Defined Benefit (DB) Pension:
Established in 1938, the PAOC Pension Fund is a multi-employer, defined benefit plan, which provides predictable and stable income throughout retirement. Federally incorporated and registered in the various provinces, the Fund follows legislative guidelines applicable to all Canadian pension plans. Led by a Board of Trustees appointed by the General Executive of the PAOC, all Fund administration is coordinated through the International Office, with a dedicated Pension Centre team available to answer any questions. Enrollment is open to all PAOC credential holders and eligible staff of PAOC churches and affiliates. It is an excellent way to save for retirement, generating an expected pension benefit based on I0% of all employee and employer contributions received.
For churches and employees on or considering the defined benefit plan, the following features are available:
- Retirement income stream is predetermined based on employer and employee contributions.
- During periods of market uncertainty,retirement income is stable.
- Surviving spouse will receive an ongoing income stream if pensioner dies.
- PAOC mission is supported through investments in church/ministry mortgage pool
A Specified Ontario Multi-Employer Pension Plan (SOMEPP) differs from a traditional defined benefit plan in the following primary ways:
|Traditional Defined Benefit Plan
|Number of employers
|Two or more unrelated employers contribute to the same defined benefit plan. In our case, we have over 350 individual employers (i.e., churches and ministries) that are currently contributing. This spreads the risk over multiple employers. So, if one employer should close or cease to be part of the plan, the remaining members continue to make contributions.
|There is only one contributing employer. If that employer should have difficulty or close operations, the pension plan will be adversely affected.
|A SOMEPP is required to fund a Going Concern deficit, should it occur. The likelihood that SOMEPP will require special contributions is lower than a traditional defined benefit pension plan.
|Required to fund both any Going Concern deficit and any Solvency deficit.
Defined Contribution (DC) Pension:
In conjunction with PAOC and Canada Life, BMA will consult, design, implement and monitor the PAOC DC Pension Plan. BMA Benefits is a consulting firm providing financial advising to PAOC and its members. Their services include individual financial advising for all members of the PAOC DC plan and their families, provided at no cost. Enrollment is open to all full-time employees (both credential holders and non-credential holders) of a PAOC church, ministry, or affiliate.
For churches and employees not on the defined benefit plan, the defined contribution plan offers the following:
- Lower fees than if administered by the church and/or employee.
- Offloading of administration, and liability (to BMA Benefits, a consulting firm providing financial advisory services).
- Support of PAOC mission through investments in church/ministry mortgage pool, once DC portfolio achieves critical size threshold.
- Professional personal financial advice for staff at no extra charge.