We spoke to a couple of senior partners about why their firms signed up for DBplus, the defined benefit pension plan from Lawyers Financial. For both, the ability to give their teams a running start on retirement savings was more than just good for business: it was the right thing to do.
Jonathan Speigel, a partner at Mississauga-based Speigel Nichols Fox, explains it this way: “Until now, retirement plans for lawyers put all the investment risk on their shoulders. Whether we’re talking about retirement savings plans or defined contribution pension plans, it’s up to the individual to make sure the money won’t run out. That’s a lot of pressure on someone who already has a demanding job,” Speigel says.
DBplus is a game-changer
In 2020, Lawyers Financial partnered with the CAAT Pension Plan to offer DBplus to Canada’s legal community. Until then, most lawyers had to create their own form of retirement income.
That’s why Speigel and his partners were intrigued when they heard about DBplus through an industry podcast. As an existing plan with a stellar track record, DBplus offers predictable, inflation-adjusted retirement income—for life. “It was an easy decision,” he says. “Everyone at our firm agreed that making income for life part of our compensation package was the right thing to do.” Like many veteran lawyers, he wishes he had the opportunity to participate in a defined benefit pension plan when he was coming up. Before DBplus, many small and medium-sized firms couldn’t afford the price tag or fiduciary risk attached to such plans.
Jonathan Richardson, a partner in the newly minted Ottawa-based firm of Richardson Hall, came to the same conclusion. He also sees the limitations of retirement income plans that leave lawyers on the hook to choose their own investments and manage all the risk. “It’s nice to offer certainty,” he adds.
People want a sure thing
Certainty is the major advantage of all defined benefit pension plans and that’s what Canadians want. 77% of Canadians believe that employers have a responsibility to provide a pension plan, and nearly three quarters of us (71%) are willing to forgo a higher salary for a better pension.1
With a plan like DBplus, employers and employees commit to contributing a fixed percentage (between 5% - 9%) to the plan and receive secure and predictable retirement income for life based on their total contribution amount.
Speigel and Richardson expect defined benefit pension plans to grow in popularity for three reasons:
- Investments are pooled and managed by independent portfolio managers with access to alternative investments not accessible to individuals.
- Employees can count on a predictable lifetime pension based on total contributions.
- DBplus poses virtually no risk for the employee or the employer. Employees receive secure, predictable retirement income for life plus other benefits, including a no-cost survivor pension, cost of living protection and early retirement options.
Both lawyers see DBplus as a way of providing a more comprehensive and attractive compensation package for lawyers at all stages of their careers, no matter where they've worked previously. “CAAT made it extremely easy for our staff with defined contribution pension plans from previous jobs to roll their savings into DBplus,” Richardson says, a feature that sealed the deal for him and his law partner.
All things being equal, a defined benefit pension plan can be the reason top recruits choose your firm – and the reason star employees stay. Whether you’re an employee, a partner or human resources leader, consider the advantages of DBplus.
Visit lawyersfinancial.ca/pension to get started.
Learn more about DBplus on Episode 6 of the Work That Works podcast.
Source: 1. 2021 Canadian Retirement Survey from Healthcare of Ontario Pension Plan (HOOPP) and Abacus Data.