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June 14, 2022
FOCUS ON RETIREMENT DATES MISLEADS
Birthdates and retirement dates are linked and the focus on retirement dates especially with target date funds (TDF) has gone a little too far and could be misleading, says Mark Yamada, president and CEO at Pur Investing. He told the CPBI Forum 2022 session ‘Birthdates Should Not Drive DC Pension Plans’ that TDFs have several problems. To start, they ignore what people really want ‒ income replacement. Defined contribution plans take them right up to the door of retirement with capital accumulation and then leave them on their own. This is especially concerning as 60 per cent of the retirement income can come from investments after they retire. Instead, after they retire they are forced into high cost products that can “eat up” their savings. “Nobody knows how much fees consume in decumulation. That is a secret the industry wants to keep from the papers’” said Yamada. A goals based approach is a better option. These consider the members’ age and their accumulated capital to create personalized target income replacement and manage decumulation.
June 14, 2022
FLEXIBLE WORKING KEY BENEFIT
Looking ahead three years, flexible working and employee wellbeing are key future benefits for employers, says John Paul Augeri, managing director at Milliman. With Daniel Drolet, senior partner at Normandin Beaudry, he outlined some of the findings from the MBWL International and Normandin Beaudry ‘2022 Global Benefits Priorities Survey.’ In a tight talent market, he said employers are handling return to work carefully. Continuing to offer flexibility to employees, both in terms of the hours they work and where they do so, will be key as organizations transition to a hybrid working model going forward. Employee wellbeing is and will remain a key focus for global organizations. Drolet said, currently, the result from Canada show flexible work and healthcare/medical are rated the two most important benefits. However, over the next three years he expects mental and physical wellbeing will be the most important benefit followed by flexible work arrangements. Still, flexibility isn’t like offering a “cafeteria plan,” it is bringing flexibility into traditional plans so employees can find something that fits their needs whatever their age or gender. This makes data crucial now and in the coming years. It will need to be sliced and diced to understand what is happening, not to cut costs, but because control of these costs is important to reinvest in benefits plans.
June 14, 2022
DRUG PLAN MANAGEMENT MATTERS MORE THAN EVER
Proactive drug plan management matters more than ever, says Martin Chung, assistant vice-president, strategic health management, at Equitable Life of Canada. During the ‘Drug Trend Panel’ at ‘CPBI Forum 2022’ with Suzanne Lepage, a private health plan strategist, and Anar Dossa, director of pharmacy services at Pacific Blue Cross, he said there has be