By Steve Eadie, Chair of the ICPP Management Board

This year is poised to be a transformative one for the Canadian pension industry. Recent enlightened policy changes and innovations are driving a revolution in defined contribution pension plan design. There is widespread recognition that private sector Canadians desperately need improved access to quality lifetime retirement solutions. They need better workplace pension arrangements that are mutually beneficial for both the employee and employer.

The ICPP is proud to be a part of this important change. From the outset, we have worked hard to create a not-for-profit pension model that optimizes member retirement outcomes while minimizing costs and hassle for participating employers. Our collective defined contribution pension plan delivers reliable lifetime retirement income to the ICPP’s members. Additionally, our cooperative framework makes it possible for even the smallest employers to join the ICPP and deliver a high quality pension to their valuable employees.

Before we look to the year ahead, we wanted to take a moment to review some 2021 ICPP highlights:

– With the addition of new participating employers into the ICPP, assets within the ICPP framework, inclusive of legacy pension plan assets, have increased to over $100 million.

– The annual after-fee return of the ICPP Accumulation Fund, the primary fund used to accumulate retirement savings, was approximately 27% during 2021. These strong returns are shared by all members of the ICPP invested in the ICPP Accumulation Fund.

– With the growth of the ICPP asset pool, annual fees charged against members’ accounts were reduced by approximately 15% year over year during 2021. This reduction in fees translates into greater future savings for our members.

– Membership within the ICPP defined contribution savings arrangements has increased to over 700 members. With a membership pool this size (and growing) the ICPP is a more cost-effective option for most employers currently offering their own single-employer DC pension plan.

– Any Canadian employer can now join the ICPP and reap the benefits of our investment pooling and streamlined administration.

Looking forward to 2022, we will continue to expand our reach to Canadian private sector employers, grow our membership, and keep our promise to deliver lower fees.

In fact, one of the hallmarks of the ICPP is our fervent commitment to low fees. The plan is governed by a not-for-profit management board and does not answer to external shareholders. Quite simply, we keep investment fees and operating costs low to ensure the most money possible is left to pay for member retirements. This means contributions go further and members can expect higher pensions.

One exciting development this year is the ICPP’s expected implementation of a Variable Payment Life Annuity (VPLA) to provide lifetime pensions to our retired members. The ICPP was built to incorporate this innovative payout strategy and has been patiently awaiting the appropriate legislation and policy framework to put it into action. This year should see the first ICPP pensioners begin to receive regular payments from the ICPP VPLA.

To close, I would like to wholeheartedly thank all of our participating employers, members, and supporters. We have always envisioned the ICPP as a public good. It was designed to address the shortcomings of the pension industry in Canada. This year, our goal is to reach many more workplaces and set a higher standard for the delivery of pensions to Canadians in the private sector.