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August 11, 2022

VPLA OFFERS BETTER DECUMULATION OPTION

A variable payment life annuity (VPLA) may be a better option for retirees to decumulate their retirement savings, says Zaheed Jiwani, a principal at Eckler. In the ‘Innovations in DC Decumulation Options’ session at the 41st Annual ISCEBS Employee Benefits Symposium, he said unlike other decumulation options like annuities, RRIFs (registered retirement income funds), and LIFs (life income funds), VPLAs allow individuals to manage their investments and drawdown income. These plans pool assets and invest them. Payments vary based on investment returns and changing pool mortality which means those who survive see their payments subsidized by those who die earlier. A proposal is before the federal government to create legislation to permit them. To do so requires purpose-built legislation specific to VPLA rather than integrating them into current rules. As vehicles to access these pools are created, uniform treatment of registered savings, effective protection from longevity risk, and a diverse ecosystem of providers will be needed quickly.

August 11, 2022

FAIR MARKET VALUE MUST BE REPORTED

As of the 2023 tax year, issuers of RRSPs (registered retirement savings plans) and RRIFs (registered retirement income funds) will be required to annually report the fair market value of all property held by the plans at the end of the calendar year. The draft legislation from the department of finance also notes that the issuer is not required to give copies of the information to the taxpayer who is the plan’s annuitant. The draft legislation addresses enhanced reporting requirements for trusts first proposed in the 2018 federal budget.

August 11, 2022

SURVEY CAN HELP PLAN DESIGN

If now is the time to revisit benefits strategy, a survey can help when designing a program that is meaningful by getting input from employees, says Valerie Travis, founder of Bespoke Benefit Solutions. However, she told the 41st Annual ISCEBS Employee Benefits Symposium session ‘How Meaningful Employee Benefits Surveys and Focus Groups Drive Engagement’ care needs to be taken to ensure these surveys, focus groups, or pulse polls don’t go bad. Many do because false expectations or concerns are created by asking about things that aren’t on the table. Another trap to avoid is only asking about what they don’t like or including loaded questions, leading questions, double barreled questions, unfamiliar/unclear questions, or questions too difficult to complete. Instead, questions need to be carefully constructed to avoid collecting unactionable, inconclusive, or ambiguous data. Survey, focus groups, and pulse polls are all useful. Surveys reach more participants, touch on more topics, are more quantitative, and provide more anonymity, she said. While focus group have fewer participants, they allow topics to be explored more deeply. Pulse polls are quantitative seeking answers to a few easy to answer questions. They are also easily replicated to measure trends, changes, and progress over time. The benefits of these start with increasing the value of a program without increasing budget by measuring perceptions, awareness and understanding. As well, they increase engagement by showing employees the company cares, values their perspectives, is open to change, and wants to hear all voices.

August 11, 2022

HSBC ENHANCES FAMILY-BUILDING BENEFITS

HSBC has introduced an enhanced family-building benefits for Canadian employees including new coverage for fertility treatments, surrogacy, and gender-affirmation. The enhanced benefits include a surrogacy medical benefit of up to a maximum $30,000 per lifetime for eligible surrogacy medical expenses incurred by a surrogate on their behalf; up to a maximum of $20,000 per lifetime for eligible fertility treatment expenses; and a gender affirmation benefit to help employees embody their authentic selves. It provides additional financial support of $10,000 per year with a $50,000 lifetime limit for those treatments that are not covered by provincial health programs. It is also increasing coverage of existing family-building benefits. Up to $10,000 per child is available towards the cost of adopting a child. An eligible drug expense claim of up to $5,000 per year can be made for fertility. If both parents work for HSBC Canada, maternity or parental top-up will be provided for both employees.

August 11, 2022

CDPQ LEADS CLEVERTAP FUNDING

The Caisse de dépôt et placement du Québec (CDPQ) will lead a US$105 million funding round for CleverTap, a global B2B SaaS platform for customer engagement and retention. The funds will be used to support CleverTap’s global expansion and enhance the development of its world-class solutions and technology. Founded in Mumbai in 2013 and headquartered in Mountain View, CA, its customer engagement and retention platform leverages machine learning and artificial intelligence to offer a user engagement suite that enables brands to build valuable, long-term relationships with their customers.

August 11, 2022

CONFERENCE FOCUSES ON SUSTAINABLE RETIREMENT

‘A Climate for Innovation ‒ Exploring Sustainable Retirement’ is the theme of the ‘2022 ACPM National Conference.’ Sessions will examine ‘Exiting the Pandemic ‒ Emerging Economic Trends;’ ‘Pension Trends, Past, Present & Future: How is the pension industry continuing to pivot in an ever-changing world?; ‘Pension Adequacy – Mind the gaps;’ and ‘The Future of Member Communications in a Digital First World.’ It takes place September 27 to 29. Information is at https://www.acpm.com/events/national-conference

August 11, 2022

DUO SERVICES ASSETS

Dean Marziarz and Mauricio Sandoval are senior business development representatives for Asset Servicing in North America at Northern Trust. Marziarz has more than 20 years of asset servicing experience at BNY Mellon and JP Morgan, where he developed and led strategic private markets relationships with large alternative investment managers. Sandoval was previously with BNY Mellon, where he was a senior relationship manager with asset servicing clients including traditional and alternative asset managers, banks, broker dealers, and asset owners.

August 10, 2022

LONGEVITY LIFESTYLE DESIGN IMPROVES EXPERIENCE

Plan sponsors and advisors can improve the plan member experience through longevity lifestyle design and improve business outcomes, says Simon Chan, a principal at Adapt with Intent Consulting. Taking this approach can reduce presenteeism, improve health claims, raise employer brand, and retain knowledge by identifying opportunities to structure work for a retiring plan member to proactively retain their knowledge and use them as coaches and mentors, he told the 41st Annual ISCEBS Employee Benefits Symposium session ‘The Future of Retirement: How Plan Sponsors and Advisors Can Improve the Plan Member Experience Through Longevity Lifestyle Design.’ In the presentation with Mike Duran, an author and consultant with Victory Lap Retirement, he said major societal trends are reshaping retirement. These include greater longevity, shifting demographics, erosion of retirement plans, and disruptions like the COVID-19 pandemic. For plan sponsors, the aging population is retiring creating a knowledge loss at a time of talent and labour shortages. They need to change from full stop retirement based on financial aspects to a longevity lifestyles by design approach based on achieving financial independence. Duran said retirees have fundamental needs that need to be satisfied. However, not all retirees have the same needs and interests. The core principles for happy retirement include health, financial independence, spirituality, and having a purpose that gets them out of bed. A longevity by design approach for retirees starts with figuring out who they want to be and include setting goals and costing these out, he said.

August 10, 2022

RESILIENCE ASSOCIATED WITH JOB SATISFACTION

Evidence shows resilience is positively associated with work happiness, job satisfaction and performance, and organizational commitment, says Darren Steeves, CEO and founder of JackHabbit. Speaking on ‘What We Know About Resilience and Its Application in Workplaces’ at the 41st Annual ISCEBS Employee Benefits Symposium,’ he said it is also found to be associated with work engagement. Resilience at work improves the professional quality of life including significantly reducing the level of secondary work trauma and there is a positive relationship between resilience and innovative work behaviour. Resilient workers are healthier, as well. These are key issues considering the stress found in many workplaces. In fact, stress remains the number one cause of absence from work and mental health conditions are the most widespread cause of long-term absences in all different workforces. Stress in workplaces also contributes to at least 60 per cent of workplace accidents. Resilient skill development in workers is important, but there also needs to be a workplace environment. The foundation is based on improving the quality and effectiveness of health and wellness support for employees. Resiliency gives people the power to recover if they get hurt. Resiliency training needs to be part of an organization’s culture. To do so, they need to create a strategy to achieve it.

August 10, 2022

CANADIANS PAY FOR PUBLIC HEALTHCARE

A Canadian family of two adults and two children with a household income of an average $156,086 will pay an estimated $15,847 for public healthcare in 2022, says a Fraser Institute study. However, with most of the funding for public healthcare coming from general taxation, most Canadians are unaware of the cost outside of those that are employer-collected or provincial contributions. Even couples without dependent children will pay an estimated $15,229, while single Canadians will pay $4,907 and single parents with one child will pay $5,812. “Canadians pay a substantial amount of money for healthcare through a variety of taxes ‒ even if we don’t pay directly for medical services,” says Bacchus Barua, director of health policy studies at the Fraser Institute and co-author of ‘The Price of Public Health Care Insurance, 2022.’ The study reveals since 1997 while household income has grown by 116 per cent, the cost of public healthcare has risen 210 per cent. “Understanding how much Canadians actually pay for healthcare and how much that amount has increased over time, is an important first step for taxpayers to assess the value and performance of the healthcare system and whether it’s financially sustainable,” says Barua.

August 10, 2022

MERGER OF NATIONAL AND PRIVATE SYSTEMS PROPOSED

CFA Society Germany has proposed a merger between the country’s occupational and private pension systems under a format based on models in place in Sweden and Canada. It says this would cut administrative and sales costs that would lead to an increase in the level of pensions. The models would cater to two different market segments ‒ one including savers opting for a standardized, state-run pension product and another for savers who demand control over investments in a Germany. It suggests the registered retirement savings plan (RRSP) combining occupational and private pensions in Canada as the model for people who want control over savings and investments. Under that model, retirees can opt to open an account for private or occupational pensions at a bank that would offer a wide range of investment products and tax-deductible contributions. It would become a “tax-neutral pension product” at retirement age, with retirees withdrawing an annual or monthly percentage of pension assets.

August 10, 2022

FOCUS GROWS ON FRINGE BENEFITS

U.S. employers are increasingly putting more focus on fringe benefits as they offer the ability to customize benefits and target needs more than typical off-the-shelf insurance products or most standard health and welfare benefits, says Brian Gilmore, vice-president, lead benefits counsel, at Newfront. He told the 41st Annual ISCEBS Employee Benefits Symposium session ‘Fringe Benefits Taking Center Stage’ that these are benefits on the fringe of primary benefits such as medical, dental, vision, group-term life, disability, and employee assistance plans. These can include assistance for treatments for infertility, transgender, medical travel, commuter benefits to pay for mass transit and parking expenses, educational assistance, and adoption assistance. “In other words, these are supplemental-type benefits designed to recruit and retain employees by providing additional levels and types of benefits beyond the standard health and welfare offerings,” he said.

August 10, 2022

WEI JOINS SUN LIFE

Chris Wei is executive vice-president and chief client and innovation officer (CCIO) at Sun Life. He has more than 25 years of global leadership experience in insurance and wealth management.

August 9, 2022

GENE THERAPY OFFERS ONE-TIME TREATMENT

Gene therapy is a paradigm shift, offering a one-time therapeutic treatment with lasting therapeutic benefit, says Suzanne Lepage, a private health plan strategist. She told the ‘Understanding Gene Therapy and Its Impact on Private Drug Plans’ session at the ‘41st Annual ISCEBS Employee Benefits Symposium’ that mutation in body cells can cause diseases which have significant impact on health. These can be inherited from parents, occur spontaneously, or as a result of environmental factors. About 4,000 diseases are linked to gene disorders and they are responsible for 80 per cent of rare diseases. Gene therapy is different from cell therapy where cells are manipulated. With gene therapy, genes are replaced, introduced, or changed, but unlike traditional drugs which can require frequent administration and focus on managing disease, gene therapy targets one disease and may even cure it with just one dose. This makes the return on investment obvious, she said. It can replace a lifetime of other expensive treatments and products, mitigating future high-cost medical services. However, because of the high cost, there is an “ethical dilemma,” she said. There is no consensus in the Canadian private payer market on how to assess the value or cost effectiveness which may depend on the perspective of the evaluator. However, for plan sponsors, providing coverage for this therapy can be used as an attraction and retention tool as it provides “peace of mind” against unexpected health conditions.

August 9, 2022

GEOPOLITICAL ISSUES CHALLENGE NET-ZERO GOALS

Net zero fossil fuels could be achieved by 2050, but geopolitical issues and market structures are currently challenging this goal, says a Purpose Investment’s commentary. As climate concerns rise to new heights and sources of energy become increasingly politicized, the energy transition is becoming a priority for countries around the world and the face of the future for many industries. However, most recently, the Russia-Ukraine war has forced countries, particularly in the EU to reimagine their energy transition plans, with the fear of compromised energy security. It says 40 per cent of the natural gas in Europe was previously supplied by Russia; these countries are now left with no choice but to revert back to coal consumption as a source of energy in the meantime. As well, with Russia’s introduction of the ‘Power of Siberia 2’ pipeline to China, major trade relations among the U.S., China, and countries across Europe are at risk.

August 9, 2022

PLAN MEMBERS INTERESTED IN ESG

Environmental, social, and governance (ESG) investing in pension plans matters because this is a fast-moving topic from all corners of the industry, says Eric Mooney, investment solutions executive, group retirement services, Sun Life. Speaking on the topic at the 41st Annual ISCEBS Employee Benefits Symposium, he said plan members are expressing interest in ESG and sustainable investing. As well, Canadian regulators are releasing opinions on how plans should consider ESG factors and fund classification criteria and disclosure are being developed. A Sun Life survey showed 80 per cent of members care about a strong return when investing sustainability and they are as concerned with human rights as they are with the environment. Developing an ESG process for capital accumulation plans starts with aligning corporate sustainability with the workplace plans which starts with knowing what matters most to plan members. An understanding is also needed on the various approaches to sustainable investing and which makes most sense for the plan. There are three approaches ‒ the integration of ESG throughout the investment process; divestment or screening out of funds that may not meet fiduciary obligations or members’ needs; and sustainability focused, also referred to as impact or thematic investing. This is followed by adopting a formal policy on the approach selected and documenting the selection of investment options. Members then need to be informed of the funds available to them that integrate ESG factors. Sponsors should also lean on their providers to assist in evaluating a manager’s ESG integration practices or select sustainability focused investments.

August 9, 2022

UNDERPERFORMANCE ANXIETY INCREASES

Plan sponsor investment underperformance anxiety has increased, says a Cogent Syndicated report. ‘Retirement Planscape: Maximizing plan provider and investment manager success in the DC retirement market’ finds the top fear for 401(k) plan sponsors in the U.S. this year, at 57 per cent, is underperformance of plan investment options. This is up from 51 per cent last year. Employees not saving enough for retirement was another source of underperformance anxiety. The biggest challenge facing plan sponsors are compliance and regulations, followed by employee engagement and participation.

August 9, 2022

INCLUSIVE LANGUAGE NEEDED FOR CHANGING WORKFORCE

Inclusive language matters because workplace demographics are changing and younger employees are more ethnically diverse than ever, says Michelle Oram, director of financial wellness at Manulife. These people want to work for companies that reflect their values, make everyone feel valued and respected, and create a sense of belonging, she said at the ‘Watch You Language: Are Words Unintentionally Harming Your DEI Efforts?’ session at the 41st Annual ISCEBS Employee Benefits Symposium. Inclusive language is language that is free from words, phrases, or tones that reflect prejudiced, stereotypes, or discriminatory views of particular people or groups. It is language that does not deliberately or inadvertently exclude people from feeling accepted. In many cases, language is used which may not intend to do harm, but can impact others. Inclusive language puts people first, uses universal phrases, recognizes the impact of mental health language, and uses gender neutral language. She encouraged people to be thoughtful about imagery and if they are unsure if language is offensive, to ask others.

August 9, 2022

OMERS ACQUIRES PUEBLO

OMERS Private Equity will acquire Pueblo Mechanical & Controls, an American mechanical services provider, from Huron Capital Partners. Founded in 2001, Pueblo provides HVAC and plumbing installation, retrofit, and repair services to customers in education, municipal, and healthcare end markets. OMERS Private Equity will provide resources and expertise to further accelerate the company’s growth and support its strategic expansion through mergers and acquisitions.