I just joined a retirement security start-up — here’s why

Note: I originally published this post to LinkedIn in October, 2016. I am re-posting now because Common Wealth is growing again and it might be interesting to potential future colleagues!

This October I joined the team at Common Wealth in Toronto. If only to help my mother better explain to my relatives, I thought I’d share a little about what drew me to Common Wealth, what I’ll be working on, and why I’m so excited to be here.

What is Common Wealth?

The shortest description of what we do is create and run pensions and retirement plans for workers who don’t have them.

Why is this important?

There is wide consensus and plenty of evidence that most of us aren’t doing a good job when it comes to our finances.

Some of the reasons why are easy to understand: Financial decision-making is complex, requiring us to think about ourselves far in the future while making real trade-offs today. Basic human nature works against us, leading us to make irrational choices based on natural biases and blind spots. It’s also often just uncomfortable to talk openly about money, and so we are prevented from acquiring the knowledge for making better decisions.

Other reasons are less well known.

The current financial and banking system is in many ways organized to extract maximum value from its customers rather than help them make good decisions or act in their best interests. Probably the best example is the popularity of actively-managed mutual funds which, heavily promoted by marketers, advisors and brokers, on average don’t do better (and often do worse) than a passive index-based approach while soaking up billions in fees. This one example points to a broader issue of trust: who has your best interests at heart?

Why pensions?

One of the best answers we’ve developed as a society to solve this problem and give ourselves financial security is the pension plan. The best ones (of which Canada boasts a world-leading number) combine risk-pooling, efficient asset management, mandatory enrolment and a few other key features that successfully help millions of people retire well.

However, unless you work in the public sector, the chances are that you can’t access some or any of these benefits.

This is partly due to the changing nature of work: pension plans are typically tied to specific employers, but today people seldom stay in one job longer than a few years — let alone an entire career. I’m in my late twenties and have already worked for four (awesome!) organizations in three different sectors. My experience isn’t unusual, and is becoming even more common.

This trend has been accompanied by a rewriting of the implicit contract between companies and workers: individual firms are less willing to bear the risk of managing retirement plans for an ageing workforce. Even when companies do offer retirement plans today, they are often based on a buffet of high-fee mutual funds that eat up much of their members’ nest eggs, and don’t stay with the worker from job to job.

Because few of us have access to a good (or any) retirement savings plan, millions of people aren’t on track to live well in retirement.

Helping these people is Common Wealth’s purpose.

How is Common Wealth approaching this problem?

We think the answer is to re-engineer collective retirement plans to better reflect the requirements of the 21st century workforce.

Rather than look at workplace retirement plans as primarily an arrangement between employers and workers, our theory is to organize such plans based on communities — like unions or industry associations or sectors of the economy — whose members share common interests and can work for mutual benefit.

We are creating and running retirement plans that adopt the best features of traditional pensions (e.g. high value-for-money in investment and administration, innovative design and members-first governance structures) while using the mobilizing and organizing power of communities to give their members access to these benefits.

To provide a concrete example, Common Wealth has partnered with the Service Employees International Union (SEIU) to launch my65+ — a retirement plan for a community of personal support workers and other modest-earning health care workers. my65+ is the first retirement plan for low- and moderate-income workers in Canada.

In plans like my65+, workers get the benefit of having an efficient way to save for retirement, employers get the benefit of caring for employees while reducing risk and administrative burden, and the SEIU Healthcare community provides a huge service to its members.

We have several similar plans in the works for other communities.

So how do I fit in?

Although much about retirement security is new to me, those who know me well won’t be surprised that I’m making this move. In fact, my career so far feels well-suited for it.

The Common Wealth team is a combination of people with extraordinarily deep industry expertise and creative leaders with cross-sector experience. I am not (yet!) a pensions expert, but I have aimed for a career that has me working on interesting problems that cut across many sectors, fields and stakeholders.

My working life started as an intern on Parliament Hill, and I have long had a strong interest in public policy. There is probably no bigger public policy issue than retirement security.

I worked for several years at the Loran Scholars Foundation — one of Canada’s leading charities — helping mobilize the talent and resources of a wide range of people and organizations to drive change. This experience will help me work with employers and leaders in the nonprofit sector in expanding access to good retirement plans.

Most recently I spent the last few years in the tech startup world with the great team atCanopy Labs, and hope to bring with me some knowledge of the traits that have enabled technology companies to drastically change the world in the last decade. Among these I would include a focus on speed-to-market and growth, taking meaningful risks and learning quickly from failure, intense collaboration, a desire to disrupt, and a focus on the end customer.

In sum: I chose to join Common Wealth because it is 1) a dynamic and creative company that is 2) solving a hugely important problem and 3) is somewhere I feel I can make a contribution.

We have a unique opportunity to make people’s lives better. I can’t think of a better place to launch the next phase of my career!