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BPM Lastest Issue

BPM Lastest Issue

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June 21, 2022

INFLATION DELAYS RETIREMENT

Half of older Canadians (54 per cent) have delayed retirement because of mounting inflation and the cost of living this year alone, says a report commissioned by Bromwich+Smith and Advisorsavvy. ‘Retirement Interrupted’ shows four-in-10 Canadians aged 55 and older have delayed (or plan to delay) their retirement because they have too much debt, while 62 per cent have delayed retirement because they don’t have enough savings or investments. Others have to provide financial support to children. However, 23 per cent have delayed retirement because they love their job. “Canadians are all feeling a bit exhausted from the last two years between multiple waves of COVID-19 and a tattered economy,” says Laurie Campbell, director, client financial wellness, at Bromwich+Smith. “For those close to retirement, 2022 might seem like the best year to do so. But with inflation still high and bank accounts and retirement savings being depleted, it might be wise to ask yourself, can I retire in 2022?”

June 21, 2022

FRONTLOADING HIKES COULD EASE LANDING

Frontloading rate hikes might make it easier to curb inflation and achieve a “soft landing,” says Kristina Hooper, Invesco’s chief global market strategist. At its June meeting, the U.S. Federal Reserve decided it needed a “bigger boat” to fight inflation. That took the form of a 75 basis point rate hike and more aggressive expectations for future hikes. The rationale was, not just the most recent Consumer Price Index print, but also an increase in longer-term consumer inflation expectations. While it is “getting harder” to get a “soft landing,” she says it still possible. She believes inflation will peak soon and slowly moderate for Western developed economies. However, the only factor that central banks can control is demand; there are external factors, such as the Russia-Ukraine war and COVID shutdowns in China, that could have a significant impact.

June 21, 2022

UTAM RETURNS AS CDP SIGNATORY

For the third year running, UTAM is a signatory to CDP’s Science-Based Targets Campaign. The campaign co-ordinates global asset owners and major corporate buyers to call on companies to set science-based reduction targets (SBTs) for greenhouse gas (GHG) emissions. The initiative seeks to incentivize high-impact companies to reduce GHG emissions and accelerate the decarbonization of the real economy. This year, CDP anticipates targeting approximately 1,200 companies with combined GHG emissions of more than 22 gigatonnes.

June 21, 2022

EQUITABLE MOVES TO TELUS

Equitable Life of Canada has switched to TELUS Health eClaims to support direct digital billing of paramedical and vision claims adjudication for its plan members. This shift will allow Equitable Life to continue to process most eligible claims immediately and pay the provider directly, while minimizing out-of-pocket costs for plan members. Further, plan members will be able to process claims from a broader list of allied healthcare professionals. Digital claims adjudication allows healthcare providers such as optometrists, massage therapists, and chiropractors to submit claims on behalf of their patients directly from their office in real-time. TELUS Health already provided its digital pharmacy claims.

June 21, 2022

STA/STC GROWS WITH ACQUISITION

Student Transportation of America/Student Transportation of Canada (STA/STC), North America’s third-largest provider of school bus transportation services, has completed its acquisition of Pacific Western Transportation (PWT), the largest privately-owned transportation company in Canada. STA/STC’s controlling shareholder, Caisse de dépôt et placement du Québec (CDPQ), and its minority shareholder, Ullico, both reinvested in the company to support its growth through acquisition strategy. Pacific Western provides school bus, employee, transit, and coach transportation services to customers throughout British Columbia, Alberta, Saskatchewan, Ontario, Nova Scotia, and Yukon.

June 21, 2022

PAPADIMITRIOU JOINS SOBEYS

Peter Papadimitriou is director of benefits and relocation at Sobeys. Most recently, he was director of total rewards and HR technology at Symcor.

June 21, 2022

BENEFITS INFORMATION PROVIDED

The ‘32nd Annual Health Benefits Conference & Expo (HBCE)’ provides information plan sponsors can use to reduce healthcare costs and improve employee engagement. The International Foundation of Employee Benefit Plans event takes place January 30 to February 1, 2023, in Clearwater Beach, FL. Information is at https://www.ifebp.org/hbce/Pages/health-benefits-conference-and-expo.aspx#topics

June 20, 2022

STELCO PENSIONS SECURED

Pension benefits have been fully secured for the 7,114 members of United Steel Workers Local 1005 in Hamilton, ON. The plan administrator, LifeWorks (Canada) Ltd., has purchased buy-in annuity contracts with two insurance companies valued at $1.331 billion. This deal ensures that all plan members will continue to receive their full benefits without interruption. In 2017, the Financial Services Commission of Ontario (FSCO) appointed Morneau Shepell Ltd. (now LifeWorks), as plan administrator to oversee Stelco’s five ongoing legacy defined benefit pension plans, following Stelco’s restructuring plan under the Companies’ Creditors Arrangement Act (CCAA) in 2016. Of Stelco’s five defined benefit pension plans, this is the second plan that has purchased annuities to secure member benefits. The three remaining plans are working toward the same outcome.

June 20, 2022

‘RIGHT TO DISCONNECT’ SERVES AS ATTRACTION TOOL

Setting expectations and boundaries protects workers’ mental health and may attract talent to the companies who have policies that comply with Ontario’s ‘Right to Disconnect’ legislation, says Christopher Achkar, a principal lawyer at Achkar Law. ‘The Right to Disconnect’ became effective on June 2. Employers are required to create a ‘Right to Disconnect’ policy in workplaces with 25 or more employees. He says, “The policy creates expectations and boundaries for employers and employees, helping separate work and home life.” It defines disconnecting from work as not engaging in work-related communications, to properly disconnect from work for the day. Currently, the legislation does not explicitly say what a policy must contain, but employers should keep an eye out for any updates or changes. “This legislation is a warning to everyone,” says Achkar, “All employers should have a ‘Right to Disconnect’ policy, even if they do not reach the minimum employee threshold, to avoid the potential for employee burnout.”

June 20, 2022

ACPM AGREES WITH DATE CRITERION

The Association of Canadian Pension Management (ACPM) agrees with the concept of providing guidance to determine an amalgamation date or split date of merging pension plans. However, in its submission on the Accounting Standards Board’s ‘Pension Plans Exposure Draft March 2022,’ it says a criterion which requires consideration for the actual transfers of assets and liabilities should not be a consideration as this is not aligned with the principles of accrual accounting that underpin the preparation of financial statements in accordance with generally accepted accounting principles. Applying such a criterion would, says ACPM, result in a cash-basis approach that differs from the basis of accounting which requires pension plan financial statements to be prepared using the accrual basis of accounting. It does appreciate that certain legal arrangements may not allow for the right to the assets and liabilities to be assumed until such time that the actual assets and liabilities have been transferred. As such, it says the exposure draft’s guidance is too prescriptive and could result in inappropriate accounting.

June 20, 2022

ENVIRONMENT DIFFICULT FOR REST OF YEAR

The war in Ukraine, COVID-19 lockdowns in China, and central bank monetary tightening are likely to keep the investing environment difficult for the second half of 2022, says T. Rowe Price’s mid-year market outlook for 2022. In the near term, the war will likely continue to impact global commodity markets, keeping food and gas prices high, but over the longer term it could accelerate the shift to renewable energy. Rising interest rates punished equity valuations in the first half and rising economic concerns could lead to a slowdown in corporate earnings and put further pressure on stock prices. It warns inflation can trigger a growth shock, given that higher energy and food prices are, in effect, a tax on consumers who are the main engine of global economic growth. With interest rates rising, continued earnings gains will be needed to support positive equity returns, but higher wage and input costs could cut into profit margins and inflation raises the risk that the Fed will hike rates too aggressively, increasing the cost of capital and causing a recession. Some investors now question whether inflation has already peaked. There have been anecdotal signs in some markets that price pressures are easing – such as a slowdown in home price appreciation and cooling demand for labour, it says.

June 20, 2022

INSTITUTIONS SUPPORTING ESG

A large portion of the increasing support for ESG (environmental, social, and governance) issues comes from institutional investors, says a research paper published in the University of California-Davis Business Law Journal. It says investors have raised ESG-focused shareholder proposals for decades at annual company meetings in the U.S., but until recently, these proposals rarely made their way to implementation. At an annual meeting, a company’s investors typically have one vote per share of stock in the company. For a shareholder proposal to pass, 50 per cent of investors must vote in favour of the proposal. The paper says from 2006 to 2015, only four ESG shareholder proposals at companies in the Fortune 250 passed with majority votes. But in recent years, institutional interest in ESG proposals has undergone a dramatic transformation. From 2016 to 2021, 41 ESG shareholder proposals passed. It attributes the spike in successful ESG shareholder proposals to support from institutional investors, specifically smaller institutional investors.

June 20, 2022

GLOBAL ETFS SEE INFLOWS

The global ETFs industry gathered net inflows of US$80.28 billion during May, bringing year-to-date net inflows to US$417.87 billion, says ETFGI. During May, assets invested globally in the ETFs industry increased by one per cent, from US$9.36 trillion at the end of April to US$9.46 trillion.

June 20, 2022

ESG PROPERTIES LEAD WAY

Across different segments of the European real estate sector, industrial properties such as warehouses and manufacturing sites lead the way when it comes to ESG (environmental, social, and governance) performance, says research by Deepki. Two thirds (62 per cent) of respondents rated the ESG performance of the industrial sector as good or very good, followed by leisure (61 per cent) and retail (60 per cent). This compares to logistics and office real estate which had the lowest ‘positive’ rating of 47 per cent and 44 per cent respectively. Vincent Bryant, CEO and co-founder of Deepki, says, “Pension funds are becoming highly active when it comes to improving the ESG performance of their assets and commercial real estate is no exception.”

June 20, 2022

CDPQ INVESTS IN HEAVY EQUIPMENT MAKER

The Fonds de solidarité FTQ and the Caisse de dépôt et placement du Québec (CDPQ) are making an equity investment in GRYB, a heavy equipment manufacturer in Victoriaville, QC. It will enable the company to pursue its expansion plan and acquire RAD Technologies, Dalkotech, and Eco-trak. These acquisitions will provide GRYB with a doorway to the OEM (original equipment manufacturer) market as well as a high-tech product line (Eco-trak).

June 20, 2022

ORR HAS NEW ROLE

Nadine Orr is senior vice-president, reinsurance and group solutions, at RBC Insurance. She joined the line of business in 2019 from RBC where she was vice-president, pensions and benefits.

June 20, 2022

COMMUNICATION AND TECHNOLOGY EXAMINED

The International Foundation of Employee Benefit Plans’ ‘Benefit Communication and Technology Institute’ will address topical concerns such as ‘Using Benefits to Counter the Great Resignation,’ ‘Mental Health in the Post-pandemic World,’ and ‘Communicating Cybersecurity Issues. It takes place July 18 and 19 in Boston, MA. Information is at https://www.ifebp.org/education/schedule/Pages/benefit-communication-and-technology-institute-2217.aspx?utm_campaign=EDPG_061522_BenComm_GeoTarget&utm_medium=email&utm_source=Eloqua

June 17, 2022

TELUS ACQUIRES LIFEWORKS

TELUS Corporation is acquiring LifeWorks, Inc. Darren Entwistle, president and CEO of TELUS, says this will “enable us to combine the respective skills and capabilities of LifeWorks and TELUS Health, creating a global, end-to-end, digital-first employee preventative and mental health and wellness platform covering more than 50 million lives.” This includes complementing LifeWorks’ international relationships with TELUS International’s expertise in digital transformation and client service to extend its offerings to customers well beyond Canada. It also enables it to respond to the unprecedented shift in what is needed to support employers in addressing the evolving health and wellness needs of employees and their families, including a greater focus on supporting mental health. The traditional EFAP industry faces increasing pressure to keep up with the rapid pace of change, while seeing increased competition from upstarts that offer scalable, digital-first solutions available wherever an employee may be working, that are able to address the realities facing the modern workforce.

June 17, 2022

DIVERSITY BOOSTS SENSE OF WELLBEING

Canadians identifying with three or more dimensions of diversity (e.g., gender, sexual identity, racial identity) have a sense of wellbeing at work that is 42 per cent greater than their non-diverse peers, says a study by Sidekick and Humanity. The inaugural ‘Wellbeing at Work Report’ attempts to understand the reality faced by Canadians at work, and what can be done to create engaging workplaces that foster innovation, growth, and transformative experiences. Even though Canadians who identify with at least one of the 11 dimensions of diversity report a higher wellbeing score from their work, almost half (45 per cent) of the same group don’t feel they belong at their company. It also shows 62 per cent of Canadians feel they’re part of a team at work, but only 45 per cent say someone has talked to them about their progress at work. For Canadians who agree that the values of their organization mirror their own, their wellbeing score is 50 per cent, double the average Canadian’s score of 24 per cent. As well, when discussing wellbeing with Canadians who identify as racially diverse, collaborative environments provided opportunities to break down barriers that otherwise divide communities. These spaces are seen as arenas where “you can’t be ignored.”

June 17, 2022

OPTRUST ESTABLISHES ESG DATA PROGRAM

OPTrust established a new ESG (environmental, social, and governance) data program to enhance tracking and understanding of RI (responsible investing) performance across the total fund. ‘Responsible Investing Report ‒ A Collective Commitment’ details its 2021 responsible investing (RI) activities, including strengthening its ESG capabilities, advocating for improved sustainability and transparency in financial markets, and investing in climate solutions. It engaged 410 companies on key ESG issues and voted at 1,744 company meetings in 51 countries last year. It also did advanced work on climate strategy renewal for release in the fall of 2022. “Our RI program was first established 15 years ago and has become integral to our ability to provide sustainable pension security for our members,” says Peter Lindley, president and chief executive officer at OPTrust. “As the world grapples with a highly complex transition to net zero, addressing plan sustainability requires addressing climate sustainability among other ESG concerns. Our ambition is to fully embed climate considerations into the way we do business across all functions.” In 2021, it formed a cross-organizational climate response working group to develop an enhanced, comprehensive strategy to address climate change. Work on the renewed strategy includes identifying climate risks and mitigation plans across asset classes, as well as conducting top-down climate scenario analysis to identify potential impacts on its funded status.

June 17, 2022