In Keith Ambachtsheer's recent letter, he shares a lens on improving the globe's retirement income systems.

An excerpt from the letter regarding the innovations of DBplus:

“The other Pillar 2 Canadian financial innovation relates to providing employers who cannot, or longer want to sponsor a traditional DB, DC, or Group RRSP plan an option to join a well-managed, collective Target Benefit plan by only committing to a predetermined fixed contribution rate. The innovator here is the Ontario-based Colleges of Applied Arts and Technology (CAAT) Pension Plan, which has opened its plan to private, public and not-for-profit employers across Canada. The Plan has a $15.8 billion asset base and is 119% funded on a going-concern basis, using a 4.95% discount rate. Its actual 10yr. annualized net investment return was 9.9%. The Plan’s stated vision is to expand collective pension coverage across Canada through innovation, ‘delivering both value to members and flexibility to their employers’. For employees this means predictable lifetime retirement income, conditional inflation protection, survivor benefits at no cost, early retirement options, and portability. For employers, the offering removes pension management costs and risks, provides contribution cost certainty, and phase-in contribution levels to ease change management. CAAT’s not-for-profit trust model uniquely means no bonuses for executives, and its joint governance model means members and employers have equal say in Plan decisions about benefits, contributions, and funding. The CAAT model is cost-effective, expected to deliver twice the retirement income compared to Pillar 3 models.”

Read the full letter here