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July 27, 2022

MONKEYPOX RISK RISES

Employers can apply many of the lessons learned from COVID-19 to monkeypox, says a Borden Ladner Gervais ‘Newsletter.’ The World Health Organization (WHO) has declared that the global monkeypox outbreak represents a public health emergency of international concern and potentially requires a co-ordinated international response. It says the risk of monkeypox is moderate globally, except in the European region where the risk is high. The Public Health Agency of Canada (PHAC) expects monkeypox cases to continue to rise as the outbreak evolves, with 681 confirmed cases across five provinces. Its symptoms are similar to those of smallpox patients, although it is clinically less severe. It can spread from person-to-person through direct contact with the infectious rash, scabs, or body fluids; respiratory secretions during prolonged, face-to-face contact, or during intimate physical contact, such as kissing; or touching items (such as clothing or linens) that previously touched the infectious rash or body fluids. Pregnant women can spread the virus to their fetus through the placenta. From the time symptoms start until the rash has fully healed can take two to four weeks with symptoms usually starting to show between six and 13 days after contact, but it can take up to 21 days. Symptoms include a rash on any part of the body that can be painful. The rash can be accompanied by fever, chills, swollen lymph nodes, headache, muscle pain, joint pain, back pain, and exhaustion. A person is contagious from the onset of the first symptoms until the scabs have fallen off on their own and the skin is healed. For employers, the limited supply of vaccines and therapeutics, at least for the near term, may very well mean that they will have to manage situations where employees are dealing with monkeypox, either themselves or someone in their household. Employers are not new to this as they have managed through COVID-19, but monkeypox is not the same and will have some unique considerations. Employers may need to remind employees of respiratory etiquette and hand hygiene, including covering coughs and sneezes with the bend of one’s arm or wearing a well-fitted mask; encourage sick employees to stay home with special consideration given to the lengthy timelines related to monkeypox symptoms and infectiousness; and perform routine environmental cleaning, including cleaning and disinfecting high-touch surfaces and objects. Employees who show up in the workplace appearing to have symptoms should be separated from other employees and/or, if appropriate, sent home without delay.

July 27, 2022

CANADIAN FUNDS BEST AT TRANSPARENCY

Canada leads the world when it comes to pension disclosure transparency, with the Canada Pension Plan Investment Board (CPP Investments) the world’s top-rated fund, says the Global Transparency Benchmark, a collaboration between CEM Benchmarking and Top1000funds.com. The latest benchmark, which examines the transparency of pension disclosures across the value-generating measures of cost, governance, performance, and responsible investing, shows of the 15 countries ranked, Canada had the highest overall score at 75. The Netherlands was next with a score of 69, followed by Sweden at 68. Canada and Netherlands ranked first and second, respectively, in 2021 as well. For the second consecutive year, Mexico had the lowest overall average. Canada’s top score was reflected in three Canadian pension funds ranking in the top five of the 75 organizations reviewed with the Public Sector Pension Investment Board (PSP Investments) ranked third and the Ontario Teachers’ Pension Plan fourth. Norway’s Government Pension Fund Global ranked second.

July 27, 2022

INFLATION NUMBERS NO SURPRISE

Despite inflation jumping to the highest rate in nearly four decades, the latest numbers are not a surprise, as the Bank of Canada (BoC) has been anticipating inflation to peak at around eight per cent in the third quarter, says Thomas Reithinger, fixed income portfolio manager at Capital Group, so it’s “right on target.” The numbers are further a positive sign for the market, which was anticipating a higher rate at around +8.4 per cent. “That the rate came in below the markets’ forecast will ease some anxieties and signals that we may be over the inflation hump,” he says. Looking ahead, inflation expectations will be important to watch, he says, as there is a risk of creating a potential feedback loop. “Labour market wage pressures will also continue to be a critical area to monitor as we move through this period,” says Reithinger.

July 27, 2022

PRIVATE EQUITY FUNDRAISING DECLINES

Private equity fundraising is on the decline and may slow further in coming quarters as institutional investors digest the impact of market sell-off, says Preqin. Its ‘Q2 2022 Private Equity Report’ shows the virtuous circle that has been driving private equity returns higher over the last several years is at risk of unwinding. Higher financing costs and the underperformance of technology in the new macro-economic environment may make it more challenging for private equity to continue its outperformance of public equity markets. Having said that, shorter term performance will appear more insulated from the market turmoil. With the exit environment expected to continue to weaken, fund lives are expected to extend going forward as distributions continue to slow.

July 27, 2022

KAURA HEADS AIMA COMMITTEE

Belle Kaura, vice-president legal and chief compliance officer at Third Eye Capital, will have a third term as chair of the AIMA Canada executive committee for the 2022-2024 term. Joining as deputy chair is Liam O’Sullivan, principal, co-head of client portfolio management, at RP Investment Advisors LP. Treasurer is Derek Hatoum, partner, PwC, and legal counsel is Darin Renton, partner, Stikeman Elliott LLP.

July 27, 2022

DIGITAL HEALTHCARE EXAMINED

‘Where Life Insurance & Digital Healthcare Meet’ and ‘Combat Turbulent Inflation’ will be among the topics discussed at ‘The Future of Insurance Canada 2022.’ Speakers include Valérie Lavoie, president and chief operating officer at Desjardins General Insurance Group; Megan Douglas, senior vice-president and chief brand and commercial officer for Saskatchewan Blue Cross; and Zahid Salman, CEO of Green Shield Canada. The Reuters event takes place September 13 and 14 in Toronto, ON. Information is at https://events.reutersevents.com/insurance/future-insurance-canada

July 26, 2022

CAP SPONSORS GET MORE RESPONSIBILITIES

The refreshed capital accumulation plan (CAP) guidelines include far more extensive listings of the responsibilities for sponsors and members, says Jason Vary, president of Actuarial Solutions Inc. For CAP sponsors, there are new explicit responsibilities for determining the key features of the CAP including automatic features to improve member outcomes such as auto-enrolment, auto-escalation of contributions, and auto-rebalancing of investments, and establishing a governance framework, plus consideration of fees for reasonableness and tangible benefits for members in terms of net investment returns. Notably, he says there is no longer a requirement in the guidelines for CAP sponsors to “ensure a range of investment options is made available.” The new guidelines also make a point to note that a large number of investment options is not necessarily a good thing with the added oversight burden and more complex decision-making for members. For a CAP with a primary purpose of retirement savings, his personal view is that overall member outcomes are optimized when they are not given any investment choices and simply put into a balanced fund or target-date fund based on their expected retirement age. For CAP members, there is new emphasis on their responsibilities to determine the contribution levels and decumulation options that suit their particular needs. The refreshed guidelines include a whole new section on educating and communicating with CAP members, including extensive listings of disclosure requirements. The emphasis appears to be ensuring that CAP members are well equipped to make decisions, have access to retirement planning tools, understand their potential projected retirement income, consider the impact of fees on their savings, and potentially facilitating financial planning advice for members. Finally, the guidelines now include explicit references to decumulation options and related considerations for sponsors and members. The comment deadline for this consultation is August 15 and he expects that a final version would be released shortly thereafter.

July 26, 2022

PENSION PLAN INVESTMENTS CONTRACT

Canadian Pension plan investments contracted during the second quarter of 2022 as both stock and bond markets observed significant declines for the period, says the Northern Trust Canada ‘Universe.’ The median Canadian Pension Plan was down 8.8 per cent for the quarter and 14.5 per cent year to date. The second quarter of 2022 proved to be a tumultuous period for the financial markets. As supply chains found pockets of recovery, a lingering backdrop of tight labour markets, higher wages, and soaring food and energy prices continued to stoke inflation, driving it to decade highs around the globe. Many major central banks, led by the Federal Reserve, pivoted to a more hawkish tone, initiating aggressive increases in policy interest rates at an accelerated pace in an effort to curb inflation. As markets digested the impact of a much tighter monetary policy environment, uncertainty coupled with volatility and negative investor sentiment prevailed, with major stock markets plunging into negative territory for the quarter. “The most recent quarter served as a reminder of how rapidly markets can shift course. We saw extreme market declines in the early days of the pandemic and now we are experiencing it again in the face of changing monetary policy. Although rising interest rates create market uncertainty causing a decline in pension assets, higher rates improve pension funding ratios and the overall financial health of pension plans, serving as a cushion through this volatile period,” says Katie Pries, president and CEO of Northern Trust Canada.

July 26, 2022

CFA SETTING STANDARD FOR OCIOS

The CFA Institute is looking to measure the track record of OCIOs (outsourced chief investment officers) so investment firms worldwide can deliver full disclosure and fair representation of financial performance. It has put together a 15-member working group to create a global investment performance standard that can assess how OCIOs perform. It hopes to deliver a framework in early 2023. The OCIO space has expanded to an estimated $2.7 trillion this year from $90 billion in 2007.

July 26, 2022

INVESTORS SEEK SAFETY

Yield, low vol, and value generally fared best in the turbulent second quarter as investors sought safety in steadier, dividend-paying stocks and fled pricier growth stocks, says a FTSE Russell ‘Market Maps’ report. Factor returns swung to avoid growth-stock carnage. Avoiding the severe downdrafts in expensive consumer discretionary and technology industries was a prominent driver of factor outperformance in most markets. In the UK, size took a pounding as factor return patterns deviated from those of global peers, reflecting the market’s bigger tilt to large cap staples and energy stocks and tiny exposure to tech. As well, in a sharp U-turn from the first quarter, nearly all emerging market factors lagged in quarter two. Unlike elsewhere, yield and low vol retreated, hurt by their underexposure to outlier gains in discretionary stocks.

July 26, 2022

KRY GETS ONTARIO TEACHERS’ FUNDING

Kry has secured over $160 million in funding from a combination of new and existing partners, including Teachers’ Venture Growth (part of the Ontario Teachers’ Pension Plan). Working in partnership with healthcare professionals, governments, and partners across Europe, Kry improves patient access to both primary and specialist care via its technology and physical care centers. The funding will support its strategy to embed digital into the backbone of healthcare systems in Europe and improve care for millions of patients.

July 26, 2022

TIME OF REMEMBRANCE PLANNED FOR BPM FOUNDING PUBLISHER

A Time of Remembrance will be held Saturday, July 30, for John L. McLaine, co-founder, publisher, and editorial director of Benefits and Pensions Monitor (BPM) who died after an accident in his Ancaster, ON, home July 21. The 75-year-old McLaine was with Powershift Communications, publisher of the magazine, from December 1991 to September 2015 when he retired. In an article in the December 2021 issue marking the 30th anniversary of the magazine, he described how it came to be. Looking for a new challenge with Brian McKerchar, chief executive officer of Powershift Communications Inc., they started the magazine with the intent on making a difference in delivery of information to the benefits and pensions industry. Curiously, the two had also founded the first Canadian magazine in the field while employed at Maclean Hunter just 15 years earlier. Since retiring, he and his wife of 12 years, Donna, enjoyed spending time with friends and family in Ancaster, ON. They both shared a love for gardening and music. McLaine had joined two chamber music choirs, saying “apparently ‘tenors’ are in short supply these days.” A car aficiando, he was a member of several antique and sports car clubs where he enjoyed his association with fellow enthusiasts and driving his modest collection of special interest vehicles. Born in Toronto, August 24, 1946, he attended Malvern Collegiate before graduating from the Business School at Ryerson University (now Toronto Metropolitan University).

The Time of Remembrance will be held at the Dodsworth & Brown Funeral Home, 378 Wilson St. E., Ancaster, ON. on Saturday, July 30, from 2 to 4 p.m. with a Celebration of Life to be followed in the Chapel at 4 p.m. In John’s memory, donations to your charity of choice will be appreciated by the family.

July 25, 2022

TWO-TIER HEALTHCARE WORKS ELSEWHERE

The evidence from around the world demonstrates that it is possible to hold onto the key priority of the healthcare system – universal care for all – and introduce private services and private health insurance to support that priority, says Raymond Rupert, CEO of RCM Health Consultancy Inc. This makes a British Columbia court’s decision denying access to private health seemingly based on a “misguided notion and misinformation,” he says. Looking at other health systems shows there are many different ways that this, in fact, can work. While the concept of ‘two-tier healthcare’ carries a very negative connotation in Canada’s health policy discourse, other countries have been very successful using a combined private-public approach while ensuring universality. In the European Union, 25 countries offer universal healthcare, similar to Canada, which includes a government-regulated network of private health insurance companies. Australia provides universal coverage to all residents. However unlike Canadians, Australians can purchase private health insurance that allows for faster access to non-emergency services and greater selection of healthcare providers. It made the decision in the 1970s that private dollars would fund private infrastructure to increase total healthcare capacity and it worked. Not only can private insurers act as key partners to ensure universal health insurance coverage, he says they’re a common feature in many of the countries that don’t experience the excessive wait times and lack of capacity or poor service that plagues Canada’s healthcare system.

July 25, 2022

COVID TIME-OFF EXTENDED

Employers should be aware of imminent changes to an employee’s entitlements to the Infectious Disease Emergency Leave (IDEL), made under the Employment Standards Act, 2000 (ESA) in response to the COVID-19 pandemic, says a Hicks Morley ‘FTR Now.’ The Ontario government is extending entitlement to the three days of paid IDEL for eligible employees until March 31, 2023. It was previously set to expire July 31. Paid IDEL is a form of paid leave available under the ESA (Employment Standards Act) where an employee is unable to work for reasons related to COVID-19, including, for example, when an employee is under individual medical investigation, supervision, or treatment or when an employee is required to provide care or support to a specified family member. Eligible employees are entitled to a maximum of three days of paid IDEL, although the number of days may have been reduced depending on an employee’s contractual entitlements. Employers seeking reimbursement for paid IDEL may continue to submit claims to the Workplace Safety and Insurance Board for reimbursement of up to $200 per day for three days each employee takes.

July 25, 2022

CONSULTATIONS START ON ISSB CLIMATE STANDARD

While the creation of the International Sustainability Standards Board (ISSB) with its mandate of creating a global standard for a whole range of consistent and comparable sustainability-related financial disclosures is one of the key outcomes from COP26 in Glasgow, UK, it is too early to know if key jurisdictions like the EU, the U.S., and Canada will incorporate these standards into policy and rulemaking, say Paula Glick and Liz Simmie, co-founders of Honeytree Investment Management. In April, the ISSB released its first consultations setting out general sustainability-related disclosure requirements and climate-related disclosure requirements. The idea is to create sustainability-related disclosures that investors can treat with the same confidence as corporate financial statements. The standards aren’t without some controversy, they say. They are very tightly focused on issues that are financially material and are thus, debatably, not sufficiently concerned with how a company’s activities affect broader environmental and social issues. However, these standards could serve as a building block for other standards that go beyond strict considerations of financial materiality. They are excited to imagine a time when there are consistent, comparable, mandated sustainability disclosures. However, it will be imperative for the various standard setters to work together to ensure that standards are globally consistent and interoperable. “Given the historic opportunity before us, to do anything less will be a failure and would be tantamount to a regulatory failure,” they say.

July 25, 2022

EMPLOYEES WANT RETIREMENT PLANNING HELP

Nearly three out of four U.S. respondents with an employer-sponsored retirement plan say their employer’s plan is their primary vehicle to save for retirement, says the ‘2022 Global Benefits Attitudes Survey’ by WTW. Among those respondents, 69 per cent say their retirement plan meets their needs. However, many would like more help from their employers. In fact, 44 per cent of all employees ranked retirement in the top three issues they most want their employers to focus on. Overall, 69 per cent of employees surveyed recognize they are not saving enough for retirement. Additionally, people closer to retirement are more likely than before the COVID-19 pandemic to say they will retire beyond the age of 70.

July 25, 2022

VENTURE CAPITAL MOST EXPOSED

With global markets experiencing a huge amount of turmoil during 2022, venture capital could be the private capital asset class most exposed, says Preqin in its ‘Q2 2022 Venture Capital Report.’ Concerns over start-ups’ high cash burn rate and limited exit options caused by the global equity sell-off are extending funds’ holding periods and slowing capital distributions. This has created the knock-on effect of weakening fundraising. The number of funds closed was down by 56.4 per cent in the second quarter compared with the same period last year. Meanwhile, aggregate capital raised fell by nine per cent, compared to the same quarter last year. This strength is unlikely to continue into the second half of the year, it says, as hold periods extend and distributions slow.

July 25, 2022

OMERS ACQUIRES BIONIC

OMERS Private Equity will acquire Bionic, a provider of essential energy, insurance, finance, and connectivity services to UK small-to-medium enterprises (SMEs), from ECI Partners and its founders. With a majority stake in the company, it will provide resources and expertise to help drive the company’s organic growth as well as further accelerate its strategic expansion through mergers and acquisitions. Founded in 2007, Bionic matches SME business owners with energy, insurance, connectivity, telecoms, and commercial finance solutions from its platform of specially selected providers, suppliers, and products.