Shared-risk plans, target benefit plans—there is different terminology, but they all reflect the idea that there's flexibility not just in the contribution rate but also in the benefit formula. It's proved to be quite a popular design in the broader public sector in Canada. In fact, it's quite well known around the world, partly because of the investments they make but also because it's a very intelligent plan design.
One of the difficulties with the pure defined-benefit model, whether it's in government or anywhere, is that it tempts the participants to mentally check the box of “I'm covered” or “It's good”. They're not quite as attentive as they might be. Perhaps their representatives aren't quite as attentive as they might be to the question of how the assets and the liabilities look when you put them side by side.
What you tend to find in these jointly governed plans is much more focus on the funded status of the plan. Are we 100% funded? The Hospitals of Ontario Pension Plan is a bit better than 100% funded, and they're very proud of that. They advertise it. When they talk to their participants, when they talk to the labour management, they're successfully focusing the conversation on the promise to pay the pension benefit.
I do think that's an attractive model. I would recommend that the federal government look at it. It would cause the contribution rates to go up because we would be thinking more seriously about the assets that match the liabilities, but I think that would be a good thing all around. In fact, I talked about tone at the top. I think it would be very good for the federal government, MPs and public servants alike, who make so many of the rules that affect the rest of the population, to play by some of the same rules that the rest of the population plays by.