Thursday, March 11, 2010
Financial services is not rocket science, says Dr. Damian Handzy, president and CEO of Investor Analytics, it is much harder than that. Speaking at the CIBC Mellon Presentation Series session ‘Tomorrow's Risk Management,’ he said when it comes to risk management, there is a tendency to create stress scenarios that are over-specified. However, the chances of these scenarios taking place are reduced the more complicated they get. It is better, he said, to look at the outcomes of specific scenarios. He also took exception to historic scenarios. “We never live the same thing twice,” he said, noting that this most recent recession was different from previous recessions.
The British Columbia Minister of Finance has released a consultation paper seeking public input “on ways to strengthen the pension system and expand pension coverage for the majority of workers currently without occupational pension plans.” This consultation is the latest development in a federal-provincial review of Canada’s pension system and will be of interest to employers across Canada, says Towers Watson. Two possible approaches for expanding the Canada Pension Plan have been outlined along with other measures such as changes to income tax and pension standards legislation. These proposals have the potential of dramatically changing the pension landscape in Canada. However, it remains to be seen whether there will be sufficient political will and consensus to move forward on national pension reform in 2010.
Defined contribution plan participants fled the stock market during the financial crisis and failed to get back into equities when they turned around, says a Greenwich Associates report. It found the market downturn reduced average DC equity allocations to 41.1 per cent of total assets in 2009 from 48.1 per cent. Assets in stable-value funds and guaranteed investment contracts jumped to 23.8 per cent of assets from 15 per cent; money market allocations increased to 3.7 per cent from 2.5 per cent; and allocations to international stocks dipped to 7.3 per cent from 9.7 per cent.
RBC Dexia Investor Services will provide custody and trustee services to Phillips, Hager & North, a member of the RBC Global Asset Management group of companies. Total value of the new mandate is $40 billion and the asset transition is expected to be completed by April 1. Founded in Vancouver, BC, in 1964, Phillips, Hager & North has grown to become one of Canada’s leading investment management firms.
Steve Bradie is president and chief executive officer of Green Shield Canada. He replaces David Garner who retired December 2009. Most recently, he was executive vice-president and chief operating officer and has been with Green Shield for more than 20 years.
Salahuddin Examines Equity Derivatives
Ali Salahuddin, head of Global Equity-Lined Products at RBC Capital Markets will discuss ‘“Equity Derivatives: Past, Present and Future’ at the Rotman Master of Finance Speaker Series. In his session, he will look at the evolution of listed and OTC equity derivative products from the 1970s listing of equity options to the development of new underlyings and payoffs during different interest rate and volatility environments. It takes place March 25 in Toronto, ON. For more information, visit www.rotman.utoronto.ca/mar25April Interest Rate Assumptions
The interest assumptions required to calculate commuted values for an event which occurs in any month up to and including April 2010 are now available at www.an-actual-actuary.com. An Excel spreadsheet on the website contains six worksheets:
1. Commuted Values – 2009 Basis
2. Commuted Values – 2005 Basis
3. Commuted Values – 1993 Basis
4. Marital Breakdown – CSOP 4300 (May 2009)
5. Annuity Proxy for Solvency Calculations for Non-Indexed Pensions and Fully Indexed Pensions
6. Minimum Interest on Employee Required Contributions (including the 12 month average rates)