Whether you’re a longtime nonprofit employee or a freelancer, you deserve access to a high-quality retirement plan.
Even if you already have a plan through work or contribute to your own personal savings plan, chances are the Common Good Retirement Plan could help you save more, better.
Evidence shows that a well-run, well-governed collective retirement plan can deliver significantly more retirement security for every dollar of contribution, compared to individuals who prepare for retirement on their own.
Reality for many sector workers today
- Start saving late
- Contribute little and sporadically to TFSA or RRSP
- Pay some of the world’s highest mutual fund fees
- Left on their own to manage complex post-retirement phase
- Not protected by a legal duty to put their interests first
- Modest earners using RRSPs may have 50% or more of their government retirement benefits clawed back
- Struggle to make right decisions on investing their retirement savings
Opportunity in a collective plan
- Helps members save more through automatic/mandatory contributions
- Uses pooling and scale to keep costs low
- Helps members in the post-retirement phase
- Provides strong, nonprofit governance with legal duty to put members first
- TFSA structure for modest earners retains government benefits in retirement
The design of Common Good
The Common Good Retirement Plan would have the following features:
- Overseen by an independent board with a duty to put plan members’ interests first and composed of a combination of pensions and investment experts, and leaders from the nonprofit sector
- A low-cost, simple, professionally managed investment approach tailored to the age and retirement date of members
- Allows lower- and moderate-income earners to preserve Guaranteed Income Supplement benefits through a Group TFSA structure
- Allows middle- and upper-income earners to save thousands of dollars per year through a hybrid Group TFSA/RRSP structure
- Flexible contribution rates, with automatic features to help members save more
- Allows members to transfer in savings from other RRSP and TFSA accounts
- Provides assistance to members in the post-retirement phase, including low-cost investments, help with when to claim OAS, GIS, and CPP, and ways to turn your nest egg into a stream of income
Frequently Asked Questions
Common Good combines the principles of the world’s best pension plans with a more flexible design to reflect the needs of today’s workforce. The Plan will be operated by a nonprofit organization governed by a board of directors with a fiduciary duty – the highest legal duty of care – to act in the best interest of the Plan’s beneficiaries and will be centered on the following features:
- Accessibility: The Common Good plan will be available to freelancers and part-time, as well as full-time nonprofit sector workers whose employers sign up for the Plan.
- Portability: The Common Good plan is portable once a worker is enrolled, no matter where they work or live in Canada.
- Affordability: The investment fees negotiated by Common Good on behalf of members are much lower than market rates for comparable investment products, and a non-profit governance structure will ensure that the Common Good plan continues to prioritize affordability and benefits for members in all its administrative decisions.
- Flexibility: Nonprofit employers and associations may contribute to employee/member accounts or match their contributions, but are not required to do so. Options for member contributions will be designed to accommodate workers of differing income levels.
- Inclusion: As a community-based plan, spouses and common-law partners are also eligible to participate.
The Plan will be overseen by a nonprofit corporation governed by a board of directors with a fiduciary duty to act in the best interest of the Plan’s members. All service providers to the Plan, including the Plan’s administrator and investment managers, will be accountable to the board, which will be responsible for continuously improving the Plan in the interests of its members.
- The Plan will offer quality investments at much lower fees than individuals currently pay for commercial retirement saving plans. This can mean thousands of dollars in savings over a typical member’s lifetime compared to current retail alternatives.
- Individuals with lower and moderate incomes will be protected against the potential clawback of their GIS benefits in retirement, which could dramatically increase their retirement income.
- The Plan will operate as a nonprofit organization with a fiduciary duty to its members and a board of directors providing oversight and governance. This means that all decisions taken by the board of directors and the Plan’s administrators must be in the best interests of the Plan’s members.
- Contribution rates in the Plan can be flexible, with a low minimum threshold, depending on each person’s circumstances. Employers will also be encouraged to contribute, but would not be obliged to do so.
- The Plan will be open to all employees/members of participating organizations – contract/freelance, part-time and full-time. It will also be available for those wishing to contribute additional savings beyond any existing pension or other plan.
- The Plan is portable. Once enrolled, an employee/member can take the Plan with them to any participating nonprofit workplace and will have the ability to contribute to the plan through either employer payroll, if the employer participates in the plan, or the member’s bank account.
- Built-in flexibility for different life circumstances – The Plan may also allow members to pause their contributions, or access their money before retirement in certain circumstances, such as in the case of an emergency.
Interested in what Common Good could offer?