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Daily News Alerts

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January 18, 2023

High Belonging Prompts Positive Wellbeing

A LifeSpeak Inc. research study has uncovered a connection between high belonging scores and positive wellbeing outcomes. "The hiring and retention trends of recent years have made it clear that individuals want more from their employers than just a paycheck. Employees are making job choices based on an alignment of values and cultural factors, such as diversity, inclusion, and support for wellbeing and a balanced life," says Michael Held, founder and CEO of LifeSpeak. "Our latest research underscores these trends and suggests that by focusing on creating a healthy culture and supporting whole-person wellbeing, employers can create a sense of belonging that has a ripple effect of positive health and business outcomes." It found, for example, employees with low belonging scores are 59 per cent more likely to consider quitting their job due to mental health concerns. As well, 61 per cent of employees with low belonging scores said their employer ‘doesn't prioritize their wellbeing.’ Women are 30 per cent more likely than men to say their employer doesn't offer a culture of health and wellbeing and working mothers are three times more likely to feel unsure about talking about mental health in the workplace. The study shows that companies that follow workplace wellbeing best practices report that employees are more productive, prospective employees are easier to recruit, and their workforce is more likely to be highly engaged.

January 18, 2023

Age-Related LTD Restriction Justified

An arbitrator has found that the age-based restriction under long-term disability plans incorporated into the parties’ collective agreement is justified under the Charter of Rights and Freedoms, says Alyson Frankie, an associate in the pensions and benefits group at Stikeman Elliott. In ‘Rayonier v. Unifor, Locals 256 and 89,’ the union charged that by ceasing LTD coverage for employees aged 65 and older, the employer was discriminating against employees on the basis of age. However, the decision noted that the rights and freedoms set out in the charter guarantees are subject to reasonable limits which can be justified in a free and democratic society. In determining that the age 65 limit for LTD coverage was reasonably justified, it noted that at that age, employees become eligible for an unreduced pension under the employer-sponsored pension plan as well as the Canada Pension Plan. As such, it has a minimal impact on any affected workers because other benefits are available to workers aged 65 and older. As well, the vast majority of bargaining unit members retire at an average age 60 and few individuals work past age 65. The evidence also indicated that no insurers offer LTD without any age restriction and that 99 per cent of available LTD plans have a cut-off age of 65.

January 18, 2023

Productivity Needed For GDP Growth

As employment growth slows or goes into reverse in most developed economies, GDP growth will have to increasingly come by way of productivity gains, says RBC Harbour Group. For equity investing, this raises a number of issues. To start, there would be even greater intensity of corporate competition. When the total economic pie is growing more slowly than it has been, then each individual business has to work that much harder to maintain its share of the pie let alone gain share. In such a scrap the biggest and strongest will likely come out on top, but the second- and third-tier competitors are not going to simply lie there and accept their fate. A second inevitable consequence of an extended stretch of much slower growth would be more protectionism. That trend emerged in the last half of the prior decade and now a growing list of countries and companies, shaken by the unexpected fragility of global supply chains, are moving toward mandating and building out greater domestic capacity for everything from vaccines and other biotechnologies to computer chips and defense procurements. Building more domestic capacity may be good for capital spending for a few years, but any response of restrictive trade barriers could take a toll on the sales and foreign earnings of exporters and multinationals.

January 18, 2023

Acera And Fairfield Watson Merge

Acera Insurance has merged operations with Fairfield Watson, an employee benefits, retirement, and insurance consultant. Fairfield Watson will become Acera Benefits. The two have a long history of collaboration and partnership as members of the Benefits Alliance, a national organization consisting of independent firms who administer over 8,000 employee benefit plans. The merging of operations supports the company’s overall vision for growth and scale while strengthening its commitment to independence and providing Canadians and businesses with tailored insurance, group benefits, and risk mitigation solutions. Acera’s nationwide group of companies include brokerages across Alberta, British Columbia, Ontario, and the Yukon.

January 18, 2023

Canadian ETF Inflows Slip

The ETFs industry in Canada gathered net inflows of US$6.01 billion during December, bringing year-to-date net inflows to US$30.85 billion, says ETFGI. During the month, Canadian ETF assets decreased by 2.6 per cent, from US$256 billion at the end of November to US$250 billion.

January 18, 2023

Vo Becomes Actuary

Michael Vo (FSA) is an actuary at Empire Life. He joined the organization in 2021 from WTW where he was a senior actuarial analyst.

January 18, 2023

CAP Trends Examined

Mercer’s Neil Lloyd, a partner and western Canada wealth leader, and Dasha Zuck, an investment consultant, will discuss current trends and some future developments impacting capital accumulation plans (CAPs), their members, and the companies that sponsor these arrangements at the CPBI Pacific ‘DC Pension Plans Update’ session. It takes place March 9. Information is at https://www.cpbi-icra.ca/Events/Details/Pacific/2023/03-09-DC-Pension-Plans-Update

January 17, 2023

Reversal Of RBB Decision Needed

The Pension Investment Association of Canada (PIAC) is calling on Finance Canada to reverse its decision to cease the issuance of real return bonds (RRBs). It says the announcement in the fall economic statement to immediately cease the issuance of real return bonds was made without consultation or warning and impacts its members’ ability to responsibly invest and manage the pension entitlements of Canadians. As long-term investors responsible for managing long-term liabilities, pension plans are logical purchasers of RRBs. Many pension plans pay a pension benefit that is indexed to inflation so that pensioners maintain their purchasing power. For those plans choosing to buy and hold RRBs, it can serve as a valuable investment tool to keep up with the need to pay out indexed pensions. In the current inflationary environment, RRBs have a heightened significance as a tool for pension plans to meet their obligations to their members. It says the decision to cease the issuance of RRBs was made based on consultations that led the department of finance to conclude that there was low demand for them. While RRBs have typically exhibited a lower level of liquidity than nominal bonds, it does not mean that there is low demand for the product. Institutional investors for RRBs typically use RRBs as part of a buy and hold strategy, for the purpose of matching cash flows against future benefit payments indexed to inflation. It would be a mischaracterization to state that limited liquidity equals a general lack of demand, it says.

January 17, 2023

Human Resources Has Dual Role

When a recession hits, human resources plays a dual role, says a McLean & Company report. ‘Optimize HR Department Costs to Prepare for a Recession’ says working with senior leaders on organization-wide cost-cutting initiatives is typically the dominant focus, but HR needs to prepare for cost optimization initiatives within its own department as well. This ensures organizational budgetary goals are achieved while also positioning the HR department for a quick recovery post-recession, supporting both short-term and long-term organizational goals. To create a recession-responsive cost optimization plan, it says the first step includes conducting a SWOT (strengths, weaknesses, opportunities, and threats) analysis, identifying the organization's business context and HR response mode, listing cost optimization constraints and parameters, and setting cost optimization goals. Step two calls for discovering HR initiative cost optimization opportunities, unearthing workforce optimization initiatives, and identifying vendor management cost optimization initiatives. The final step requires establishing a prioritized and aligned cost optimization roadmap, developing a communications plan, and creating an executive presentation about the roadmap that focuses on the essentials. Rachel Stewart, practice lead, HR research and advisory services at McLean & Company, says, "In a recession, HR will likely find itself operating in reactive mode. While HR can return to proactive and strategic cost optimization opportunities later, when conditions improve, decisive action on reactive measures must be taken now."

January 17, 2023

Canadian Investors Could Ride Out Volatility

While consensus forecasts are for a mild recession in Canada in 2023, HSBC Canada Asset Management’s ‘Outlook for January 2023’ says there are still many factors that point to avoiding a deeper recession. On balance, it sees Canadian investors weathering the current volatility better than most because of a continuing strong job market, high consumer savings levels, robust commodity prices, and solid corporate earnings. The global earnings picture is less positive in many markets outside Canada, it says. Around the world, economic momentum continues to slow, with the Eurozone and UK in recession, U.S. growth well below normal, and China’s 2023 recovery likely to be shallow. From a cyclical perspective, it foresees a possible bottoming of global economic data around the second or third quarters of the year, but little upward economic momentum from there. On the earnings side, consensus forecasts need to come down further, but once analysts forecast zero earnings growth or a small earnings recession, and earnings momentum stabilizes, this could be the signal for markets that enough pessimism is priced in. This would be a key milestone allowing investors to add back equities and take a less defensive sector stance, it says.

January 17, 2023

ETF Inflows Drop

The global ETF industry gathered US$69.37 billion in net inflows during December, bringing year-to-date net inflows to US$856.16 billion, says ETFGI. During December 2022, assets invested globally in the ETF/ETP industry decreased by 2.7 per cent, from US$9.48 trillion at the end of November to US$9.23 trillion.

January 17, 2023

Labrosse Joins WTW

Benoit Labrosse is senior director, retirement, at WTW. Most recently, he was a partner, investment and risk, at LifeWorks (formerly Morneau Shepell).

January 17, 2023

Capital Markets Assumptions Offered

‘Future Forward: Invesco’s Latest Capital Markets Assumptions’ will feature the Invesco investment solutions team as they share their 2023 outlook at a Benefits and Pensions Monitor Meetings & Events session. Paisley Nardini, strategist, and Drew Thornton, head of thought leadership, Invesco Investment Solutions, will provide return insights and implementation ideas on topics such as revisiting asset allocations given the rise in yields, the opportunity cost across public and private assets, and increasing the chance of success when investing in private markets. It takes place January 19. Information is at https://www.bpmmagazine.com/webinars

January 16, 2023

Further Rate Hikes Possible

The current tightness in many labour markets worldwide and elevated but gradually declining inflation present continued monetary policy challenges, says an AIMCo ‘Economic Outlook.’ Various developed market central banks may have further to go in their respective rate hiking cycles before pausing to assess their slowing effects on demand and price trends. Key to this year’s global growth is the extent to which China will reopen its domestic economy. Moreover, in Canada and the U.S., while a recession is plausible, a continued mild stagflation in 2023, instead, is also a likely economic outcome. Overall, the uncertainty related to the likelihood of a recession, interest rate decisions, and China’s reopening are expected to drive volatility in global markets. This, in turn, potentially sets the stage for attractive, select investments in the diversified client portfolio AIMCo manages.

January 16, 2023

Understanding Of Longevity Lacking

More than one-half of American adults lack a basic understanding of how long people tend to live in retirement, a knowledge gap that can keep them from saving enough money to l