2004 by the Joint Forum of Financial Market Regulators.
We recommend the formalization of the governance structure, and will work with you in the development of a policy document to use in the governance process.
To assist with the governance process that applies to investment alternatives, we maintain an extensive database of investment information. We use this database to provide comparative investment information – more than just rate of return data – that helps identify how well a fund manager meets their published investment objectives. We also provide regular reports providing updates to the regulatory regime, record keeper services, fund manager changes, and investment performance. The frequency of these reports is determined at the time a plan is implemented, and may be annual (minimum frequency), semi-annually, or quarterly.
Selection of a Recordkeeper/Investment Provider
Once the plan design and governance structure has been established it is possible to survey the companies that offer the necessary plan services and identify the “best fit” for your plan. All companies active in the Canadian retirement plan market place price their arrangements according to the demographic and financial characteristics of the plan under review. “Off-the-shelf” solutions tend to be used only by the smallest plans.
We will solicit proposals on your behalf, specific to your plan requirements. From time to time after the initial implementation date we will also contact alternative providers to ensure that your plan’s pricing basis continues to be competitive with the market.
Employee Communication Program
Adoption of the CAP Guidelines entails the provision of certain information to plan members on a regular basis. There are many reasons to provide information that supplements the basic level defined by the CAP Guidelines, and most recordkeeping firms offer a significant range of communication media and materials for use with their clients. We will help you identify the type of materials that your recordkeeper offers for communication, and assist in the personalization of their “standard” materials to fit your specific plan characteristics. We will also assist in presenting the material to your employees on a regular basis. Note that we do not offer personal financial planning but can refer employees to qualified financial planners should that type of service be required separately from the plan.
Problem Resolution
When issues arise we will be there to help out. Most record keepers provide high levels of customer service but problems can pop up from time-to-time. We can escalate problems to the appropriate individual, should that be required, and are always available to discuss the services being provided. First and foremost, we plan to partner with you in the operation of your Group RRSP – we’re on your side and hope you’ll view us as an extension of your own company, specifically working on your Group RRSP.
WE PROVIDE HIGH-QUALITY CUSTOMER SERVICE
• We focus on your plan, your company, your employees, and the associated needs.
• Our investment database is proprietary and allows us to supplement the “standard” investment data provided by the record keeper/investment firm providing services to your plan.
• We are happy to provide references should you wish to hear about us from current clients.
WE ARE AFFORDABLE AND FLEXIBLE
• Underwriters Alliance is Life and Accident/Sickness licensed through the Financial Services of Commission of Ontario (FSCO) and so can be compensated through insurer commissions. This is applicable to both group benefit and retirement plan clients. In the case of a retirement plan client, when we receive commissions for our services, the selected insurer typically adjusts the schedule of Investment Management Fees to reflect the commissions. Since member accounts typically bear the cost of the Investment Management Fees, the result is that members pay for our services.
• Underwriters Alliance also offers a fee-for-service pension consulting approach. As such, services are provided on a fee basis related to the project in question and time spent working with the client.
• We are open to discussing a “hybrid” approach to our pension compensation, in which the initial plan implementation work is dealt with on a fee-for-service basis and subsequent work is compensated through insurer commissions. For example, the development of a governance document might be dealt with as a fee project, with other services covered by commissions.