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May 10, 2021

ESG REGULATORY FRAMEWORK NEEDED URGENTLY

A global regulatory framework for environmental, social, and governance (ESG) investing is now urgently required, says Nigel Green, the chief executive and founder of deVere Group. His ‘call to action’ comes as major financial institutions are handling a massive uptick of inflows into the sector, but, at the same time, facing accusations of inconsistency in their approach to sustainable impactful investments. “Environmental, social, and governance investing is this decade’s ultimate investment megatrend – and it has been accelerated since the pandemic began,” he says. “There’s been a dramatic increase of inflows into the sector from both retail and institutional investors as it has become clearer than ever that human health is reliant upon healthy ecosystems; that we need to ensure the sustainability of supply chains; and that those companies with robust corporate governance and good business practice fare better in difficult times and are ultimately best-positioned for the future.” This trend is unlikely to slow down in a post-pandemic world as recent research reveals that the majority of ESG investments have outperformed their non-sustainable counterparts over the last year and have had lower volatility. “This will only serve to attract more investors,” he says. Given the continuing and increasing demand, he says the regulatory landscape must reflect the situation. “Regulators need to catch-up. Initiatives that began in the EU are now spreading worldwide, but much more needs to be done, at a faster pace and with a joined-up approach,” says Green.

May 10, 2021

QUEBEC RETIREMENT SYSTEM EXPANDS

With the adoption of Bill 68, the Quebec retirement system was expanded providing Quebec organizations in all industries with the option to provide target-benefit pension plans to their employees, says an Eckler ‘Insights.’ The bill set out requirements for these plans. In the area of funding, Bill 68 sets out rules that are similar to those that apply to private sector defined benefit pension plans, although some rules are specific to TBPs. The adjustments required to restore balance to the plan’s funding may take various forms, such as increasing the contributions of active members, increasing the employer contribution if the plan documents provide for this, or reducing accrued or future benefits, including benefits in payment to retirees. Some constraints on benefits also apply, such as a prohibition against stipulating a pension formula based on final earnings, providing early retirement benefits based on years of employment or credited service, or providing post-retirement indexation other than by a fixed rate under the plan. As well, under the Quebec legislation, the various recovery measures to be implemented when contributions are insufficient (such as increasing contributions from active members or reducing benefits), including restoration measures when the future financial situation permits, will have to be established from the start based on a relatively rigid framework. Thus, the work of developing this framework for each plan will be a critical step since future changes to control measures will only be allowed after a member consultation process. In other words, the terms and conditions relative to these measures will lack flexibility to customize the measures to deal with a specific situation and the plan must put a framework in place that will be appropriate for a broad set of circumstances and scenarios.

May 10, 2021

PROGRAM SUPPORTS OVERALL HEALTH

In light of ‘Mental Health Awareness Week,’ Lafarge Eastern Canada has implemented Wellness@Lafarge, a program designed to support employees’ overall health and well-being at work and in their everyday lives. One of the program’s highlights includes the rollout of Headspace: a mindfulness application available for all employees to download free of charge directly on their personal devices. The app features a host of material to suit every need ‒ from stress management tips to guided meditation, narrated bedtime content to improve sleep quality, physical workout activities, and breathing exercises. While the current situation was not the reason for Wellness@Lafarge’s implementation, it served as a catalyst and brought forward the need to further enhance its offering in eastern Canada, ensuring employees have access to tools that can help ensure they are fit for duty. The program ties in with new and existing resources available through Sun Life and Morneau Shepell and creates alignment between HR and its health and safety and the newly-formed wellness committees.

May 10, 2021

RIS MERGES WITH STERLING

Riverview Insurance Solutions (RIS), a middle-market benefit consulting firm in Alberta, will merge with Sterling Capital Brokers. Founded in 2015 by Derrick Peterson, Riverview oversees benefit consulting for more than 200 high growth clients in Alberta. It is headquartered in Red Deer and actively works with clients in both Edmonton and Calgary. The team has a combined 82+ years of consulting experience that includes benefit plan reviews, plan management, retirement account planning, market analysis, member communication, and corporate insurance planning. Sterling, an independent benefit consulting firm, was founded in 2014 and is headquartered in Toronto, ON. It specializes in servicing high-growth small-to-medium size businesses.

May 10, 2021

MANULIFE GREW GREEN INVESTMENTS

Manulife continued to grow its own portfolio of green investments, investing $39.8 billion in green investments such as renewable energy and green buildings in 2020, says its ‘2020 Sustainability Report and Public Accountability Statement.’ The report highlights it and John Hancock’s environmental, social, and governance (ESG) performance in the year. Roy Gori, president and chief executive officer at Manulife, says, “Alongside our values, our mission drove our decision-making throughout one of the most challenging periods many of us have ever faced. COVID-19 has brought heartbreak and loss to people around the world. At the same time, it has reminded us of the power of community and the importance of preparing for the future.”

May 10, 2021

GSC CONTRIBUTES TO RED CROSS

In light of the escalation of the global COVID-19 crisis in communities across the world, Green Shield Canada (GSC) has made a $25,000 contribution to the Canadian Red Cross as part of the ‘COVID-19 Global Appeal.’ The funds will support COVID-19 preparedness, response, and recovery activities. In addition to this contribution, it is also committed to matching all employee donations to COVID-19 relief programs at 500 per cent, up to an additional $25,000 for every dollar an employee contributes to the COVID-19 emergency fund of their choice. To date, it has contributed in excess of $500,000 to COVID-19 emergency relief projects across Canada, primarily in partnership with local United Ways and community foundations.

May 10, 2021

CDPQ ACQUIRES AMERICAN TOWER STAKE

The Caisse de dépôt et placement du Québec (CDPQ) will acquire a 30 per cent stake in American Tower Corporation Europe as part of a long-term strategic partnership. American Tower (ATC) will retain managerial and operational control, as well as day-to-day oversight of ATC Europe, while CDPQ will obtain seats on the board of directors, along with certain governance rights. ATC is a real estate investment trust and an owner and operator of wireless and broadcast communications infrastructure in several countries worldwide.

May 10, 2021

VALUE OF PENSION EXAMINED

‘The Value of a Pension Part II: The Employer’s Perspective’ will be discussed June 2 by a panel at an ACPM Alberta Regional Council session. John Hill, director of pension plan management at CP Rail; Leslie Kwasny, CFO for the  Edmonton International Airport; and Robert Gerelus, a pension and benefit strategist with the University of Alberta; will explain how their organizations have been impacted by the COVID 19 pandemic and whether there has been a change in how these organizations and their employees view and value their pension plans and retirement savings. Information is at https://www.acpm.com/ACPM/Events/Regional-Events/Alberta-Council-Event.aspx

May 7, 2021

MARRIAGE BREAKDOWN GUIDELINES NEED CLARITY

Multi-jurisdictional pension issues are often complex and frequently require legal review, says the Ontario regional council of the Association of Canadian Pension Management (ACPM). And while it appreciates the effort to provide some guidance in the Financial Services Regulatory Authority of Ontario (FSRA) draft guidance documents ‘Administration of Pension Benefits Upon Marriage Breakdown,’ unfortunately, the example provided does not clearly show how this section should be applied. It says it understands that FSRA’s main concern is that pension earned in Ontario is divided based on Ontario rules, but there is a disconnect because the multi-jurisdictional agreement allows the family law rules and the pension division rules in the province of residence to apply to the entire pension regardless of where the pension was earned. Often there are multiple provinces involved and spitting the pension into various portions would require the confirmation of the dates worked in various provinces and would significantly complicate the process. The guidance clearly states that an out-of-province court order is not enforceable in Ontario without an Ontario order, but it places the responsibility on the plan administrator to request an Ontario court order or domestic contract prior to making payment. This would cause additional time and cost to the member, former spouse, and the plan administrator. “Out-of-province separations are complicated matters and difficult to summarize to cover most situations,” it says. “We feel the guidance should include a note that these situations can be complex and consultation with experts in multi-jurisdictional pension law is advised prior to making payment of any pension assets earned in Ontario to ensure the proper legislation has been followed.”

May 7, 2021

SCENARIO TESTING IDENTIFIES CURRENT POSITION

Scenario testing is thinking about things from a point in time perspective, says Michael Carse, director of product management at Moody’s Analytics. He told the Benefits and Pensions Monitor Meetings & Events ‘Navigating the Road to Recovery: Do you have the pension risk management tools you need to react quickly to economic challenges?’ that this provides a look at the current position of a pension plan, Looking at market stresses, local economic variables, and demographic variables gives a better sense of what’s plausible in terms of changes that can happen to the plan through time. It’s also useful to layer on considerations to identify the potential directions a plan can take.

May 7, 2021

CLIMATE ACCREDITATION FRAMEWORK LAUNCHED

Willis Towers Watson has launched Climate Transition Pathways (CTP), an accreditation framework that provides insurance companies and financial institutions with a consistent approach to identifying which organizations have robust transition plans aligned to the Paris Agreement, and supports their role as stewards in the transition to a low carbon economy. Working with independent third-party groups including Volans, a consultancy responsible for the Bankers for Net Zero initiative, and the Climate Bonds Initiative (CBI), a global investment organization committed to climate resilience, the CTP governance committee is being created. In their role as committee members, they will be responsible for creating industry-specific solutions to be rolled-out over the coming months. They will utilize the assessment for low carbon transition (ACT) methodology and map the output to an accreditation model to review business commitments to principles aligned to the Paris Agreement and science-based targets consistent with reducing global emissions to help companies move to a net-zero carbon environment. Organizations meeting these principals and achieving accreditation will have the opportunity to access insurance capacity and capital to support their orderly transition and help them meet their low carbon commitments.

May 7, 2021

BENEPLAN REFUNDS PREMIUMS

Beneplan has issued a refund of $5.9M in premiums back to its clients ‒ a group of 400 small businesses in Ontario. This payout is part of its refund program whereby if a company’s health claims are lower than their premiums, they are entitled to receive money back. As COVID-19 lockdowns limited employee visits to dentists, massage therapists, and other healthcare providers, the volume of claims has proportionately dropped. Yafa Sakkejha, CEO of Beneplan, says, “the majority of our clients are blue collar. They run factories, industrial plants, machine shops, and other essential services that are often not represented. We’ve seen clients use the refunds to pay off expenses, hire staff, extend health benefits, and, for some owners, finally pay themselves a small salary.”

May 7, 2021

YIELD DIP BUOYS RISK APPETITE

A dip in bond yields helped buoy global risk appetite, says FTSE Russell’s ‘Monthly Performance Report for April 2021.’ Most equity markets extended their first quarter gains in April amid the improving outlook for advanced economies and corporate profits (particularly in the U.S.) and the pullback in government yields. The rally paused at month-end as elevated valuations and a spike in Covid-19 cases in India and Brazil weighed on risk appetite and investors digested the quarter’s earnings results. As well, it says global equity markets climbed in April, many ending near all-time highs. Government bonds broadly rose, while high-yield generally outpaced investment-grade credit. Long-dated U.S. and UK inflation-linkers rebounded. Copper and oil rose, as did gold.

May 7, 2021

EVENT MANAGER LAUNCHED

Northern Trust has launched Omnium Event Manager, a web-based workflow tool designed to provide asset managers and asset owners with a consolidated view of corporate action and dividend events affecting fund portfolios. This enables them to co-ordinate with brokers and custodians to respond effectively to the voluntary events. It replaces the often manual workflow of monitoring and responding to corporate actions with a platform that includes tools for capture of event and position data, notifications and deadline publishing, and communication with counterparties. The one-stop solution reduces the time, energy, and potential risk that accompanies the gathering of information and communicating across multiple web portals to connect with various counterparties.

May 7, 2021

CDPQ ACQUIRES MAJORITY STAKE

The Caisse de dépôt et placement du Québec (CDPQ) and CVC Capital Partners have acquired a majority stake in BlueFocus Intelligent Communication Group’s international group of agencies, managed under its subsidiary, BlueFocus International. This transaction will create a global platform headquartered in Quebec City for the three agency groups: Vision7 International which includes Cossette, Cossette Media, Eleven and Citizen Relations; We Are Social (London, UK); and fuseproject (San Francisco, CA). The agreement will create a digital-first, technology-enabled global advertising and marketing services group of companies.

May 7, 2021

FUTURE OF WORK EXAMINED

Roy Sauderson, chief learning officer at Engage2Excel Group, will examine ‘Real Recognition in a Virtual Word’ and New York Times bestselling authors and global leadership experts Adrain Gostick and Chester Elton will discuss ‘The Future of Work’ in keynote sessions at ‘Forging Ahead,’ the virtual ‘CPBI Forum 2021’ set for June 14 to 18. Sessions will look at topics such as the relevancy of defined benefit pension plans today, rethinking obesity in the workplace, and searching for yield in fixed income. Information is at http://www.cpbi-icra.ca/Events/Details/National/2021/06-14-CPBI-FORUM-2021

May 7, 2021

BITTON HAS NEW ROLE

Yaniv Bitton is vice-president, head of investor relations and capital markets at Sun Life Financial Inc. He will serve as the primary spokesperson to the investment community, overseeing equity and fixed income analyst and investor communications, as well as its capital markets function which includes the capital funding program and rating agency relationships.

May 6, 2021

PRIVATE ASSETS MAKE SENSE

Private assets with an income growth orientation make a lot of sense in a multi-asset framework because, “ultimately you’re getting equity-like returns with fixed income like volatility, says Andrew Croll, vice-president and director, alternative investments, at TD Asset Management. Speaking at its ‘2021 Sharing of Knowledge Learning Series,’ he said it really comes down to identifying the risk and return profile of the private market exposure, and understanding how that risk can be managed in line with the investor’s objectives. Using the example of an infrastructure asset, a hydroelectric power generation facility, he said when the yield factor is broken down, there’s different elements in it ‒ credit risk, the reliability of the counterparty, duration risk, the length and timing of the cash flows, and liquidity risk. “It’s important to really understand how these different factors interact with other components of your portfolio, he said. And if a portfolio is created that has similar credit and duration profiles as a universe bond with a higher expected return, “you’re getting compensated for that liquidity.”

May 6, 2021

ANNUITY CHANGES GO AHEAD

The Liberal government is moving ahead with measures from the 2019 federal budget that stalled before they were implemented with changes related to transfers of commuted values to individual pension plans (IPPs), new annuities under registered plans, and stock option deductions for employees. Changes to the Income Tax Act will limit the benefit of the employee stock option deductions taxed effectively at the capital gains rate. The $200,000 cap was introduced in the 2019 budget. The new rules would apply to grants beginning July 1. The $200,000 limit will be based on the fair market value of the underlying shares and Canadian-controlled private corporations will not be subject to the new rules. Bill C-30 also moves forward on the advanced life deferred annuities (ALDAs) and variable payment life annuities (VPLAs) proposed in 2019. The ALDA would allow a client to move some savings out of their registered retirement accounts to an annuity deferred until age 85. Annuities purchased with registered funds generally begin at age 71. A purchase cap was set at 25 per cent of the source plan, to a maximum of $150,000. The VPLA provides payments that vary based on the investment performance of the underlying annuities fund and on the mortality experience of annuitants. Bill C-30 will also limit transfers of pensionable service into individual pension plans (IPPs). The move will make it clear that an IPP can’t be implemented simply to avoid tax on the commuted value of benefits from another defined benefit plan.

May 6, 2021

CANADIANS LACK ESG KNOWLEDGE

While the majority of Canadians (65 per cent) have heard of ESG (environmental, social, and governance) investing, only 34 per cent consider themselves knowledgeable about the topic, says a survey from BMO Global Asset Management (BMO GAM). The BMO GAM survey also shows investors aged 18 to 34 are the most knowledgeable demographic at 38 per cent – seven per cent higher than those aged 35 to 54 and five per cent higher than those over the age of 55. Younger investors are also most likely to currently hold ESG investments in their portfolios at 39 per cent, compared to 31 per cent of investors over 5