DBplus with Contribution Choice

Bringing together the Best of DB, DC, and Group RRSPs

Our latest innovation, DBplus with Contribution Choice, combines the contribution rate options and cost certainty of a defined contribution plan or Group RRSP with the security and sustainability of one of Canada’s fastest growing defined benefit pension plans.

Employers that join DBplus with Contribution Choice can tailor the fixed employee contribution rates, and associated employer matching rates, to their workplace structure. Instead of setting one rate for all employees, employers can now offer a range of rates that employees can choose from.

Why Contribution Choice?

Employers can satisfy employees at different stages of life with enhanced contribution flexibility. A single contribution rate may not work for all employees and could be seen by some as a barrier to participation. With Contribution Choice, employers set the range of rates (within certain limits) that provide employees with flexibility, with an employer cost that aligns with their budget and makes the most sense for their organizational needs.

How it works

Upon enrolment, employees choose their initial contribution rate from those offered by their employer. The employer contributes at a corresponding rate as outlined in their Participation Agreement. The employee can continue to contribute at the initial rate, or they can select one of the alternate rates available to them during a predetermined election period (typically annually).

When an employee chooses or changes their contribution rate, the employer's contribution rate also changes. Employers get a pension solution tailored for their workforce, and employees get to personalize their contributions and control their retirement income.

Employer and employee rates combined cannot exceed 18% of the employee’s annual earnings, the maximum limit under tax law. There is some flexibility in the minimum contribution rates that can be offered.

A customizable solution

Contribution Choice can be combined with other flexible options, such as phase-in, asymmetrical contributions (in which the employer contributes more than the employee), and rates that differentiate by employee class, giving employers the ability to offer a pension plan that accommodates their unique workplace needs.

Example 1

ABC Co joins DBplus with Contribution Choice and offers its employees the option to contribute at 4%, 5%, or 6%. ABC Co will match each employee’s contributions.

  • Employee A chooses 4% at enrolment. ABC Co will also contribute 4%. The following year, Employee A chooses to start contributing at 6%. ABC Co will also contribute the corresponding 6% match as of the same date.
  • Employee B chooses to contribute at 6% at enrolment and opts to continue contributing at 6% going forward. ABC Co will continue to match the employee’s contribution at 6%.

Example 2

XYZ Inc has a diverse range of employee classes, with management, salaried and hourly employees. XYZ Inc joins DBplus with Contribution Choice and offers rates to each employee class as follows:

  • Management contributes at a flat 9% rate with a match
  • Salaried employees choose between 6%, 7% or 8% with a match
  • Hourly employees choose been 4%, 5% or 6% with XYZ Inc contributing 6%, 7% or 8% respectively

We’re here for you and your employees

The expert team at CAAT will work with you to tailor your participation to meet your budget and your talent management needs. We'll also support your HR and payroll team through onboarding and beyond and provide your employees with education and online decision support resources to help them understand their options and appreciate the value of a DBplus pension. Learn more about the support you’ll receive as an employer here.

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Flexible solutions with DBplus

Discover more about the tailored solutions CAAT can offer you and your workplace.

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Resources for interested parties

Online resources that can help facilitate conversations with your network about DBplus.

Interested in bringing DBplus to your workplace?

CAAT’s team of experts are here to answer your questions and understand your needs to propose a tailored pension solution that works for you and your employees.

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