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June 30, 2021

PRIMACY OF BENEFICIARY DESIGNATIONS REAFFIRMED

An Ontario Superior Court decision has reaffirmed the primacy of beneficiary designations for registered plans. In Mak (Estate) v Mak, the plaintiffs unsuccessfully sought to overturn the beneficiary designation of a RRIF (registered retirement income fund). The whole point of a beneficiary designation … is to specifically state what is to happen to an asset upon death,” said Justice M. McKelvey in the judgment. He added that the principle established under the Supreme Court of Canada decision Pecore v Pecore ‒ that a transfer of property for no consideration to an adult child is presumed to be a trust ‒ did not apply to the RRIF’s beneficiary designation in this case. The Mak decision is contrary to the decision in Calmusky v Calmusky as that the sole named beneficiary of a RRIF was not the plan’s ultimate beneficial owner, but rather that the beneficiary was holding the RRIF in trust for the deceased’s estate.

June 30, 2021

PUBLIC SERVICE PLAN HAS POSITIVE RETURN

The Public Service Superannuation Plan achieved a positive rate of return on investments of 15.75 per cent, net of investment management fees, generating $1 billion in total investment income in fiscal year 2020-2021, says the Public Service Superannuation Plan Trustee Inc. (PSSPTI). The plan’s funded status increased to 97.6 per cent as at March 31 from 91.4 per cent the previous year. Plan liabilities were valued at December 31, 2020, with a funded ratio at that date of 97.9 per cent. As at March 31, its total net assets were approximately $7.240 billion, with liabilities of $7.415 billion, resulting in an unfunded liability amount of $175 million at that point in time. The plan’s experience gain on investment assets in calendar year 2020, relative to the assumed rate of return at the beginning of 2020 of 5.5 per cent, decreased liabilities by $135 million. However, a change in the discount rate to 5.25 per cent from 5.5 per cent increased liabilities by $213 million.

June 30, 2021

HALF OF CANADIANS ON MEDICATION

Over half (55 per cent) of adults aged 18 to 79 used at least one prescription medication in the past month, while 36 per cent used two or more, and 24 per cent used three or more, says Statistics Canada. Its report shows the use of prescribed medication increased with age (taking one medication or more: 38 per cent at ages 18 to 39, 56 per cent at ages 40 to 59, and 81 per cent at ages 60 to 79; taking three medications or more: seven per cent at ages 18 to 39, 22 per cent at ages 40 to 59, and 52 per cent at ages 60 to 79). Overall, a higher proportion of females aged 18 to 59 (55 per cent) reported using prescription medications, compared with males (38 per cent), while for 60- to 79-year-olds, there was no significant difference between males (80 per cent) and females (81 per cent). Spending on prescription medication accounted for 13 per cent of total national health expenditures in 2019.

June 30, 2021

UTAM SIGNS CLIMATE STATEMENT

UTAM has joined more than 450 investors, representing US$41 trillion in assets, in signing a joint statement to world governments, urging leaders to accelerate action to address climate change. The statement says, “We stand at the beginning of a pivotal decade in which institutional investors and government leaders worldwide have the power to raise ambition and accelerate action to tackle the climate crisis. If we do not meet this challenge and change course immediately, the world could heat in excess of 3°C this century – far beyond the goal of the Paris Agreement to limit the global average temperature rise to no more than 1.5°C, which scientists say is necessary to avoid the worst impacts of climate change.” Achieving this goal will require reducing global net carbon dioxide emissions by 45 per cent from 2010 levels by 2030, “with a dramatic reduction of all greenhouse gas emissions essential for reaching net-zero emissions by 2050 or sooner.” The signatories call on governments to strengthen their nationally determined contributions (NDCs) for 2030 in line with limiting warming to 1.5°C; commit to a domestic mid-century, setting a net-zero emissions target, and outline a pathway with ambitious interim targets including clear decarbonization roadmaps for each carbon-intensive sector; implement domestic policies to deliver these targets, incentivize private investments in zero-emissions solutions and ensure ambitious pre-2030 action; phase out of thermal coal-based electricity generation by set deadlines in line with credible 1.5°C temperature pathways, the avoidance of new carbon-intensive infrastructure (e.g. no new coal power plants) and the development of just transition plans for affected workers and communities; and ensure COVID-19 economic recovery plans support the transition to net-zero emissions and enhance resilience. “Governments, investors and companies must work together to address the climate crisis,” says Daren Smith, UTAM’s president and chief investment officer.

June 30, 2021

MANAGERS SEE RECORD REVENUE GROWTH

A year after the coronavirus pandemic struck, publicly traded asset managers in North America and Europe saw record growth in revenue and assets under management in the first quarter, says data compiled by Casey Quirk, a business of Deloitte Consulting. Its analysis of listed asset managers with a combined $20 trillion in AuM (assets under management) as of March 31 shows that aggregate revenue in the first quarter increased three per cent from the previous quarter and 20 per cent from the first quarter of 2020. Meanwhile, AuM rose three per cent from the fourth quarter and 30 per cent from the same period the year earlier. “Asset managers are reaping the rewards of strong capital markets, with many firms i