Derek Dobson

Looking back on what the experts say – Save with SPP

July 21, 2022

Summertime, and while the living is easy, it’s not always easy to get people on the phone for an interview. We get it – there’s only a few short months of great weather in this country, after all.

So, Save with SPP had a look back on what we’ve learned about retirement and saving over the past while through past interviews, and via book reviews, from industry experts and leaders.

Derek Dobson, CEO and Plan Manager of the Colleges of Applied Arts & Technology Pension Plan, pointed to new research from the Canadian Public Pension Leadership Council that showed the economic value of pension dollars.  The study found that $16.72 of economic activity arises from every $10 paid out from a pension plan, notes Dobson. And that type of benefit comes from efficient plans, he explains. “Any plan that uses experienced investment professionals, and pooling – I include the Saskatchewan Pension Plan as an example of that – is delivering pensions efficiently,” he tells Save with SPP.

In an interview about the ins and outs of registered retirement income funds (RRIFs), BMO’s James McCreath noted that converting some or all of your registered retirement savings plan (RRSP) to an annuity instead of moving it to a RRIF is also an option.

“As interest rates rise, the functionality and usefulness of annuities go up,” he told Save with SPP. You can read the full interview here.

Prof. Luc Godbout, remarking on the trend of people working longer, had an idea on how to tweak the retirement system to accommodate the needs of older workers.  Allowing Canadians to postpone Old Age Security until age 75, and moving the conversion dates for RRSPs/RRIFs to 75, would “optimize the mechanics of pension plans, and also encourage Canadians to remain in the workforce, which improves health and also helps with Canada’s looming labour shortage.” Here’s where you can find the full article.

The author of Getting Out of Debt, Michael Steven, had some interesting thoughts on the importance of saving (once debt is under control).

“Saving requires discipline, a habit you build over time. It can be hard to save instead of spend, but if you have to attain financial freedom, then saving is one of those things you will have to embrace.” You can read the rest of our book review here.

There’s a lot to the broad topic of retirement and saving. For sure, belonging to a workplace pension plan is a key step towards retirement security. If you are saving on your own, you do need to understand the “decumulation stage” when savings are converted to income, either via an annuity or through drawing down a RRIF or similar vehicle. If you don’t have a lot of savings and have boomed your way into your 60s, then the proposed federal changes to benefits discussed by Prof. Godbout may make sense for you. But at the end of the day, as the old saying goes, it’s not what you make, but what you save, that helps your future self paddle through the waters of retirement.

If you don’t have a pension plan at work, and/or haven’t started saving for retirement yet, help is at hand. The Saskatchewan Pension Plan is open to any Canadian with RRSP room, and offers pooled investing, low-fee investment management, and many retirement income options including annuities. Check out SPP today!

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Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


Pension dollars are a boost for Canada’s economy, study says

December 16, 2021

A new study has found that every $10 of public sector pension that is paid out to a retired member returns $16.72 of activity in the Canadian economy.

The study was produced by the Canadian Centre for Economic Analysis on behalf of the Canadian Public Pension Leadership Council.

Save with SPP spoke with Derek Dobson, CEO and Plan Manager of the Colleges of Applied Arts & Technology Pension Plan (CAAT) and a Co-chair of the Council, to further explore the survey’s results, and to talk generally about the value of pension programs.

He notes that the study is “agnostic” about what type of pension plan is producing the $10 spent by its retired members.

“Any plan that uses experienced investment professionals, and pooling – I include the Saskatchewan Pension Plan as an example of that – is delivering pensions efficiently,” he explains. So whether the $10 is produced by an efficient defined benefit (DB) plan or an efficient defined contribution (DC) plan, the economic benefits are the same.

The study noted that – looking at public sector pension plans only — $82 billion of economic activity was generated in 2019, “supporting 877,100 jobs and $33 billion in wages for Canadians,” according to the study’s executive summary. Governments gain $21 billion in tax revenue, the study notes. Collectively, Canadian public sector DB plans have an eye-popping $1.27 trillion in assets.

While the study found pension spending generally benefited all Canadians, one interesting aspect was that rural businesses seemed to derive more positive gain from local public sector pensioners.

Dobson says part of the reason for this may be the current trend towards a migration from expensive city living to more affordable smaller centres. “The housing is more affordable in smaller cities and towns,” he says. “We also found that those living in smaller towns tend to spend more locally than those in cities – so that is part of the reason the economic benefits of pensioners had a 6.5 per cent bump” in rural areas when compared to urban centres.

Given the “win win” nature of having a good pension plan – the retired member gets the steady, predictable income, while the economy benefits from it being spent – we asked Derek Dobson if there should be wider availability of good pension plans for those who lack them.

CAAT’s own DBplus pension plan, a program that offers a strong, secure lifetime pension program, has grown in just two years to include 200 participating employers. “We are trying to remove barriers to access to good pensions,” Dobson explains.

A good pension, he explains, has the added benefit of helping employers attract and retain good employees. It delivers twice the retirement benefits per dollar saved than investing independently in Group RRSPs, and helps employees reach their retirement goals faster with employer-matched contributions. Dobson says it is a shame to see well-trained healthcare workers and engineers leave the country for jobs elsewhere – a good pension program can keep them here in Canada.

Another advantage for employers is that if a pension plan is offered by a third party rather than being administered and funded by the employer, it’s a time, risk and funding relief for the employer. “No Chief Financial Officer in the private sector wants to see pension liabilities on their balance sheet,” he explains. With DBplus, the employer’s pension cost is a fixed amount.

“Many studies have shown that year after year, more and more Canadian workers are willing to forego more pay in order to get a better pension,” he says.

The only three organizations he currently sees as trying to bring pension coverage to underserved sectors are CAAT, through its DBplus program, the OPSEU Pension Trust, through its similar OPTrust Select plan, and the Saskatchewan Pension Plan through its voluntary, open defined contribution program.

Dobson concludes by saying that Canada has become known around the world for the efficiency of its pension system, the “Maple Model” of pension plan that feature pooling, low administration costs, expert investing, and joint governance where members and employers have an equal say in how the systems are run.

“Public service pension plans are an amazing and unique asset for Canada. So the more people that can be brought in, the better – pensions really help workers, retirees, their families and the economy.”

We thank Derek Dobson for taking the time to speak with us.

Did you know that the Saskatchewan Pension Plan has, according to its 2020 Annual Report, has more than $528 million in assets and 32,613 members? This growing open defined contribution plan is designed specifically for those without a workplace pension – a made-in-Saskatchewan solution to the problem of retirement saving for individuals and businesses. Check them out today.

Join the Wealthcare Revolution – follow SPP on Facebook!

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


The CAAT is out of the bag – any employer can now join established “modern DB” plan

July 9, 2020

We often hear how scarce good workplace pensions are, and how many employers, notably those in the private sector, have given up on offering them altogether.

But, according to Derek Dobson, CEO and Plan Manager of the Colleges of Arts and Technology (CAAT) Pension Plan, there is an option for any Canadian employer that doesn’t want to go through the effort and expense of managing a pension plan for their employees. That option is CAAT’s DBplus plan.

Dobson tells Save with SPP that there are three main themes as to why some employers – with or without their own pension plan – might want to look at DBplus.

Running what is called a “single employer” defined benefit (DB) plan means the risk of ensuring there’s enough money invested to cover the promised benefits rests on the shoulders of one employer. In a multi-employer plan, however, many employers are there to shoulder the load – the risk is shared.

As well, he notes, it might be a chance to upgrade pension benefits. “A lot of organizations want to have access to something better for their people… some employers offer nothing, or a group RRSP. Now they can move to a modern DB plan,” Dobson explains. One study by the Healthcare of Ontario Pension Plan (see this prior Save with SPP post) found that most Canadians would take a job with a good pension over one that pays more, Dobson notes.

A final benefit, he says, is the ability that DBplus has to move all employees to a common retirement benefit platform. “In many organizations, you may find that one group of employees has nothing, one has a defined contribution plan, others have a DB plan that is now closed to new entrants… DB plus allows you to put everyone on the same platform,” he says.

Noting that another large pension plan – Ontario’s OPSEU Pension Trust – has launched a similar program for non-profit organizations, Dobson says the idea of leveraging existing pension plans to deliver pensions to those lacking good coverage “is great…the long and the short of it is that there’s a general belief that these larger plans want to put up their hands to help where they can.”

“It’s the right thing to do,” he says.

Why are pensions so important?

Dobson points out some key reasons. “The average person these days will live to age 90, and on average, they retire at age 64 or 65,” he explains. “That’s 25 years in retirement. So having a secure, predictable income, one with inflation protection and survivor pensions, and that is not being delivered for a profit motive – that’s why these plans are so powerful.”

Another great thing about opening up larger plans to new employers is that it addresses the problem of “pension envy,” Dobson says. Instead of pointing out who has a good pension and who doesn’t, now “everyone has access to one, to the same standard.”

Those without a pension have issues to face when they’re older, he warns. “The Canada Pension Plan and Old Age Security systems weren’t designed to be someone’s only source of income,” he explains. “We had a three-pillar system in the past – CPP, OAS, and the third pillar, your workplace pension plan and your private savings,” Dobson says. But a large percentage of Canadians don’t have pensions at work, and a recent study by Dr. Robert Brown found that the median RRSP savings of someone approaching retirement age is just “$2,000 to $3,000,” Dobson says. Yet the same study found Canadians are willing to try and save 10 to 20 per cent of their income for retirement.

Dobson says he is energized by the goal of bringing pensions to more Canadians. “It’s a way of making Canada better,” he concludes.

Here’s a video about how the CAAT pension plan delivers on benefit security.

We thank Derek Dobson for taking the time to speak to Save with SPP.

If you don’t have a workplace pension, or the one you have offers only modest benefits, don’t forget the Saskatchewan Pension Plan. SPP allows you to decide what your savings rate will be, grows those dollars at a very low management rate, and can convert the proceeds to a variety of lifetime pensions when you retire. Check them out today.

Join the Wealthcare Revolution – follow SPP on Facebook!

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


Pension plans are a sure way to deliver retirement security: Dobson

November 29, 2018

For Derek Dobson, the fact that Canadians “are struggling to put money toward their retirement goals” is a “monumental issue” that needs to be addressed.

Dobson is CEO and Plan Manager of the Toronto-based Colleges of Applied Arts & Technology Pension Plan. At the end of 2017, the CAAT Plan had $10.8 billion in net assets and served more than 46,000 working and retired members.

Dobson tells Save With SPP that the statistics show that “there has been a decline in the percentage of working Canadians who have access to a pension savings program” in most Canadian workplaces. He says that the decline of workplace pensions started in the 1960s when the Canada Pension Plan started, a trend that has continued for decades.

But that trend can and should be reversed, he says. These days, it is harder to attract and retain valuable employees, and workplace pensions play an important role. “Employers are competing for workers again,” he explains. He says CAAT’s new defined benefit (DB) plan design, DBPlus, open to any organization, is getting inquiries from large and small employers. “We had a tree service company owner, with a staff of four, call us up about joining, because he found his people would leave to get jobs where there is a pension.”

Both CAAT and another Ontario jointly sponsored DB plan, OPSEU Pension Trust, have developed pensions that expand access to well-run defined benefit pensions that are easy for members and employers. Recently Torstar and its employees joined CAAT Pension Plan’s DBplus. When the matter was put to a vote, 97 per cent of the members of the Torstar plans voted in favour of the merger.

“Along with other pension plans, we are trying to get the message out that a measure of the health of Canada is how good its standard of living is in retirement,” Dobson explains.

People, he says, visualized getting old around age 75 and then passing away soon after. “Their jaw drops when we show them that it is highly likely they will live until their high 80s or early 90s,” he says. “They could easily live for 25 years of retirement. With improving longevity people need to think more about their financial security in retirement.”

Yet, he notes, those without pensions at work aren’t saving much on their own. The average RRSP balance in the country is only around $65,000 at age 65. That’s not going to be sufficient to keep people at a reasonable standard of living for 25 years, Dobson says.

Saving for retirement on one’s own is not easy, he says. While financial literacy courses help, retirement savings is a complex challenge for most. Canadians already are having to manage their debts, so “having a picture of what they want their future to be like” is difficult. “They want a good standard of living in retirement, but they don’t know where to start, or where to find value across so many choices.” And that can be so overwhelming that people “are not getting started putting money toward their retirement goals.”

Pensions in the workplace work because it is an automatic savings program, Dobson explains. “Your contributions come off your paycheque, so you don’t have to think about it,” he says. But decades later, he says, CAAT members notice that they are receiving a pension comfortably and the value is strong as they receive about $8 in benefits for every dollar they contributed, a fact that “resonates” with them, Dobson says.

The importance of having an adequate pension is something Dobson is passionate about; it is his hope that more and more employers will take advantage of the new and easy defined benefit offerings available to extend retirement security to more Canadians.

We thank Derek Dobson for taking the time to speak to Save With SPP.

If you are saving on your own for retirement and want someone else to do the heavy lifting of retirement asset management and decumulation – turning savings into lifetime monthly income — the Saskatchewan Pension Plan may be the plan for you. Check it out today.

Written by Martin Biefer
Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. After a 35-year career as a reporter, editor and pension communicator, Martin is enjoying life as a freelance writer. He’s a mediocre golfer, hopeful darts player and beginner line dancer who enjoys classic rock and sports, especially football. He and his wife Laura live with their Sheltie, Duncan, and their cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22