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August 13, 2021

DC MEMBERS SHIELDED

Rising equity markets during the second quarter shielded defined contribution pension plan members from decreased annuity rates and improved member outcomes, says Eckler’s ‘CAPit.’ A typical male DC plan member retiring at age 65 at the end of June, achieved a gross income replacement ratio of 59.2 per cent and a female DC plan member 57.6 per cent replacement. The steep market downturn and recovery in 2020 has painted different retirement pictures for DC members who retired within 16 months of each other. Members who retired at the end of June this year received a seven per cent higher annual income for life than those who retired in March 2020.It also shows that after participating in the investment market rollercoaster ride of 2020, investor expectations have shifted considerably and many are now looking for returns of 10.6 per cent above inflation from their investments in 2021. However, over the past 20 years, a balanced portfolio consisting of 60 per cent in equities and 40 per cent in bonds generated an annualized return of 6.6 per cent. If a typical DC member earned an annual return of 10.6 per cent after inflation on their investments, they would be able to replace around 90 per cent of their income at retirement, it says.

August 13, 2021

FUNDING RELIEF EXPIRES

The time period during which administrators of certain defined benefits plans in Ontario could elect to use provisions that provided temporary funding relief from solvency funding requirements has expired, says an Aon ‘Radar.’ Requirements for progress reports related to the solvency funding relief are also revoked. The information provided by these progress reports is no longer relevant as a result of the changes in funding rules for DB pension plans in effect as of May 1, 2018. Any existing funding requirements will be maintained, so these amendments would have no effect on required funding for any DB pension plans. This regulation comes into force on September 1.

August 13, 2021

INVESTORS LOOK FOR PROVEN REAL ESTATE

As Canada continues to recover from COVID-19, investors will continue to look for opportunities to invest into commercial real estate properties with proven stable performance, says Morguard’s ‘2021 Canadian Economic Outlook and Market Fundamentals Q2 Update.’ The report shows demand for multi-suite residential rental assets will remain strong among investors looking at assets with strong and sustained performance. As well, office market fundamentals are expected to improve over the balance of 2021 as workplaces reopen and workers return to in-person configurations. However, cautious investment is anticipated for retail assets until investors identify a more factual return of customers provincial restrictions for physical distancing and stores reopening evolve.

August 13, 2021

GREEN INVESTMENT BOOSTED

UK retail investors are increasingly supportive of the green investment revolution and planning to boost funds in the sector, says research by the Global Palladium Fund. Nearly half (47 per cent) of retail investors plan to devote more cash to companies and funds at the forefront of the green revolution covering industries such as electric vehicles and solar panels, it says. More than half (51 per cent) of retail investors agree that the drive for a net zero economy and the focus on renewable energy and electric vehicles represents a good investment opportunity and the growing optimism is feeding through to funds focused on metals.

August 13, 2021

LANGLOIS JOINS WITH SÉGUIN RACINE

Langlois Lawyers is joining forces with Séguin Racine Attorneys Ltd., a firm specializing in business transactions, in order to offer a broad range of business law services with expanded capabilities in securities and capital markets and financial services. The merger means it will maintain momentum and strengthen its ability to serve clients in Quebec, Canada, and abroad.

August 13, 2021

ONTARIO TEACHERS’ SELLS PLASTICS FIRM

Wind Point Partners, a Chicago-based private equity firm, and the Ontario Teachers’ Pension Plan Board have sold Aurora Plastics to Nautic Partners. Aurora provides specialty materials solutions, including specialty flexible and rigid PVC, thermoplastic elastomers, and other engineered materials. Its highly technical products primarily serve the building and construction, industrial, and consumer end-markets. Wind Point and Ontario Teachers’ acquired Aurora in August 2016.