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Benefits and Pensions MonitorBlair Richards CEO, Halifax Port ILA/HEA Pension Plan and Trust Funds Blair Richards’ background is in industrial relations. As an executive member of a local union, he was involved with various negotiations between the Halifax Port International Longshoreman’s Association (ILA) and Halifax Employers Association (HEA). Over time, he was also involved in many special projects, including the review of pensions and benefits, early in 1992. Richards led a steering committee that recommended some substantive changes to the pension system. As a result, Richards was asked to help implement the changes including the creation of the Halifax Port ILA/HEA Pension Plan and Trust Funds. Seven years later, after resigning from the chair of the board for the plan, Richards was asked to forego his involvement with the unions and to accept, in early 2000, the position of chief executive officer, a title he still holds today.
When he first started as chairman of the board of trustees for the Halifax Port ILA/HEA Pension Plan and Trust Funds, Richards realized that he had no credentials for the position. “I realized that after two years of decision making, I was an accident waiting to happen,” says Richards. “One of the reasons we got into trouble (with the pension plan) was because we had a history of people in a position of authority that weren’t credentialed to be there.” With that, he decided to learn what he could about the pension world and achieved his executive MBA and CEBS designation, as well as a number of other certificates including modern portfolio theory from Wharton School. Once he had the tools and knowledge, Richards turned his attention to the specific problems of the Halifax Port ILA/HEA Defined Contribution pension plan. In 1985, the organization had started a DC plan. Before that, the multi-employer plan was Defined Benefit. The plan has approximately 450 active members and 450 retirees, and roughly $132 million in assets. New Options In 1998, the plan created new investment choices and added a portability option. “The fact that we were paying our own pensions meant members didn’t have any options,” says Richards. “When they went to retire, members got a pension from us. But, new retirement options like LIFs and RIFs worked well for people in certain circumstances, and we weren’t prepared to offer them, so we decided to implement portability.” The new investment options reflected a lifecycle approach where members could choose the option that best suited their position in life. However, the organization soon realized that most of its members remained in the default option, which was a replica of the former allocation which the organization had imposed on its members regardless of their age or experience. Increase Members’ Knowledge “We realized that it wasn’t so much a conscious decision as it was apathy.” But, it wasn’t that the organization hadn’t made the effort to educate its membership. In fact, the plan made many efforts to communicate. “People simply didn’t spend time to understand the plan and certainly didn’t understand investments. And, if our goal was to increase people’s knowledge in that area, we had failed miserably.” The plan realized that the goal was realistic, but that it must change the way it went about doing it. Since sending out correspondence wasn’t accomplishing the goal, the trustees recently decided to focus on target audiences based on the lifecycle approach. For example, “we will go to a small number of 40-year-olds and ask them to come with their spouses to a session and we’ll talk about issues that should concern a 40-year-old. In the process, we’ll talk about how our plan fits into retirement.” The approach will come into effect “any day.” The other method the Halifax Port ILA/HEA Pension Plan and Trust Funds uses to vamp up its communications materials is via its third-party administrator, which sends out material in addition to the plan. Sharing The Knowledge Today, Richards is involved with many industry organizations and is often seen on the speakers’ circuit advocating the importance of education. “I’ve come to see, in retrospect, that there is a universal need for education. I find myself in a position where I’ve gained the knowledge personally and through broader initiatives such as certifications and degrees, so I’m spending a fair number of hours promoting education. “Canadians should be able to walk through the retirement door with dignity and, to that end, I believe knowledge is the key.” |
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Blair Richards is passionate about education. As chief executive officer of the Halifax Port ILA/HEA Pension Plan and Trust Funds, he has learned the importance of education and believes it is needed at every level: pension plan members, plan sponsors, trustees, and legislators.