Thursday,September 2, 2010
Multi-national companies are looking for ways to redesign Defined Benefit schemes, but will cut contributions by 10 per cent in the process, says research by Mercer. Its ‘Scheme Design Survey’ of companies in the UK, U.S., Germany, France, Italy, and the Benelux countries found 33 per cent were looking to make changes to their DB scheme, but this would involve cutting contributions by 10 per cent on average. The average level of employee contributions, excluding additional voluntary contributions, is expected to fall to 5.5 per cent. The results indicate the evolution of "traditional" DB will continue as companies find innovative ways to keep their DB schemes open and resist closing to future accrual. The survey also found only 14 per cent had a DB scheme open to future accrual, while 38 per cent confirmed their schemes were closed to future accrual and 48 per cent said their schemes were closed to new entrants.
By introducing solvency relief for both multi-employer and jointly-sponsored pension plans (MEPPs and JSPPs) and by recognizing the need to support reform of outdated investment rules, the government has again demonstrated its commitment to making the kind of changes recommended by Harry Arthurs in his ‘Report from Ontario's Expert Commission on Pensions’ in 2008, says OMERS. "Not only has the government introduced solvency relief for jointly-sponsored and multi-employer plans like OMERS, it has restated its commitment to the further reform of outdated investment rules that limit a Canadian pension plan's desire to make significant private investments in Canada," says Michael Nobrega, its president and CEO.
Margaret Franklin has started her role as chair of the board of governors of CFA Institute, the global association for investment professionals. As chair of an 18-member board comprised of professionals from eight countries, she will bring the unique Canadian perspective of having witnessed the global recession from a well-regulated and comparatively sound economy. Franklin is currently the president and CEO of Kinsale Private Wealth Inc. and has more than 20 years of investment management experience with both institutional and private clients. Franklin will be joined on the board by Beth Hamilton-Keene, director and portfolio manager at Mawer Investment Management Ltd.
ACPM Session Examines Bankruptcies
What exactly happens when a pension plan sponsor files for creditor protection or declares bankruptcy will be discussed in a session at the ‘2010 Association of Canadian Pension Management National Conference.’ A panel of Judy Cameron, of the Office of the Superintendent of Financial Institutions; Robert Ferchat, a professional corporate director; and Ian McSweeney, of Osler, Hoskin & Harcourt LLP; will also look at what can be done to protect current retirees and strengthen the pension promises already made, as well as the implications for the future of private sector pensions. It takes place September 14 to 17 in Whistler, BC. For more information, visit http://www.acpm.com/