News Archives - October / November 2007

Friday, November 30, 2007

Letter Of Credit Amendment In Place

The government of Alberta has amended the Employment Pension Plans Regulation to allow employers to use letters of credit for solvency deficiencies in pension plans. Letters of credit ensure funds are available for a pension plan if they are needed, without requiring employers to actually deposit them into the fund. If the deficit is eliminated, the letter of credit can be cancelled. In the past, employers would contribute money to the plan to eliminate a deficiency. For more information, visit http://www.finance.alberta.ca/

Providers Manage Plan Assets

More than half, 55 per cent, of survey respondents with Defined Contribution pension plans review investment performance quarterly, says Investment Management Services, an International Foundation of Employee Benefit Plans’ survey. The survey also found that more than two-thirds, 69 per cent, of DC plans sponsors use an investment management consultant and a third of them pay service provider fees based on agreed-upon levels of performance or service.

Fraud One Cause Of Subprime Crisis

Poor underwriting and fraud are among the reasons for the deepening crisis in the U.S. subprime mortgage sector, says Fitch Ratings. It observes that residential mortgage-backed securities backed by pools of subprime mortgages continue to substantially under-perform initial expectations, which has resulted in significant ratings downgrades and heightened risk of losses to principal. Its analysis of subprime defaults suggests that lax underwriting and fraud may account for as much as one-quarter of the underperformance of the 2006 vintage of subprime transactions.

Advice Increases 401(k) Returns

Participants using an advice product in 401(k) plans earned an average three per cent higher return than those who did not, says Schwab Corporate & Retirement Services. Participants using its advice services earned an average 14.11 per cent return in 2006, compared to an 11.11 per cent average return by participants not using advice or target date funds. The follows a similar result for 2005 when those using advice programs earned an average 9.2 per cent, compared to 6.6 per cent by those who did not.

Private Equity Still Worth Considering

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Thursday, November 29, 2007

Plan Exit Strategy Before Investing

Investors putting their money outside of Canada in strategies such as private equity must plan their exit strategy before making the investment, says Jeff Trossman, a partner in the tax practice at Blakes. Speaking at its ‘Legal Issues for Pension Fund Investors in Private Equity’ seminar, he said while Canadian pension plans, for example, may be exempt from Canadian taxation, they may suffer from “tax leakage” in their investments abroad. While most developed countries do not tax capital gains earned by foreigners, they tax these gains if they derive most of their value from real property. Local reporting and withholding requirements in connection with an exit should be investigated fully upfront, he said.

Caisse Has $13.2 Billion In ABCP

The Caisse de dépôt et placement du Québec invested $13.2 billion in asset backed commercial paper (ABCP). Henri-Paul Rousseau, its chief executive, told a Quebec finance committee that Caisse officials were aware of concerns about ABCP by some ratings agencies, but it believed the banks would support the product. He said the Caisse took no undue risks, but underestimated the risk of the product. However, he noted this does happen in the investment business.

Retail Favorite Now Institutional Staple

European institutional investors and banks that long ago embraced the lucrative business of selling structured equity derivatives products into the retail market are now integrating equity derivatives into their own investment strategies as an efficient means of obtaining desired exposures, says Greenwich Associates' ‘2007 European Equity Derivatives Investors Study.’ It shows large increases in the number of European institutions and banks using equity derivatives, the number of derivatives products used by individual institutions and banks, and the volume of trades executed in these products each year.

Italy Raises Retirement Age

Italy has increased the minimum retirement age for most Italians to 58 years from 57 starting from 2008. Originally, it had proposed raising the age to 60 years.

CIGNA Has International Site

CIGNA International Expatriate Benefits (CIEB) has a new information site, dedicated exclusively to the benefits needs of international employers and their consultants. The site provides benefits managers with the opportunity to gain insight into the nuances of international benefits, news, innovations, tools, and trends. The site also offers the opportunity to explore scenarios in greater detail through a personal outreach from a member of the CIEB team.

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Wednesday, November 28, 2007

Workers Not Entitled To Surplus

Public servants, military, and RCMP personnel are not entitled surplus in their pension plans, says an Ontario Superior Court judge. Eighteen unions and pensioner groups have battled for more than 10 years over a $30 billion surplus in pension funds. In the ruling, the judge accepted the government's argument that the $30 billion is not a real ‘surplus’ of cash or assets, but is an accounting device to record or monitor the government's liabilities.

Specialized Products Become Commonplace Tools

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Tuesday, November 27, 2007

Pensions Need Protection

The Durham Region Labour Council is demanding that the government of Ontario enact a law that enshrines pension protection for workers. In a presentation to the Ontario Expert Commission on Pensions, it said with the economic reality of today, it believes that the best interests of workers and government together outweigh the interests of capital investment of wealthy individuals. To see submissions already presented to the commission, click on http://www.bpmmagazine.com

Monthly Trade Match Report Card Launched

CIBC Mellon Global Securities Services Company has launched a monthly trade match report card to help investment managers comply with new Canadian institutional trade matching guidelines contained within National Instrument (NI) 24-101. Beginning in February 2008, NI 24-101 requires investment managers to report quarterly trade matching performance to the Canadian Securities Administrators if they fail to achieve prescribed guidelines within the instrument. The guidelines are designed to lower settlement risks in the Canadian marketplace by encouraging greater trade matching rates on trade date at the Canadian Depository for Securities.

401(k) Participation Rate Doubles

Large companies had double the participation rates in their 401(k) plans, in large part because of features such as automatic enrollment, says a Diversified Investment Advisors survey. Officials at companies with 1,000 to 4,999 employees reported a 90 per cent or better participation rate in their company’s 401(k) plan for the 2006 plan year.  

Bookstaber Speaks At AIMA

Wall Street personality and author Richard Bookstaber will speak at the next AIMA Canada luncheon. Bookstaber is the author of the Wall Street tell-all book ‘A Demon of Our Own Design’ which is creating controversy and acclaim in the investment industry. The luncheon takes place Wednesday January 9, 2008 at 12:15 p.m. in Toronto, ON. For more information, visit http://www.aima-canada.org/

Great-West Sells U.S. Healthcare Business

Great-West Lifeco Inc. is selling its U.S. healthcare business to a subsidiary of CIGNA Corp. The business, Great-West Healthcare, provides medical, dental, vision, life, and disability insurance to about 5,200 employer groups and 2.2 million members in the United States. Great-West Lifeco will now be entirely focused on broadening and expanding its financial services business in the U.S.

Eldercare Challenges Examined

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Monday, November 26, 2007

ABCP Losses Passed On

Some financial institutions are choosing to pass on ABCP losses to their mutual, pooled, and segregated fund investors, says Morneau Sobeco. Greg Hurst, one of its national DC pension practice leaders, says it learned about this practice recently and is concerned about potential losses in capital accumulation plans. Until this development, it was optimistic that members of these plans would not be affected by the problems associated with ABCPs as many institutions swapped illiquid ABCP holdings into their general accounts, replacing them with cash in the institutional funds they manage.

Better Management Needed

Defined Benefit pension plans and funds in Canada’s private pension system deserve to be governed and managed in a manner that is consistent with their role as special purpose financial institutions that are dedicated solely to the financing and securing of a major portion of the retirement income needs of employees in Ontario’s workplaces, says Gordon Hall, a former partner at William M. Mercer. In a presentation to the Ontario Expert Commission on Pensions, he said failing to do so could result in a significant increase in costly litigation within the private pension system in Ontario and add to the pressure to close DB plans to new entrants and to wind-up these plans. To see submissions already presented to the commission, click on http://www.bpmmagazine.com/ontario_pension_commission.html

Steelworkers Urge Quick Passage Of Reform

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Friday, November 23, 2007

Benefit Adequacy Neglected

Benefit adequacy is often a neglected area of Defined Contribution pension plan management, says Susan Nickerson, of Hicks Morley. Speaking at its 2007 Pension and Benefits Law Update, she said that this presents legal issues for plan administrators if their plan members do not understand what they can expect from their DC plan. This risk increases if they were involved in a conversion to a DC plan. One area which they should address is encouraging employees to increase their contribution levels. She said this has a greater impact on benefit adequacy than switching from a conservative to an aggressive asset mix in a portfolio.

Canada Emerging As Islamic Finance Destination

Canada is rapidly emerging as a leading investment destination for Middle Eastern and other Muslim investors, says Andrew Fleming, of Ogilvy Renault LLP. Speaking at the KPMG Insurance Issues Conference on Islamic Finance, he said these investors are attracted by its current and forecasted budget and trade surplus, strong dollar, and favourable tax treaties with both Kuwait and the United Arab Emirates. Islamic Finance is growing rapidly around the world. It involves financial products based on the Koran and covers not only religious practices, but how Muslims should lead their lives and conduct business, said Steven Watts, of KPMG.

Brown Offers OECP Updates

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Thursday, November 22, 2007

Non-resident Trust Rules Impact Registered Plans

The federal government has introduced changes to the Income Tax Act which will restrict tax leakage from Canadian taxpayers who are avoiding tax by holding foreign portfolio investments, says a Mercer Communiqué. Under Bill C-10, tax is not payable with respect to foreign investment entities by tax-exempt entities. However, the exemption from the non-resident trust rules is not based on the status of the investor, but on the nature of the trust investment. Sponsors of Canadian registered pension plans, foundation funds, or endowment funds are encouraged to conduct a due diligence review to examine the impact the proposed provisions may have on any foreign trust investments that they may have.

Retirement Low On Tax Saving List

Canadians are as likely to spend their savings from the recently introduced federal tax cuts on paying down debt (38 per cent) as on miscellaneous spending (37 per cent), says a poll sponsored by Edward Jones. Retirement savings (13 per cent) ranked far down the list, tied with saving for a vacation/travel and investing (11 per cent).

Tickets On Sale For CPBI Ball

Tickets are now on sale for the CPBI 2008 Benefit Ball. The event, set for February 7 in Toronto, ON, raises money for the Crohn’s and Colitis Foundation of Canada. This year’s theme is Aloha Luau – evoking the Hawaiian experience with hula dancers and traditional Hawaiian music. For more information, visit http://www.cpbi-icra.ca

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Wednesday, November 21, 2007

Dollar Could Impact Economy

The rising Canadian dollar could have an impact on the Canadian economy and may even result in a slowdown, says Blake Goldring, chairman and CEO of AGF Management Limited. The featured speaker at a Canadian Club of Toronto luncheon, he said the rise of the dollar is putting pressure on the Canadian market. However, a slowdown is not necessarily a bad thing as they are only temporary and the economy would recover, stronger than ever. As well, the rise in the dollar is an opportunity for Canadians to invest aboard. Goldring believes Canadians should be investing more outside the country.

Ambachtsheer Wins International Pension Award

Keith Ambachtsheer, a world-renowned expert in pensions who is the director of the Rotman International Centre for Pension Management (ICPM) at the University of Toronto’s Rotman School of Management, has been recognized with the top Outstanding Industry Contribution Award at the 7th annual IPE European Pension Fund Awards. “I think of this as a longevity award because I got into this industry in the late 1960s. At the beginning, there were only pension bits and pieces. There was no coherence compared to where we are today,” says Ambachtsheer. Based in Toronto, Ambachtsheer has been a key figure in the global pensions arena for more than 30 years. In 2005, he helped establish the ICPM which aims to be a leading exchange of best practices in global pension management as well as a source of best ideas in pension fund legislation and regulation.

Retiring To Something

‘Retiring to Something ... Not from Something’ will be the topic at a Kitchener-Waterloo Chapter of the International Society of Certified Employee Benefit Specialists educational event. Av Lieberman, president of The Retirement Education Centre, will be the featured speaker. It takes place Tuesday, November 27, from 4 p.m. to 6 p.m. For more information, visit http://www.iscebs.org/chapters/lcregon.asp

Investor Confidence Falls In October

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Tuesday, November 20, 2007

OLRB Can Hear Claim

The Ontario Labour Relations Board is best able to deal with a claim against Genfast Manufacturing Company, says the Superior Court of Justice of Ontario. The United Steelworkers Union claims the company has more than $8 million in outstanding obligations, plus unpaid pension and benefit contributions, owed to its members. The court has lifted a stay against the OLRB hearing the case. John Varley, of Pallett Valo, says this is a very significant decision which will have a major impact on how unionized employees can claim pension and other benefit shortfalls when an employer becomes bankrupt or otherwise insolvent, leaving a plan wind-up deficiency.

Phased Retirement Rules Set Out

Proposed phased retirement rules offer an avenue for employers to keep older workers who possess expertise, knowledge, and skills that are in high demand, says a Watson Wyatt InfoFlash. The federal government draft legislation will enable Defined Benefit registered pension plans to provide qualifying employees with bridging benefits or up to 60 per cent of their accrued pension while they continue to accrue additional pension benefits on a current service basis. While there are already organizations informally accommodating phased retirement for individuals, the system is flawed. Individuals are unable to accrue any further pension benefits. By permitting the continued accrual of a DB pension while allowing for receipt of a portion of the unreduced pension, the proposed measures will reduce the likelihood of this loss of income.

Meet The Plan Sponsor Returns

John Formusa, of Hydro One; John Poos, of Nortel; and Terri Troy, of the Halifax Regional Municipality; will be among the plan sponsors on hand at the AIMSE 15th Annual Canadian Conference. Once again, it will feature the ‘Meet the Plan Sponsor’ roundtable giving attendees a chance to hear their issue first hand. It takes place January 18, 2008, in Toronto, ON. For more information, visit http://magnetmail.net/

The New World Of Treasury Examined

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Monday, November 19, 2007

Employees Ill-prepared For Future

Employees globally are not properly planning for their financial futures, says the MetLife Study of International Employee Benefits Trends. The study found 62 per cent of employees surveyed in Mexico, 58 per cent in Australia, 40 per cent in the U.S., 22 per cent in the U.K., and seven per cent in India have not taken steps to determine their household's life insurance needs. Employees in these countries also seem to be putting retirement and aging related issues on the back-burner. Fewer than half of employees in say they have taken retirement planning steps.

Report Provides Insights Into Changing Nature Of Insurance Industry

State Street Corporation has released The State Street Vision Report on the insurance industry as part of its series of proprietary reports designed to help financial services professionals enhance their knowledge of key themes and trends affecting their industry. The report analyzes how these changes are driving the growth of third-party outsourcing in the industry and discusses new opportunities across all segments of the insurance business.

Islamic Finance Discussed

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Friday, November 16, 2007

Waive Waiting Period When Recruiting

Offering a benefits program with automatic sign-in and no waiting period can be an effective strategy to attract new talent to an organization, says Steven Osiel, vice-president, total rewards, Pal Benefits Inc. Speaking at its 2007 Conference, ‘Total Rewards and Compensation – What You Need to Know,’ he said since most organizations offer benefits, effective recruiters need to consider creating programs where the new employees feel like they are in a partnership with their employer. As well, companies need to know the characteristics of the group where they are recruiting to determine the most appropriate benefits package.

Stakeholders Must Make Concessions

Improvements to Ontario’s pension system will require concessions by all stakeholders, says Watson Wyatt in its submission to the Ontario Expert Pension Commission. While it recognizes that an effective solution will be one which enhances the pension system for all stakeholders – pensioners, employees, and plan sponsors. However, it also said that the government of Ontario is concerned with the financial risks associated with the PBGF, the operational effectiveness of the Financial Services Commission of Ontario, and the role of the private pension system in ensuring income security for Ontario seniors. To see submissions already presented to the commission, click on http://www.bpmmagazine.com/ontario_pension_commission.html

Life Cycle Publication Furthers Discussion

The Research Foundation of CFA Institute has released a collection of speeches, papers, and discussions on life cycle finance theory and practice, consumers’ need to make rational investment and savings choices, employers’ and governments’ roles in supporting rational decision-making, and future life cycle products and services. ‘The Future of Life Cycle Savings and Investing’ is the result of an inaugural conference co-sponsored by Boston University School of Management, the Federal Reserve Bank of Boston’s Research Center for Behavioral Economics and Decisions-Making, and the Research Foundation of CFA Institute.

AARP To Present Study

AARP will present its global study of the business case for Workers 50+ and Alberta Minister Iris Evans will speak on a report from Alberta and B.C. on ‘Understanding the Issues and Opportunities, Laying the Groundwork for a Mature Workforce Strategy’ at the 3rd Annual Summit on the Mature Workforce. It takes place November 21 in Toronto, ON. For more information, visit http://www.workplaceinstitute.org/

Pension Class Actions Examined

How to avoid being outclassed in pension class actions and protecting an organization when communicating pension benefits will be among the topics covered at ‘Pension Law and Litigation.’ The Federated Press event takes place December 11 and 12. For more information, visit http://www.federatedpress.com/PDF/PLLT0712-E.pdf

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Thursday, November 15, 2007

Auto Enrollment Problematic

Canadian plan sponsors will find it harder to withdraw pension contributions for their employees automatically than their counterparts in the U.S., says Diana Woodhead, of Blakes. Speaking at its ‘Recent Developments in Pension & Employee Benefits’ seminar, she said in order to do so, they must get employee authorization in every province except Quebec. Employee authorization is not required in Quebec if membership in a plan is mandatory. She suggests that employers consider revising enrollment forms for future plan members and consider the best method to obtain authorizations from existing members.

Portable Alpha ‘Voodoo Science’

For most pension plan sponsors, concepts such as hedge funds and portable alpha are “voodoo science,” says John Davies, of the Carpentry Workers’ Pension and Benefit Plans of B.C. Speaking at AIMA Canada’s luncheon on portable alpha, he said providers need to spend time educating their clients on these topics. People will not buy what they do not understand, he said, and plan sponsors do not understand these products.

Second-tier DB Plan Needed

The Municipal Retirees Organization of Ontario (MROO) supports the idea of ‘a lean, second-tier, universal, portable, Defined Benefit plan for all Ontario (and indeed Canadian) workers.’ In a submission to the Ontario Expert Pension Committee, it says there is growing need for new options for encouraging DB plans, particularly for mobile workers and for employees of smaller, more volatile, employers who are least able to manage a pension fund. To see submissions already presented to the commission, click on http://www.bpmmagazine.com/ontario_pension_commission.html

Unlocking Scheme Warning Issued

Alberta’s superintendent of pensions has issued a warning about a potentially illegal unlocking scheme. It has been advised of a scheme in which locked-in accounts (LIRAs or LIFs) are split and amounts are transferred from one financial institution to one or more institutions for the purpose of unlocking. The newly established locked-in account(s) and, possibly, the original locked-in account, each fall below the small amounts prescribed by the Employment Pension Plans Act. There are two techniques being used, a complete transfer and a partial transfer. However, legislation prohibits these sorts of schemes.

CanDeal Trading Up

CanDeal had a 218 per cent increase in the number of trades executed on its Canadian Money Market (CAMM) trading platform in the second half of its fiscal year, ended October 31, 2007.  “This rapid growth of trades is consistent with the U.S. and European experience and the widespread adoption of online trading in money markets, globally,” says Shirley Gallant, managing director. CAMM allows domestic and international institutional investors and treasury managers to sort, filter, and view multiple dealer offerings of Canadian money market instruments in a single commingled display. 

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Wednesday, November 14, 2007

Mark-to-market An Illusion

The beauty, precision, and discipline of mark-to-market accounting has been shown to be an illusion when the assets being valued are opaque, non-standard, and illiquid, says Christopher T. Mahoney, vice-chairman, Moody's Investors Service. Speaking on ‘The Credit Crisis: A Status Report’ at a CIBC Mellon luncheon session, he said the current crisis resulted from leveraged holders of leveraged products creating a dangerous mix in which prices were bid up to unnatural levels during the levering up phase and then driven unnaturally down during the delivering phase. However, he said the industry will get through the current crisis and, while it may have an impact on earnings, it is unlikely to create any systemic instability.

Active Measures Can Reduce Claims

Today’s companies are facing issues in absenteeism, reduced productivity, and more Workplace Safety and Insurance Board (WSIB) claims. In Ontario alone, there were more than 260,000 WSIB claims in 2006, a challenge being taken on by a leading pain treatment and prevention clinic. MMTR Health Inc. has found a simple and cost-effective way for businesses to effectively reduce the number of these claims. Its proprietary approach combines deep relaxation with specific muscle exercises on-site so employees quickly learn how to identify the root of a problem with no travel or lost time from work.

Venture Capital Investment Up

Investment activity in Canada's venture capital industry increased on both a year-over-year and quarter-over-quarter basis in the third quarter of 2007, says the CVCA's quarterly statistical report. In total, $512 million was disbursed across the country, up 17 per cent from the total of $438 million invested in the prior quarter, and up 47 per cent from the $347 million disbursed in the same period in 2006. "The growth in venture capital investment is being driven by an increasing focus on Canadian transactions by U.S. venture firms," says Rick Nathan, CVCA president and managing director of Kensington Capital Partners.

SEAMARK Opts For RBC Dexia

RBC Dexia Investor Services has been selected by SEAMARK Asset Management Ltd. to provide a full range of investor services including custody, fund administration, recordkeeping, foreign exchange, and securities lending for that company's newly-launched family of mutual funds.

NAFE Held In Las Vegas

The National Institute Of Pension Administrators will celebrate its 25th anniversary at the 2008 NIPA Annual Forum & Expo May 5 to 7 in Las Vegas, NV. Designed by retirement plan professionals, sessions will examine cash balance plans, Defined Contribution plan design, and valuation of alternative investments. For more information, visit http://www.nipa.org/

Desjardins Launches Helios

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Tuesday, November 13, 2007

Teachers' Invests In Railpower

Ontario Teachers' Pension Plan Board has subscribed for a convertible debenture in the principal amount of $35 million to be offered by way of a private placement by Railpower Technologies Corp. The private placement is expected to close in early January 2008. Railpower Technologies Corp. sells specialized energy technology systems for transportation and power generation. 

DC/Hybrid Most Common

Market volatility, increasing costs, and stricter accounting guidelines have helped make Defined Contribution and hybrid pension plans the most common retirement plans for employers around the world, says a Mercer report. The trend is particularly marked in newer pension markets, such as Australia, where 90 per cent of all pension fund sponsors offered DC plans. Similarly, Brazil, China, Russia, New Zealand, and South Africa also are dominated by DC. Defined Benefit plans still dominate in Japan and the Netherlands.

FTSE Creating Screened Indexes

FTSE Group and Conflict Securities Advisory Group, a research provider specializing in terror-free investment screening and certification services, have signed an agreement to create a series of screened indexes. The FTSE CSAG Terror-Free Index Series, scheduled to be released in 2008, has been devised in response to U.S. regulatory requirements on divestment from Iran , Sudan , Syria , and North Korea . It will assist U.S. pension plans to meet their fiduciary duty in complying with the new legislation.  

Toronto Hosts First FORUM

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Monday, November 12, 2007

CPP Passes $121 Billion

The Canada Pension Plan Fund grew to $121.3 billion at the end of the July-September quarter, gaining $800 million over the prior quarter. The increase came from inflows of contributions not needed to pay current pension benefits, while investments posted a loss of $56 million on the recent volatility in financial markets generally and the negative impact of the strengthening Canadian dollar on foreign investment returns. The CPP fund has grown $4.7 billion for the first six months of the fiscal year.

ETFs Close In On $2 Trillion

ETF assets are on track worldwide to reach $2 trillion by 2011, says Morgan Stanley. Assets invested in ETFs grew by 31.8 per cent to $745.4 billion globally in the nine months ended September 30, with more than 2,200 institutional investors having used one or more of the funds.

Carbon Emissions Opportunities Discussed

Local and international strategies to manage risk and maximize profit will be examined at The Canadian Institute’s ‘Seizing The Investment & Compliance Opportunities of Carbon Emissions’ session. Attendees can get clarity on Canada’s regulatory framework for greenhouse gas emissions and strategize to develop and profit from green mutual funds. It takes place January 15 and 16 in Toronto, ON. For more information, visit http://www.canadianinstitute.com/

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Friday, November 9, 2007

Industrial Alliance Assisted Enrollment Program Earns Award

‘The All about you!’ assisted enrollment program, developed by Industrial Alliance Insurance and Financial Services, has won an award of excellence in the Integrated Campaigns category of the 2007 Insurance & Financial Communicators Association contest. Through the program, participants in group retirement plans can plan their retirement in three easy steps – either online through a secure website or in writing using an education kit. "This award recognizes our constant concern to provide participants in our retirement plans with clear, easy to use documentation for all our products," says Lucie Lachance, director, actuarial and marketing services, group pensions.

Letter Of Credit Regulations Coming

Alberta could have its regulations for letter of credit funding ready by the end of November, says Christopher Brown, of the Calgary office of Osler. Speaking at its Pensions & Benefits Update 2007, he said it could have two key differences from the letter of credit regulations in Quebec and for the federal government. Alberta would make it a permanent funding option and there would no limit on the portion of pension solvency deficiency that could be secured by letter of credit.

RRSP Contributions Rise Again

The number of tax filers making contributions to registered retirement savings plans (RRSPs), and the amount contributed both increased for the third consecutive year in 2006, says Statistics Canada. Just under 6.2 million tax filers contributed to an RRSP in 2006, an increase of 60,000 or one per cent from 2005. Contributions rose 5.8 per cent from 2005 to $32.4 billion, the highest amount ever reported. 

Wellness Demystified

Legal Guide To Breakdown Entitlements

Osgoode Professional Development’s ‘Pension and Benefit Entitlements Upon Marriage Breakdown: The Legal Guide’ will take place January 15 in Toronto, ON. Topics include steps to take to get your pension division right the first time and what to look for in pension valuators and what to do with their reports. For more information, visit http://www.osgoodepd.ca/

GIPS Committee Against Mandatory Verification

The GIPS Executive Committee, the decision-making body for the Global Investment Performance Standards, will not recommend mandatory verification for GIPS-compliant firms. It has decided to propose a change in the current GIPS compliance statement to include an explicit disclosure of whether or not the firm has been verified. This proposal will be included as part of the GIPS 2010 Exposure Draft. The committee continues to strongly encourage firms to be verified, but does not consider it appropriate to require verification.

Investment Outlook Comes To Waterloo

‘The Road Ahead – Investment Outlook 2008’ takes place November 22 in Waterloo, ON. The 2008 outlook will cover topics including U.S. politics and influence on the market and expected sector performance and possible rotations among sectors. Robert (Bob) Gorman, chief portfolio strategist, TD Waterhouse Canada Inc., is the guest speaker. For more information, visit www.torontocfa.ca

U.S. Plan Participation Drops

Participation in employment-based U.S. retirement plans fell about two percentage points in 2006 among workers with the strongest connection to the work force, says a study by the Employee Benefit Research Institute. In 2006, participation in employment-based retirement plans fell to 53 per cent among full-time, full-year wage and salary workers – those considered to have the closest connection with the work force. This was down from 55 per cent in 2005

Environmental Economy Examined

Andrew Heintzman, president, Investeco Capital Corp., and Greg Payne, portfolio manager, Investeco Global Environmental Sectors Fund, will make a presentation entitled ‘Mobilizing Capital for the Environmental Economy’ in the next session of the Rotman School of Management, University of Toronto, Business of Green Speaker Series @ Rotman. The focus of the series is strategy lessons learned from corporations who have implemented green initiatives. Investeco is a private equity investment firm which invests in private companies specializing in alternative power, water technologies, organic and natural foods, and environmental technologies. It takes place November 21 in Toronto, ON. For more information, visit www.rotman.utoronto.ca/events

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Thursday, November 8, 2007

Canadian Sponsors Committed To DB

Not only are Canadian plan sponsors committed to offering DB plans, they are actively seeking new ways to generate returns for their plan members including moving out of Canadian equities and embracing alternative investment strategies including long/short products such as 130/30, says research from Pyramis Global Advisors. ‘Exploring New Ground: Key Global Pension Strategies for Today's Investment Landscape’ shows that Canadian DB pension funds are well-funded, solvent, and maintaining the retirement benefits for their members. A clear majority (87 per cent) of open plans indicate that they are likely to continue to offer a DB plan in the next five to 10 years. 

RIM Settles With Pension Fund

Blackberry maker Research In Motion Ltd. (RIM) has reached a settlement with a pension fund suit regarding stock options practices at the firm. As part of the settlement with the Ironworkers Ontario Pension Fund, RIM's co-chief executive officers Jim Balsillie and Mike Lazaridis will each pay $2.5-million to RIM to help with its legal costs. As well, it has also agreed to beef up its corporate governance procedures, including not giving stock options to independent directors.

Employees Endorse Automatic Enrollment

Employees are nearly unanimous in their support of being automatically enrolled in their companies' 401(k) plans, says a study on behalf of Retirement Made Simpler (RMS), a coalition formed by AARP, the Financial Industry Regulatory Authority (FINRA), and the Retirement Security Project (RSP) to improve the way Americans save for retirement. The found that 98 per cent of U.S. adults currently enrolled in an automatic 401(k) plan agree they are glad their companies offer this savings vehicle. Of those who were automatically enrolled, only seven per cent opted-out of the plan.

Ark Chooses RBC Dexia

RBC Dexia Investor Services has been selected by Ark Fund Management Limited to provide a full range of investor services including custody, investment finance, valuations, and unitholder recordkeeping for the company's entire family of hedge and mutual funds. Ark Fund Management is one of the newest companies on the Canadian asset management landscape, having acquired the assets of SciVest Alternative Strategies Inc. in August 2007.

Employers Offer Incentives For Healthy Behaviour

With continuing pressure to control healthcare costs, more U.S. companies plan to offer financial incentives to reward workers who adopt healthy lifestyles, says a survey by Watson Wyatt and the National Business Group on Health. Nearly half (46 per cent) of employers surveyed currently offer financial incentives to encourage workers to monitor and improve their health or plan to offer incentives next year. By 2009, that number is expected to surpass 70 per cent. The survey found that companies with effective health and productivity programs demonstrate superior performance. They achieve 20 per cent more revenue per employee, have 16.1 per cent higher market value, and deliver 57 per cent higher shareholder returns.

Hillsdale Launches Equity Strategy

Hillsdale Investment Management has launched a Canadian Completion Equity strategy benchmarked to the recently introduced S&P/TSX completion index. This active long-only strategy was developed specifically for institutional investors seeking an additional source of alpha in the Canadian small-mid cap universe to complement their large cap exposure.

Utilizing Diversity Examined

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Wednesday, November 7, 2007

Boomers Changing Face Of Retirement

The current habits, lifestyles, and attitudes among baby boomers have put the traditional ‘all play and no work’ retirement mentality on the verge of extinction, says a study by Desjardins Financial Security. It found one in 10 of today’s retirees continue to work and 54 per cent of workers aged 40 and older are planning a gradual retirement. When asked about their ideal retirement age, university-educated workers are more likely to envision working past age 65 – at least five years longer than the ‘ideal’ retirement age of other actively employed respondents.

Assets Keep Pace

Asset values at U.S. Defined Benefit pension plans kept pace with rising liabilities in October, says BNY Mellon Asset Management’s Pension Liability Indexes. It shows the assets of a moderate risk pension portfolio increased 1.7 per cent in October, a result of rising equity markets in the U.S. and around the world. This matches a similar increase in plan liabilities.

Portable Alpha Subject Of Discussion

A panel discussion on one of the most misunderstood and timely topics in investment management – Portable Alpha – will be the feature of an AIMA Canada fall luncheon, November 14 in Toronto, ON. The panel will consist of Angelo Calvello, of Man Investments Inc.; Brian Erickson, of Morgan Stanley Investment Management; Paul Robson, of Northwater Capital Management; and John Davies, of the Carpentry Workers’ Pension and Benefit Plans of B.C. For more information, visit http://www.aima-canada.org/

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Tuesday, November 6, 2007

bfinance Expands Canadian Operations

bfinance, an international investment consultant specializing in investment manager search and review, is opening a Toronto, ON, office. It currently has an office in Montreal, QC, which opened in the fall of 2005. In the last year, it conducted 80 searches representing assets under management of $18 billion of which $3 billion was for Canadian clients.

Maple Bond Market Booming

While the Maple bond market benefits both the investor and the issuer, the market still has some regulatory and cost impediments to overcome, says the Investment Industry Association of Canada’s ‘Made in Canada: The Maple Bond Market.’ It says the expected value of Maple bonds to be issued in 2007 exceeds $40 billion – about 50 per cent of all non-government issuance. As the selection of Maples increases, the IIAC says it expects to see added holdings in pension plans, which will share the diversification and other benefits with their plan participants.

Advisors Must Address Probability Of Survival

While Defined Benefit pension plans provide the best hedge against longevity risk, investment advisors may have to get used to helping clients deal with this risk in other ways, says Dr. Moshe Milevsky. The associate professor of finance at the Schulich School of Business, York University, told the Mindpath Financial Conferences’ 'The Coming Retirement Income Crisis – The New Retirement Income Paradigm: What Every Advisor Needs to Know To Protect Their Clients Future and Avoid the Hidden Risks' event that with the life span of Canadians increasing, they need to stop talking to their clients about life expectancy and instead focus on the probability of survival. Statistics show that the older one gets, the greater the likelihood that they will live longer and potentially outlive their retirement assets.

Health Survey Discussed

The sanofi-aventis Healthcare Survey 2007 will be examined November 22 at a Manitoba CPBI Council breakfast seminar. Chris Bonnett, of H3 Consulting, will be the featured speaker. He is on the advisory board of the sanofi-aventis Healthcare Survey and has been the principal author of the report for the last three years. It takes place in Winnipeg, MB. For more information, eMail daled@mts.net

CIBC Mellon Awarded Mandate

CIBC Mellon Global Securities Services has been appointed by McLean & Partners Wealth Management Ltd. to act as the company's asset servicing provider for three new private global pooled funds, which were recently launched in Canada. Brent McLean, president and chief executive officer of McLean & Partners, says "With our new products, it was important for us to work with a partner who shares our emphasis on client service and has global scale, size, and reach."

Accessing Effective Drug Therapies

How employers can access effective drug therapies for their employees during a pandemic will be the focus of the next Connex Health seminar. The presenters for the morning will address the importance of preparing for a pandemic, which experts predict is overdue based on historic trends. It takes place November 23 in Burlington, ON. For more information, visit www.connexhc.com

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Monday, November 5, 2007

Governance Focus Of Day

The expansive issue of pension plan, benefits, and investment governance will be the focus of a CPBI Atlantic Region session November 22. ‘Governance Day’ will bring together speakers such as John Ilkiw, senior vice-president, portfolio design and risk management, for the Canada Pension Plan Investment Board; and Len Racioppo, president of Jarislowsky Fraser. It is taking place in Halifax, NS. For more information, call (902) 835-0391 or eMail cpbiatlantic@eastlink.ca

More Than One Way To Implement LDI

Liability driven investment (LDI) does not necessarily imply a major overhaul of a portfolio and it can be implemented in more than one way, says an ABN AMRO Asset Management – Canada Institutional Newsletter. It describes LDI as a risk management framework for implementing asset/liability management. Beyond interest rate hedging, LDI also incorporates strategic asset allocation and risk budgeting, portfolio construction, and ongoing risk monitoring and reporting. In addition, it can provide a framework for incorporating appropriate active management into a portfolio.

BMO Purchasing Pyrford

In response to increasing interest from institutional and retail investors for international investment opportunities, BMO Financial Group has signed an agreement to purchase Pyrford International plc, a London, UK-based institutional asset manager. Pyrford has been providing international asset management services for pension funds, charities, endowments, foundations, and high net worth individuals since 1987. It had approximately $3 billion assets under management as of September 30 and client relationships in Canada, the United States, UK, Europe, and the Middle East.

CIBC Sells Part Of World Markets

CIBC will sell its U.S. domestic investment banking, equities, leveraged finance, and related debt capital markets businesses to Oppenheimer Holdings Inc. The transaction also includes CIBC's Israeli investment banking and equities business, and certain parts of other U.S. capital markets-related businesses located in the UK and Asia. CIBC will retain its other U.S. wholesale businesses which include real estate finance, equity and commodity structured products, merchant banking, and oil and gas advisory, as well as the balance of its U.S. debt capital markets, Asia, and U.K businesses.

Monthly Update Of Pension Plan Commuted Value Interest Rate Assumptions

The interest assumptions required to calculate commuted values for an event which occurs in any month up to and including December 2007 are now available at www.an-actual-actuary.com. An Excel spreadsheet on the website contains six worksheets

• Commuted Values - 2005 Basis
• Commuted Values - 1993 Basis
• Marital Breakdown - CSOP 4300 - March 2003
• Marital Breakdown - CSOP 4300 - March 2003 - ALTERNATE
• Annuity Proxy for Solvency Calculations for Non-Indexed Pensions
• Minimum Interest on Employee Required Contributions (including the 12 month average rates)

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Friday, November 2, 2007

CIA Suggests Pension Security Trust

The Canadian Institute of Actuaries (CIA) would permit the use of a Pension Security Trust that would be separate from, but complementary to, regular Defined Benefit pension plan funds. In a submission to the Ontario Expert Commission on Pensions, it said plan sponsors could use the trust to increase funding levels and enhance benefit security for plan members. But if contributions were subsequently found not to be needed to fund benefits, they could be released back to the plan sponsor. The institute also called for adjustments in pension plan designs and workplace policies to adapt to the realities that plan members and retirees are working past age 65 and living longer. To see submissions already presented to the commission, click on http://www.bpmmagazine.com/ontario_pension_commission.html

National Perspective Taken On Mental Health In Workplace

A session on mental health in the workplace will be held December 6 in Toronto, ON.  The Group Insurance and Pharmaceutical Committee (GIPC) session will look at mental health from the top down, beginning with the national perspective and the newly-formed Canadian Mental Health Commission. Speakers will share perspectives on issues and opportunities relating to mental health including best practices to improve employee outcomes and manage costs. Keynote speaker is Dr. David Goldbloom, professor of psychiatry at the University of Toronto. For more information, visit www.gipc.ca

Top Employers Walk the Talk

Cisco Canada has the most family friendly workplace and Flight Centre Canada offers the best recognition practices, says Market Yourself Smarter’s second annual Walk the Talk survey. Employees also selected Export Development Canada as most committed to employee development; Brain Injury Services of Hamilton, Haldimand-Norfolk, Niagara for best employee engagement; Rocky Mountaineer Vacations as having the best workplace culture; and the University College of the Fraser Valley as the most open and transparent workplace.

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Thursday, November 1, 2007

Benefits For A Changing Demographic Discussed

The Canadian Pension & Benefits Institute Ontario region held a breakfast seminar, ‘The Role of Benefits in the Attraction and Retention of the Changing Demographic.’ Jennifer Hubbard, of The Economical Insurance Group; and John Tompkins, of Hewitt Associates; lead the session and discussed how to retain an aging workforce, develop benefit plans for an evolving demographic, and how to appropriately train staff with high rates of turnover.

Russell Launches Core Plus Fixed Income Pool

Russell Investments Canada has launched the Russell Core Plus Fixed Income Pool. Designed to give investors greater diversification in their portfolios, it also seeks to provide higher return potential than a typical fixed income fund. Features include increased diversification as a result of a wider opportunity set, lower associated correlations relative to traditional fixed income strategies, and less reliance on duration.

Minimum Solvency Rules Need Revision

Providing plan members with better protection against benefit loss on insolvent plan termination by revising the minimum solvency funding standards, and rebalancing the financial risks and rewards of plan sponsorship by providing sponsoring employers with access to funding surplus could help make the Defined Benefit single-employer pension system stronger and sustainable, says Mercer. In its submission to the Ontario Expert Pension Commission, it says these two measures must be implemented together as this is the only way that the recommended changes will be effective. To see submissions already presented to the commission, click on http://www.bpmmagazine.com/

Physicians Ignore Generics 

Canadian physicians are generally oblivious to drug prices and often prescribe an expensive brand-name medicine even if a generic version is available, says Eckler Group News October 2007. It says drug sales data collected monthly by the IMS Health Consulting Inc., a provider of business intelligence and strategic consulting services for the pharmaceutical and healthcare industries, concludes that drug costs in Canada could be significantly decreased if doctors made a concerted effort to pay more attention to the cost of the medications they prescribe.

MedCan Offers Pharmacogenomic Testing

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Wednesday, October 31, 2007

Cost Rising Once More

The trend factors used by insurers for programs renewing in 2008 have not changed from the factors of a year ago, says Eckler Group News October 2007. The annual trend factors depend on plan design and its survey suggests that the range is currently 13 per cent to 17 per cent per annum for healthcare and five per cent to nine per cent per annum for dental care. If an organization has a demonstrated lower credible annual trend, this could be taken into account in setting renewal rates.

Compensation Outlook Featured Forecasts

The Conference Board of Canada’s ‘2007 Compensation Outlook: Alignment, Communication, and Engagement’ featured in-depth research and case studies on Canadian HR strategies. Sponsored by Watson Wyatt Worldwide, the conference outlined how to align benefits with business strategies and presented the latest compensation trends and practices.

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Tuesday, October 30, 2007

Half Offer DC Plan

About 51.4 per cent of Canadian respondents now offer Defined Contribution pension plans, says the International Foundation of Employee Benefit Plans’ ‘Employee Benefits Survey: U.S. and Canada 2007.’ The most popular DC plans are registered DC or money purchase plans, offered by 70.3 per cent of respondents. The second most common is the group registered retirement savings plan, offered by 54.1 per cent. “More than half of all Canadian respondents offer at least one capital accumulation plan. This is quite common in corporations and professional service firms, with more than 60 per cent of employers in these sectors offering them,” says Julie Stich, senior information/research specialist at the International Foundation. “While CAPs are offered by public employers and multi-employer funds, they’re more likely to offer some type of Defined Benefit pension plan.”

CPP On Financially Sustainable Footing

The Canada Pension Plan (CPP) is on a financially sustainable footing for at least the next 75 years, says the 23rd Actuarial Report on the plan. The report will offer an important point of reference for federal and provincial finance ministers as they begin their statutory three-year review of the plan in 2008. The report will also be examined by a panel of three independent actuaries, who will report publicly on their findings in advance of the federal-provincial review process. To see the report, visit http://www.osfi-bsif.gc.ca/

Single Sign-On CIPA Finalist

Sun Life Financial’s Single Sign-On offering has been shortlisted as a finalist in this year’s Canadian Information Productivity Awards (CIPA) program. Single Sign-On provides group plan members with secure access to their benefit and retirement plans directly from their employee portal. While on their employer’s site, members can simply click on a link to access their benefits and pension plan Personal Portfolio Home Page without having to enter their access ID or password.

CFA Looks At Clean Energy

Which alternative energy technologies are currently being commercialized, what is the market potential and limitations, how commodities are being impacted, and how you can participate in the growth of these private and public companies are some of the areas which will be examined at the Toronto CFA Society ‘Clean Energy Conference 2007 – Investment Perspectives in Clean Energy.’ Designed for equity analysts, portfolio managers, investors, and investment bankers, it takes place at 8 a.m., November 14, in Toronto, ON. For more information, visit http://www.torontocfa.ca/

Hedge Funds Battle Child Abuse

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Monday, October 29, 2007

Pension Leaders Share Views

The agenda for pension plan investment committees for 2008 and the evolving issues for Defined Benefit and Defined Contribution pension plans will be among the topics covered at the CPBI Ontario Region’s ‘3rd Annual Pension Investment Forecast.’ Leaders from among the country’s most influential pension plans – including Philip Falls, president and chief executive officer, UBCIMANT; and Lucy Paglione, senior vice-president, pension and benefits, George Weston Limited/Loblaw Companies Limited; will share their views and ideas on the challenges and issues facing them in the months to come. It takes place January 15, 2008, in Toronto, ON. For more information, visit http://www.cpbi-icra.ca/

Tool Transforms HR

Mercer has released an upgraded version of its measurement and diagnostic tool ─ Operations Scanner. First released more than nine years ago as an activity-based survey collecting quantitative data on more than 300 HR activities, it evaluated the time and resources spent by HR in order to identify areas of cost savings. The new Web version provides data indicating, among other things, how an HR organization allocates both its labour and non-labour resources.

PIAC Offers Comments

Expert and professional bodies should have a means to be regularly consulted on legislative and regulatory change, says the Pension Investment Association of Canada (PIAC). In a submission to the Ontario Expert Commission on Pensions, PIAC said this would be an appropriate regulatory role for expert and professional bodies in the Ontario pension system. To see submissions already presented to the commission, click on http://www.bpmmagazine.com

CPPIB In Puget Consortium

The Canada Pension Plan Investment Board (CPPIB) has joined a consortium of long-term infrastructure investors in Puget Energy, a regulated utility providing electric and natural gas service in Washington state. The consortium also includes Macquarie Infrastructure Partners, British Columbia Investment Management Corporation, and Alberta Investment Management.

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Friday, October 26, 2007

Pension Asset Growth To Slow

While pension assets in Canada will grow to $1.4 trillion from the current $994 billion by 2016, their growth will be only to four per cent compared to the 11.2 per cent growth rate for individual assets during the same period, says Earl Bederman, president of Investor Economics. Speaking at the ICAC 2007 Conference & Annual General Meeting, ‘Future Trends of the Canadian Asset Management Industry Within A Global Environment,’ he said money is already coming out of the pension side, but this is obscured by the markets. However, demographics indicate that this will continue and the pension sector will grow much slower than it has in the past.

Report Debunks Responsible Investing Myths

A UN report is debunking the myth that investors acting responsibly have to sacrifice investment performance in the process, says John M. Clancy, managing director at Guardian Ethical Management Inc. He says the report, ‘Demystifying Responsible Investment Performance,’ was developed by the United Nations and a group of leading asset managers from around the world. It explores links between different approaches to responsible investment and investment performance. To read the report, visit http://www.unepfi.org

Growth Dominates Value

Only nine per cent of value managers beat the S&P/TSX Composite return in the third quarter. In contrast, 75 per cent of growth managers outperformed the benchmark, says the Russell Active Manager Report. This is the poorest performance by value managers since the first quarter of 2000. What made it tough for value managers was that, on average, they were more than one per cent underweight the top-performing Information Technology sector. In contrast, growth managers were roughly three per cent overweight.  In addition, value managers had notably larger underweights to the strong performing Materials sector.

IFRS Deadline Concerns FEI

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Thursday, October 25, 2007

Funded Status Improving

Better-than-expected asset returns, low liability growth rates, and increased contributions helped to close the gap between plan assets and liabilities, improving the pension funding status of S&P TSX Composite Index companies in 2006, says a report from Mercer. For 2006, the median actual return was 11 per cent, compared to the median expected return of seven per cent. “With interest rates picking up between 25 and 50 basis points midway through 2007, plan sponsors may soon reach the point where legacy costs are fully funded,” says Paul Forestell, leader, retirement professional group at Mercer.

ITG Expands Cross-Border Trading

Investment Technology Group, Inc., a provider of technology-based trading services and transaction research, has added pan-Atlantic electronic trading capabilities to its Triton execution management system, enabling clients in North America and Europe to trade U.S., Canadian, and European stocks from one platform. The pan-Atlantic enhancements improve workflow efficiencies by allowing desks located in New York and London, for example, to share, manage, and trade the same lists in real time.

Investors Optimistic About New Rules

A majority of European institutional investors believe that new financial market rules scheduled to take effect next month have a good chance of achieving regulators' stated goals of increasing market transparency and further integrating Europe's capital markets, says research from Greenwich Associates. The Markets in Financial Instruments Directive (MiFID), which will take effect on November 1, 2007, will introduce significant changes to Europe's regulatory framework with the goal of integrating Europe's national markets. Included in the directives are new pre- and post-trade transparency requirements and reporting requirements for equity markets, new capital requirements, and other provisions intended to facilitate cross-border business.

Low Back Pain Alleviated By Naturopathic Medicine

The treatment of low back pain with naturopathic medicine can mitigate workplace absenteeism, low productivity, and other health-related costs, says a study by the Canada Post Corporation, the Canadian Union of Postal Workers, and the Canadian College of Naturopathic Medicine. The study demonstrated that a group receiving naturopathic care had clinically and statistically significant positive results including improved physical functioning, decreased disability, significant pain reduction, improved spine flexibility, dramatic reduction in the use of over-the-counter medications/painkillers, and improved quality of life including increased energy and vitality.

Communications On Agenda

Are your employees getting the right information they need in order to appreciate the unique features of your total compensation package? The 7th Annual Communicating Compensation and Benefits will discuss the best practices in communicating with employees about compensation, pension, and benefit plans, including the proper way to communicate the introduction of a flexible benefits plan. The Federated Press event takes place December 17 to 19 in Toronto, ON. For more information, eMail info@federatedpress.com

Nairne Speaks At Conference

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Wednesday, October 24, 2007

DB Becoming Unsustainable

Pension legislation reform is urgently needed in Ontario to enable employers to improve their competitiveness, while giving employees a predictable retirement income, says the Ontario Chamber of Commerce. However, in a submission to the Ontario Expert Commission on Pensions, the chamber said that Defined Benefit pension plans are quickly becoming unsustainable because current funding rules as unduly burdensome on employers. It has recommended that the Ontario government amend the pension legislation to relax solvency funding requirements by establishing a normalized interest rate of 6.5 per cent and extending the amortization period to 15 years as well as allow businesses running DB plans access to funding excesses. To see submissions already presented to the commission, click on http://www.bpmmagazine.com/

Funded Ratios At Five Year High

Despite recent volatility in capital markets, pension funded ratios have reached their highest levels in more than five years, says an analysis by Watson Wyatt Worldwide. The funded ratio (the ratio of plan assets to plan liabilities) of the typical pension plan climbed to 105 per cent at the end of September 2007, on a Generally Accepted Accounting Principles (GAAP) basis. The funded ratio of the typical plan is up from 89 per cent at the end of September 2006. Whereas the improvement in 2006 was driven by a combination of strong investment returns and rising interest rates, the improvement in 2007 has been driven primarily by higher interest rates.

Canadians Replace 50 Per Cent Of Income

Canadian households are on track to replace only 50 per cent of their pre-retirement income in retirement, says Fidelity Investments Canada ULC’s Retirement Index which measures how financially prepared working Canadian households are for retirement. Earlier this year, Fidelity released research that concluded that individuals who want to maintain their current lifestyle in retirement should aim to replace about 80 per cent of their pre-retirement income.

Ontario Pension System Reviewed

‘The Ontario Pension System – Will 2008 be a Watershed Year?’ will be the focus of the ACPM’s impACT 2007. Featured speakers include Robert L. Brown, director of research, Ontario Expert Commission on Pensions; and Cameron McNeill, CEO, Buck Consultants. It takes place December 5 in Toronto, ON. For more information, visit www.acpm-acarr.com.

Asset Allocation Focus Of Session

Canada’s top institutional investors and leading investments will discuss topics such as implementing a liability-driven investment framework and creating a strategic asset allocation policy at the Federated Press ‘Asset Allocation Summit.’ It takes place February 4 and 5 in Toronto, ON. For more information, eMail: info@federatedpress.com.

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Tuesday, October 23, 2007

ACPM Pleased With Pension Review

The Association of Canadian Pension Management (ACPM) is pleased with the Alberta and British Columbia governments' decision to appoint a Joint Expert Panel on Pension Standards, which will collaborate to review the two provinces' pension legislation. The expert panel will consult with stakeholder groups to examine the legislation that governs Alberta and BC's pension plans in an effort to create greater harmonization of pension standards between the two provinces. Specific areas of focus include encouraging the establishment and maintenance of employee pension plans while ensuring fairness for both employers and employees.

Submissions To OEPC Now Online

The Ontario Expert Pension Commission (OEPC) is now holding public hearings across the province to hear from stakeholders in the pension system including plan sponsors, plan members and pensioners, unions and other representative organizations, plan administrators, pension professionals, academic, community and other groups, and employers, workers, retirees, and other interested Ontarians. To see submissions already presented to the commission, click on http://www.bpmmagazine.com/

America Unprepared For Boomer Brain Drain

Many employers in the United States remain unprepared for the looming brain drain stemming from the aging of the ‘baby boomer’ generation, leaving themselves open to economic and productivity challenges if strategic plans are not put in place over the next five years, says a report by Ernst & Young LLP. The ‘2007 Aging U.S. Workforce Survey: Challenges and Responses – An Ongoing Review’ study confirms that a gap in strategy exists across organizations when preparing for and developing programs to meet the demands of this population as it nears retirement. Survey findings suggest employers may be experiencing a disconnect with this demographic in areas such as employee benefits programs. For example, more than half of companies either have not, or do not, know if their company has analyzed their benefit plans and conducted a compliance review to gauge whether employees are receiving accurate benefit amounts.

Standards Developed For Recordkeepers 

Acknowledging the need to support plan sponsors, investment advisors, and investment managers in fulfilling their fiduciary obligations, the American Society of Pension Professionals & Actuaries (ASPPA) is developing standards of practice certification for recordkeepers. By forming an industry task force, the ASPPA has established the qualification standards by which recordkeepers will be reviewed and evaluated for this new certification. The standards of practice for the recordkeepers’ certification will be similar in structure to those published in 2006 by Fiduciary 360 for fiduciary advisors, managers, and plan sponsors.

Committee Skills Examined

What it takes to establish a successful pension committee will be one of the topics covered at the 2nd Annual Essential Skills for Pension Committee Members. The Federated Press event takes place December 10 to 12 in Toronto, ON. For more information, eMail info@federatedpress.com.

Tax Treaty Provides Relief

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Monday, October 22, 2007

Remove Investment Rules From PBA

Investment rules for pension funds should be removed from Ontario’s Pension Benefits Act (PBA), says OMERS. In a presentation to the Ontario Expert Commission on Pensions, it says the rules that restrict how much pension funds can invest in certain assets cost it billions of dollars of lost investment income. Instead, pension regulations should move to principles and a co-operative regulatory model based on constructive industry consultation. The federal investment rules included in the Pension Benefits Act limit pension funds to owning no more than 30 per cent of a company’s shares eligible to elect a board of directors. Of book value assets, they can invest only five per cent in a single parcel of real estate or Canadian resource property, 15 per cent in all Canadian resource properties, 25 per cent in all real estate and Canadian resource properties, and 10 per cent in any one entity.

Dollar Hurt