Common Good FAQ
Common Good is specifically designed to meet the retirement saving needs of full-time, part-time and contract/freelance workers of all income levels in the nonprofit sector.
Common Good is also designed to support nonprofit employers of all sizes who are interested in offering a high-quality retirement program for their employees, especially those who find it challenging to offer such a program on their own. It enables employers to facilitate employee retirement saving and, where resources permit, contribute themselves to their employees’ savings.
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.
We understand the need for nonprofit organizations to avoid unfunded liabilities and risks, and the Plan’s structure and governance model are expressly designed to protect participating organizations against these:
- Participating employers/associations have no obligation to contribute to employee/member accounts unless they wish to do so under policies and terms they themselves will set and can changes as appropriate to their needs.
- There is no investment risk to the participating organizations, unlike a traditional pension plan. The risk of investment volatility would be borne by individual savers enrolled in the Plan. However, investment providers and products will be selected using a rigorous process and investment choices curated based on best outcomes for Plan members, balancing risk and reward over time. This would include investment choices treated as appropriate default investment options in other jurisdictions (e.g., low-cost target date funds).
- The Plan’s proposed structure exceeds existing regulatory requirements for group retirement plans, and organizational by-laws and policies will employ industry best practices and standards with respect to governance, fee/cost disclosures and member education and communication.
- The Plan’s non-profit incorporation and fiduciary role together ensure that all decisions are made on the sole basis of members’ interests. Unlike commercial retirement saving options for individuals, there is no opportunity for conflict between the provider’s commercial interests and the Plan’s members. Non-profit organizations can trust that their employees’/members’ interests will be paramount.
Organizations who participate as a Plan sponsor with a representative on the Plan’s Board of Directors will have legal obligations, but all directors will be protected by D&O insurance. While the board of directors will provide strategic oversight of the Plan, all operational risks will be delegated by the board and borne by the service providers.
- 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.
Secure a better retirement for all nonprofit workers
An initiative to create a national, portable retirement income plan for Canada’s nonprofit and charitable sector