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Daily News Alerts

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December 21, 2022

Underfunding Link Made To Governance

Two recent studies throw considerable light on the impact of board selection processes on the finances of U.S. public sector pension organizations, says Keith Ambachtsheer, president of KPA Advisory. In the article ‘How Peter Drucker Revolutionalized Canada’s Public Sector Penson System: Lessons for Americans’ in the Harvard Law School Forum, he says a 2017 study by Aleksandar Andonov, of Erasmus University Rotterdam; Rob M.M.J. Bauer, of Maastricht University and the International Centre for Pension Management; and K.J. Martijn Cremers, of the University of Notre Dame  titled ‘Pension Fund Asset Allocation and Discount Rates’ published in The Review of Financial Studies, and a 2018 study by Andonov, Yael V. Hochberg; of Rice University; and Joshua D. Rauh, of the Standford Graduate School of Business; titled ‘Political Representation and Governance: Evidence from the Investment Decisions of Public Pension Funds’ published in the Journal of Finance, found 55 per cent of the board members of U.S. public sector pension funds are either appointed through some kind of election process or through ‘ex officio’ status requiring board membership by state or local officials (e.g., treasurer, comptroller, etc.) versus zero per cent in Canada and Europe. They show there is a statistically significant positive correlation between the proportion of board members elected or ‘ex officio’ and the degree to which the pension plan was underfunded and there was a statistically significant negative correlation between the proportion of board members elected or ‘ex officio’ and realized pension fund investment returns. In short, the findings of these two studies confirm the logic and power of the Drucker ‘legitimacy’ requirement in the governance of pension organizations, he says. When short-term political considerations become part of the pension governance mix, future generations of plan members and taxpayers are likely left holding the “short end of the stick” in the forms of higher contribution rates and lower pension benefits.

December 21, 2022

Gallagher Acquires Buck

Arthur J. Gallagher & Co. will acquire the partnership interests of Buck (BCHR Holdings, L.P.). Buck is a leading provider of retirement, HR, and employee benefits consulting and administration services. The organization has a long history, dating back more than 100 years, with a diverse client base by both size and industry. It primarily serves customers throughout the U.S., Canada, and the UK. The complementary strengths of Buck's defined benefit offerings, investment consulting, digital employee engagement platform, and international footprint will broaden, deepen, and enhance Gallagher’s client offerings.

December 21, 2022

Empire Uses Medaca For Mental Health Disability

Empire Life has signed an agreement with Medaca Health Group to help people on disability leave due to a mental health condition feel better sooner. Medaca services provide employees with rapid access and treatment by workplace psychiatrists in Canada. "Delayed access to appropriate treatment can be devastating for individuals and their families," says Vanessa Lycos, vice-president of group product and marketing at Empire Life. "When conditions like depression and anxiety are left untreated, everyone suffers – at home and at work." Employee claims are sent to Medaca as soon as possible in the disability period. Each individual's case is carefully reviewed and, if an appointment with a psychiatrist is recommended, they will be seen within nine business days. Psychiatrists and family physicians then discuss a treatment plan to ensure recommendations are implemented quickly. The desired result is return to health and return to work.

December 21, 2022

Macroeconomic Challenges Help Private Debt

Private debt has benefited from macroeconomic challenges and is increasingly favoured by investors seeking diversification and a reliable income stream, says Preqin’s ‘Global Report 2023: Private Debt.’ Investors are continuing to deploy capital at a similar pace to 2021, which itself was a record-breaking year for private debt fundraising. Global private debt fundraising hit $172 billion by the end of the third quarter, with 137 private debt funds closed representing 80 per cent of the capital raised during the whole of 2021. Private debt has been one of the fastest-growing asset classes in recent years. Its data shows total assets under management (AuM) reached $1.2 trillion in 2021, growing at a compound annual growth rate (CAGR) of 15.7 per cent from 2015 to 2021. This was the third-highest AUM growth rate among alternative asset classes, after venture capital and infrastructure.

December 21, 2022

Canadian ETFs Gather Inflows

The ETFs industry in Canada gathered net inflows of US$3.34 billion during November, says ETFGI. This brings year-to-date net inflows to US$24.98 billion. During the month, assets invested in the ETFs industry in Canada increased by 7.4 per cent, from US$239 billion at the end of October to US$257 billion.

December 21, 2022

CPP Investments Invests In Redaptive

The Canada Pension Plan Investment Board (CPP Investments) has invested approximately US$200 million in Redaptive, an energy-as-a-service provider. Redaptive funds and installs energy-saving and energy-generating equipment to help organizations reduce energy waste, save money, lower their carbon emissions, and meet their sustainability goals.

December 21, 2022

Leemrijse Has New Role

Romeo Leemrijse is executive managing director, equities, at the Ontario Teachers' Pension Plan Board (Ontario Teachers') as of January 1, 2023. With more than 25 years of private equity and investment banking experience, he first joined Ontario Teachers' private capital team in 2006 and has worked on a number of significant transactions and portfolio companies including PODS, GFL, Dematic, and GNC.

December 21, 2022

Virtual EAP Discussed

The CPBI Pacific region will discuss ‘Virtual Care and EAP 101.’ Jon Bandringa, account executive, private sector, and Natasha Binkley, account executive, public sector, from TELUS Health Virtual Care; will discuss how virtual care and EFAP continue to impact the Canadian workplace, what the future may have in store, and why that matters to employers. It takes place January 12. Information is at https://www.cpbi-icra.ca/Events/Details/Pacific/2023/01-12-Virtual-Care-and-EAP-101

December 20, 2022

Stagflation Concerns Pension Plans

The potential for stagflation over the next two years is one of the biggest concerns for global public pension plans and sovereign wealth funds, says a report from the Official Monetary and Financial Institutions Forum. They expect a period of stagflation and will face huge challenges positioning their portfolios to cope with it. And they don’t expect inflation to disappear quickly. It says persistently high inflation is the top long-term concern of almost 50 per cent of global public funds surveyed. To prepare their portfolios for potential stagflation, pensions and sovereign wealth funds have created a ‘barbell approach’ that combines a ‘flight to safety’ with an allocation to alternative assets to provide an inflation hedge. Although fixed income and equities still accounted for more than three quarters of portfolios in 2021, these concerns have prompted more than 40 per cent of the funds surveyed look at increasing their allocations to real estate and infrastructure assets over the next two years.

December 20, 2022

Pay-For-Performance Needs Makeover

Employers in North America need to reshape their performance management efforts and pay-for-performance programs to give them a much-needed boost, says a survey by WTW. Its survey found just 26 per cent of North America employers reported being effective at both managing and paying for performance. Additionally, the gap between the priorities for performance management and delivering on those objectives is wide. For example, 93 per cent of respondents cited driving organization performance as a key objective for performance management, yet 44 per cent said their performance management program is meeting that objective. Similarly, 72 per cent said supporting the career development of their employees is a primary objective, but only 31 per cent said their performance management program was meeting that objective. “Employers have their work cut out to raise the bar on their performance management programs. Many recognize that their programs have not kept up with the changes due to the pandemic and tight labour market, yet they have not taken action. Ideally, employers will reshape their programs to correspond with new work styles and employee career aspirations and provide a better employee experience,” says Amy Sung, work and rewards global growth leader at WTW.

December 20, 2022

Real Estate Viewed With Pessimism

Preqin’s ‘Global Report 2023: Real Estate’ finds that the optimism for real estate at the end of 2021 is now replaced with a more pessimistic view for the year ahead. As interest rates are expected to increase further and asset values are falling, its analysts predict a difficult 2023 for real estate. Fundraising numbers dropped this year compared to 2021 with 249 funds closing at the end of the third quarter of 2022, equal to 46 per cent of the 546 funds closed throughout the whole of 2021. Its analysts expect the fourth quarter to bring an increase compared to the previous three quarters of 2022. However, they remain doubtful that the strength witnessed at the end of 2021 will be repeated this year.

December 20, 2022

Ontario Teachers’ Acquire 2degrees Tower Assets

Connexa and the Ontario Teachers’ Pension Plan have reached an agreement with 2degrees Mobile, an entity owned by managed funds of Macquarie Asset Management and Aware Super, to acquire 2degrees’ passive1 mobile telecommunications tower assets for NZ$1,076 million. Connexa was formed following the sale of a 70 per cent stake in Spark New Zealand’s passive mobile tower infrastructure assets to Ontario Teachers’ in July 2022. It currently owns and operates approximately 1,124 mobile towers located across Aotearoa New Zealand.

December 20, 2022

MacKay Joins Eckler

Thane MacKay is a senior director at Eckler in Atlantic Canada. He has 25 years of experience in actuarial consulting, with expertise in workers’ compensation programs and has worked with most territorial/ provincial workers’ compensation boards (WCBs) in Canada on funding sustainability reviews and pricing re-designs.

December 20, 2022

Healthcare Evolution Examined

‘The Evolution of Virtual Healthcare: Embracing Innovation & Bridging the Gaps’ is the focus of a CPBI South Alberta region session. It will outline how organizations are evolving to meet the health and wellness needs of a digital savvy work force. It takes place April 27. Information is at https://www.cpbi-icra.ca/Events/Details/Southern-Alberta/2023/04-27-The-Evolution-of-Virtual-Healthcare

December 19, 2022

Employers Maintain Remote Work Approaches

As the dust of the pandemic settles, over half of employers will maintain remote work options as 2023 approaches, says a report from the International Foundation of Employee Benefit Plans. According to the report, 74 per cent of employers offer hybrid work arrangements, 57 per cent offer flexible work hours, and 55 per cent offer remote work arrangements. With fewer employees in the office, at-work perks like coffee service, casual dress codes, and nap rooms are declining in popularity. Other benefits which are declining include coffee service, take your child to work day, flu shot programs, health risk assessments/screenings, and walking/exercise programs. Benefits on the rise include identity theft insurance, estate planning services, and paid leave to vote as well as more family-friendly offerings like paid adoption leave, paid leave related to a miscarriage , and paid maternity leave.

December 19, 2022