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News Archives - April / May 2007

Thursday, May 31, 2007

Event-driven Performs Best

The event-driven hedge fund strategy, which includes the distressed, multi-strategy, and risk arbitrage sub-sectors, was the top performing sector over the past 12 months, returning 15.6 per cent, says Credit Suisse Index Co. Inc. The event-driven sector has benefited from a wide range of opportunities directly related to corporate capital structures presented in all market cycles. Event-driven hedge fund managers can shift exposures based upon opportunities in merger and acquisition activity, global market conditions, distressed corporate situations, and other corporate activities to produce attractive returns across both short- and long-term investment horizons

Assessments Replace AIR Fees

The Financial Services Commission of Ontario (FSCO) is introducing a new pension assessment process to provide a more effective means of recovering pension sector costs. This assessment process replaces the Annual Information Return (AIR) filing fee. It focuses on ensuring an accurate recovery of pension sector expenditures and minimizing the likelihood of a surplus or a shortfall in the assessment of pension sector costs. Mark Newton, of Heenan Blaikie, says the annual filing fees could change significantly year-to-year, resulting in less predictability on the part of pension plan administrators, thereby adding another disincentive to establishing pension plans. This is yet another example of regulators not encouraging the establishment and maintenance of pension plans, he says.

GIPS 101 Planned

A GIPs 101 seminar will take place June 5 in Toronto. This ICAC session will provide an overview of GIPS and look at the differences between the GIPS and AIMR Presentation Standards. It starts at 1 p.m. For more information, contact Deborah Pape at


Wednesday, May 30, 2007

Merger Excites CIBC Mellon

“We're very excited about the proposed merger between Mellon and The Bank of New York,” says Tom MacMillan, president and CEO of CIBC Mellon. Once the transaction closes, CIBC Mellon will be a part of the world's largest global custodian, with more than $18 trillion in assets under custody and administration. “We anticipate that CIBC Mellon will have access to additional products and services – giving us the opportunity to provide enhanced offerings to our clients,” says MacMillan. However, he says there will be no change in structure and business lines at CIBC Mellon as a result of the merger.

Officers Outline Fraud

Senior RCMP officials used insurance and pension contributions from employees to cover the cost of administering the benefits plan, a committee of MPs has been told. Federal funds, not funds from the pension plan, were supposed to be used for administration costs of the plan. Staff Sergeant Mike Frizzell, who led the original investigation, said when he questioned the costs and why the contract was being run as a sub-contract with the RCMP's insurer, he was told not to probe the angle, he told the committee.  

Commercial Real Estate Important To Portfolios

At $4.6 trillion, income-producing commercial real estate – indirect and direct – is a major component of the global investment universe and investors increasingly are globalizing their real estate allocations, says an Ibbotson Associates study. The study says the spread of the REIT approach to real estate investment makes it easy and efficient for investors around the world to invest in other regions.

Barings Warning About Inflation

Research by Baring Asset Management's (Barings) warns that investor confidence has been knocked by data suggesting that inflation is rising in the UK and China. Inflation in the UK has been steadily increasing, with the inflation rate remaining above the two per cent target level for 17 consecutive months. In China, there are also signs of rising inflation which, although not unexpected, are likely to have important implications for investors worldwide. It believes that in the case of the UK and China, further action is now required. The futures market in the UK is already pricing in another interest-rate rise by the end of the year. In China, further interest rate increases and higher reserve requirements are likely over the coming months.

Misalignment Exists Between People Needs And HR Capabilities

While ‘people issues’ dominate the business agenda in Canada and across the globe, there is increasing tension between organizations’ needs and HR’s ability to deliver on key people challenges, says research by Deloitte Touche Tohmatsu and the Economist Intelligence Unit. ‘Aligned at the Top’ shows more than 85 per cent of participants believe people are vital to all aspects of organizational performance, rising to 90 per cent when looking three-to-five years ahead. However, the findings indicate there is a significant gap between companies’ people-related needs and the perceived capabilities and responsibilities of HR. Ultimately, companies are still struggling to build an effective partnership between business and HR to tackle key ‘people challenges.’


Tuesday, May 29, 2007

Bank Ups Offer For ABN

A consortium led by Royal Bank of Scotland has raised the cash portion in its offer for ABN Amro by 11 per cent. The total is also now worth more than the all-stock offer from Barclays. ABN had previously recommended its shareholders approve the Barclays offer. However, its shareholders have heavily criticized ABN over the way it has conducted its sale.

Satisfaction With Benefits Drops

U.S. employees are slightly less satisfied with their benefits packages and compensation than they were three years ago, says Sibson’s Rewards of Work Study. The study revealed a marginal, but steady decline in benefits satisfaction over the past six years. In 2006, 69 per cent were satisfied, compared with 70 per cent in 2003, and 71 per cent in 2000. Satisfaction was down in all benefits areas except time off.

Groupworks Announces IPO

Groupworks Financial Corp. has completed its Initial Public Offering (IPO). The common shares of the corporation are expected to begin trading Wednesday under the symbol GWC on the TSX Venture Exchange. Groupworks is a consolidator of independent employee benefits and pension consulting practices in Canada. The company’s objective is to become a national benefits and pension consulting and administration organization. Its recent acquisitions include Buffett Taylor & Associates and The Investment Guild.


Monday, May 28, 2007

Mortality Improvements Slowing

Future mortality improvements are expected to emerge more slowly and mainly at older ages since mortality rates at younger ages are already very low, says Jean-Claude Ménard, Canada’s chief actuary. In a presentation to the 15th International Conference of Social Security, he said in the context of the Canada Pension Plan, more and more contributors are expected to reach the retirement age of 65 and CPP retirement beneficiaries are expected to receive their benefit for a longer period.

Shareholders Approve Merger

Shareholders of The Bank of New York Company, Inc. and Mellon Financial Corporation have overwhelmingly approved the proposed merger of the two companies. The merger, first announced December 4, 2006, remains on schedule for an expected closing early in the third quarter of 2007, subject to receipt of regulatory approvals. The new company, which will be called The Bank of New York Mellon Corporation, will be among the world's leading securities servicers, with assets under custody and administration expected to exceed $18 trillion, and a leading global corporate trustee, with assets under trusteeship anticipated to be more than $8 trillion. It also will rank among the top 10 global asset managers with assets under management exceeding $1 trillion.

Older People Foundation For Nation

Rather than drain resources, older people – through taxation, volunteer work, and providing care for their families – are foundations for the nation, says HSBC’s The Future of Retirement survey. In Canada, HSBC calculates that people between 60 and 79 contribute $2.2 billion each year in tax payments and $3.1 billion in volunteer work. It says those in power – in governments, communities, and workplaces – need to ensure policies are put in place to enable older people to remain as active as they wish and are able.

Human Solutions Network Expanded

Wilson Banwell Human Solutions has acquired Ontario based, national EFAP service provider Baylis & Associates. This expands its program in Ontario by adding the client base and tapping into expertise of Shaun Baylis, who founded Baylis & Associates in 1985, and his team.

National Instrument Examined

Proposed National Instrument 31-103, a major part of the Registration Reform Project proposals, will be the focus of an IFIC session on June 7 in Toronto. The new NI is currently open for comment until June 20, 2007.  It will have significant impact on fund managers and distributors – from registration through to complaint handling – and a document listing all the issues that the IFIC RRP board committee and its multiple task forces have identified will be distributed at the meeting. An interactive panel will present IFIC's thinking on many of these issues. It starts at 8 a.m. For more information, visit


Friday, May 25, 2007

Global Growth Strong

Global growth will be strong at five per cent over the next three to five years, says Richard Clarida, executive vice-president and global strategic advisor for PIMCO. Speaking at PIMCO’s 2007 Secular Outlook seminar, he said the period will be marked by robust growth in the emerged world which will be moderated by a slowing of the U.S. economy. However, he does not foresee a crash landing of the U.S. economy.

GRS Offers 'Smart Messages' On Statements

Group Retirement Services, a division of The Great-West Life Assurance Company, now provides its group plan members with 'Smart Messages' on their mailed member statements. 'Smart Messages' are based on characteristics of a member's portfolio rather than general demographic trends. 'Smart Messages' are based on three categories – financial, demographic, and general information – and offer details about such things as key stages for investing, portfolio diversification, and tax receipt mailings.

Name Change Signals Increasing Global Perspective

To reflect the increasing global nature of its assets and strategies, Galileo Equity Management is changing its name to Galileo Global Equity Advisors Inc. The new name symbolizes its broader outlook and recognizes the fact that a significant amount of its discretionary portfolios are invested outside Canada.

CPP Has 12.9 Per Cent Return

The Canada Pension Plan Fund generated an investment return of 12.9 per cent in 2006, compared to 15.5 per cent return the previous year. CEO David Denison says the fund outperformed its benchmark by about 2.5 per cent this year. He attributed the solid gain to “strong equity market performance in the first nine months of the fiscal year, followed by a degree of volatility in the first three months of 2007.” Equities represented 64.8 per cent of the fund and bonds 25 per cent.

The investor’s need for increased disclosure on the ramifications of responsible investing (RI) was a key finding at RBC Dexia Investor Services’ ‘Feed Your Brain’ session. Featuring a who’s who of responsible investing experts, this topic generated a consensus that there is a need for greater disclosure by public companies about their activities around responsible investing. Without full disclosure, investors are unable to make truly informed decisions about the companies they are investing in. Investors should be made aware of practices that could result in future costs such as carbon taxes or potential litigation risks.

Desjardins Launches TRACE

Desjardins Financial Security is expanding its retirement plan sponsor services with the launch of TRACE Lifecycle Environment. This program, based on the lifecycle of participants, helps plan sponsors fulfill their governance responsibilities while greatly simplifying the investment process of their participants. TRACE automatically assigns participants a starting point on a risk tolerance path in accordance with their age. As participants draw nearer to retirement, the risk level of their portfolio is gradually decreased to become more conservative.

Many Aim To Improve Their Personal Health

Rising healthcare benefit costs are causing considerable angst among U.S. workers, says a survey by Watson Wyatt Worldwide. However, most workers say they are willing to improve their own health to help control future costs and prepare themselves for a more enjoyable retirement. The survey found that more than half of respondents are highly concerned that they won't be able to pay for healthcare coverage when they retire. The majority of workers see a connection between maintaining a healthy lifestyle and controlling cost increases. Many employees are willing to make changes in their lifestyle to improve their current health status.

Managing Cancer In The Workplace

‘Leadership in the Eye of the Storm’ will examine improving the management of cancer in the workplace. Sponsored by Tri Fit, it will look at how organizations can develop more resilient workers. It takes place May 29 at 8:30 a.m. in Toronto. For more information, contact Veronica Marsden at (905) 845-0006 or


Thursday, May 24, 2007

ESG Database Launched

Institutional Shareholder Services has unveiled a global sustainability risk report database and analysis that includes a scoring system ranking companies on more than 400 environmental, social, and governance factors. The database is designed to help investors assess companies on their ESG performance. The sustainability risk reports coverage includes the companies in the S&P 500 and the S&P/TSX Composite index, as well as the European companies in the MSCI EAFE stock index. 

PAICR Looks For Advisors

PAICR Canada (Canada’s Professional Association for Investment Communications Professionals) is looking for industry professionals accountable for consultant databases to join in an initiative. The initiative will look at the industry’s data issues such as categorization of assets. The goal is to ensure that data interpretation is clear, concise, and, most importantly, consistent throughout the industry. Those interested can eMail

Long-term Effectiveness Of Health Plans Uncertain

The long-term effectiveness of consumer driven health plans in the U.S. is uncertain, says Towers Perrin's Study on Account-Based Health. While some employers have achieved short-term financial savings, its study found that employers and employees were not reaping the health plans' full rewards. However, when employees have a strong understanding of their consumer driven health plan and feel comfortable with the level of perceived financial risk associated with it, they better utilize the plan and its resources.

Consultant/Sponsor/Manager Dialogue Planned

AIMSE’s fall conference will provide an opportunity to meet top consultants and plan sponsors and learn from them. The event will also reveal the keys to relationship building. It takes place October 11 in New York, NY. For more information, visit


Wednesday, May 23, 2007

Fees Hurting Retirement Saving

The combination of investor naiveté and industry marketing savvy is costing Canadians investing though mutual funds as much as $25 billion per year, says a study by the Rotman International Centre for Pension Management at the University of Toronto. It found that the pension fund results bettered the mutual fund results by a startling average of 3.8 per cent per year. Applying the 3.8 per cent return to the $690 billion Canadians have invested in mutual funds implies a wealth transfer from Canadian mutual fund participants to others (mainly to the mutual fund industry itself) of some $25 billion per year, leading to material shortfalls in retirement income down the road. Sustained wealth reductions of this magnitude will cut the retirement income of Canadians investing their retirement savings through the mutual fund sector in half or worse, says the study.

Manulife Unveils Critical Illness Benefit

Manulife Financial Group Benefits has unveiled a group insurance product which offers lump-sum benefits to Canadian plan members and their families diagnosed with a critical illness. Group critical illness insurance will supplement coverage available to plan members through their employer’s group health, life, and disability plans by providing covered individuals with a lump-sum benefit and access to premier health information and navigation services should they become critically ill. Plan members can use the benefit for anything they wish including healthcare costs to cover alternate treatment options, medical equipment, or expenses not covered by provincial or group benefits plans. 

Optimism Curbed

Institutional investors in North American have curbed their optimism, says the State Street Investor Confidence Index for May 2007. Global investor confidence fell by 1.8 points to 91.2 from April’s 93.0. The confidence of North American institutional investors decreased from 102.6 to 99.9, but confidence elsewhere improved, with European sentiment seeing an improvement from 90.5 to 94.2, and Asian sentiment rising from 81.7 to 84.3. The drop in optimism is a result of the weak U.S. first quarter. Globally, prospects remain good as worldwide demand remained strong through the first quarter, impacting inventories.

Three-quarters Of Plans In Danger

Up to three-quarters of all U.S. corporate pension plans may be frozen or terminated within the next five years, says a McKinsey & Co. study. It says the return of private Defined Benefit plans to healthy fund levels will boost the share of companies opting to freeze or terminate their plans from the current level of 25 per cent.

Dow Hits New High

The Dow Jones Wilshire 5000 closed at a new record high of 15,372.80. This breaks its previous all-time high of 15,355.90 which was set on May 21, 2007 . The market was up for the third straight day yesterday and the record close is 3.89 per cent higher than the February 20, 2007 , record that first surpassed the March 24, 2000 , high. Since February 20, 2007 , the market value of the index has increased by $700 billion.


Tuesday, May 22, 2007

Socially Responsible ETF Launched

Jantzi Research Inc., in partnership with Barclays Global Investors Canada Limited, has launched the first socially responsible Exchange Traded Fund (ETF) in Canada. The iShares CDN Jantzi Social Index Fund provides exposure to companies that have positive environmental, social, and governance (ESG) attributes. In Canada, SRI assets are valued at more than $500 billion, representing 20 per cent of the combined retail mutual fund market and the institutional investment market. In addition, SRI assets have grown almost tenfold since 2004.

BIMCOR Turns To Eagle

BIMCOR, manager of the Bell Canada Enterprises’ pension fund, is now live with Eagle Investment Systems LLC’s data management and performance measurement solutions.  BIMCOR deployed the Eagle solution as part of an initiative to improve data quality, generate daily performance and attribution, and retire legacy applications. The Eagle solution consolidates BIMCOR’s investment data into a single data hub, helping the fund to ensure it has accurate and consistent data to support its investment process and feed downstream systems. 

AIMA Revises Guide

The Alternative Investment Management Association (AIMA) has published its revised Guide to Sound Practices for European Hedge Fund Managers. The guide – originally published in 2002 – considers various practical aspects of establishing and managing a hedge fund business in Europe and recommends corresponding sound practices. It is intended to be a practical business tool for hedge fund managers and to provide relevant and insightful information for the investor and regulatory community.

Global FX Surges

Global foreign exchange volumes increased 17 per cent from 2005 to 2006, says research from Greenwich Associates. At the same time, the interest rate derivatives business recovered from a year of stagnant trading volumes with a 10 per cent increase in 2006.

Foreign exchange trading volume grew to $70.6 trillion in 2006 while interest rate derivatives trading volume increased to $1.4 trillion in 2006. "In the foreign exchange market, two trends in particular appear to have boosted trading activity to a new and potentially sustainable level – the increased international investment activity associated with globalization and the increasing use of electronic trading systems," says Greenwich consultant Peter D'Amario.

Teachers’ Buys Stake In Airport

Ontario Teachers Pension Plan is buying a minority stake in Birmingham International Airport. Teachers and Victorian Funds Management Corp., an Australian public sector pension fund, have a conditional agreement to buy a 48.25 per cent interest in the English airport. Teachers owns 60.1 per cent of the joint venture with Victorian. Birmingham International Airport, the fifth-largest airport in the United Kingdom, handles more than nine million passengers a year through two terminals.

Investment Consulting Fees Increase

U.S. pension and endowment funds paid $227,000 in average annual fees for investment consulting services in 2006, five per cent more than a year earlier and 50 per cent more than in 2002, says a Greenwich Associates study. Public pension funds with assets between $1 billion and $5 billion paid the highest fees in 2006 with an average $381,000. Public funds averaged $291,000. Greenwich says 83 per cent of the funds surveyed used an investment consultant for investment advice last year, up from 80 per cent in 2005 and less than 75 per cent in 2003.

Changing Healthcare Landscape Examined

The impact of budgetary cutbacks and cost shifting on the healthcare system will be the focus of the final Benefits Breakfast Club session of the year. ‘The Changing Healthcare Landscape’ will examine trends such as the increased burden on group benefit drug plans to pay for drugs that were previously paid through the public healthcare system. It takes place June 7 at 8 a.m. in Burlington, ON. For more information, visit

Members Continue To Move To Fixed Income

U.S. 401(k) participants continued shifting their assets from equities to fixed income investments in April, but not at the same pace as they did in March, says the Hewitt 401(k) Index. Participants moved $110 million from stock investments to fixed income funds in April, far lower than the $572 million they transferred the month before. Hewitt attributes the increase in fixed income investments to the large amount of money being transferred out of employer stock.

Employers Offer Incentives To Join Wellness Programs

The number of U.S. employers offering their workers an incentive to enroll in a company wellness program has climbed about 15 per cent since 2003, with cash-based rewards the most popular enticement, says a Wellness Program Management Advisor and Wellness Junction survey. The survey of managers and administrators found that 70 per cent of employers were incenting employees to participate in wellness programs in 2006, up from the 54.7 per cent that were doing so in 2003. About 68 per cent of employers offered cash-based rewards, up slightly from 63.9 per cent in 2003.


Friday, May 18, 2007

Teachers’ Buys Stake In Airport

Ontario Teachers Pension Plan is buying a minority stake in Birmingham International Airport. Teachers and Victorian Funds Management Corp., an Australian public sector pension fund, have a conditional agreement to buy a 48.25 per cent interest in the English airport. Teachers owns 60.1 per cent of the joint venture with Victorian. Birmingham International Airport, the fifth-largest airport in the United Kingdom, handles more than nine million passengers a year through two terminals.

Investment Consulting Fees Increase

U.S. pension and endowment funds paid $227,000 in average annual fees for investment consulting services in 2006, five per cent more than a year earlier and 50 per cent more than in 2002, says a Greenwich Associates study. Public pension funds with assets between $1 billion and $5 billion paid the highest fees in 2006 with an average $381,000. Public funds averaged $291,000. Greenwich says 83 per cent of the funds surveyed used an investment consultant for investment advice last year, up from 80 per cent in 2005 and less than 75 per cent in 2003.

Changing Healthcare Landscape Examined

The impact of budgetary cutbacks and cost shifting on the healthcare system will be the focus of the final Benefits Breakfast Club session of the year. ‘The Changing Healthcare Landscape’ will examine trends such as the increased burden on group benefit drug plans to pay for drugs that were previously paid through the public healthcare system. It takes place June 7 at 8 a.m. in Burlington, ON. For more information, visit

Members Continue To Move To Fixed Income

U.S. 401(k) participants continued shifting their assets from equities to fixed income investments in April, but not at the same pace as they did in March, says the Hewitt 401(k) Index. Participants moved $110 million from stock investments to fixed income funds in April, far lower than the $572 million they transferred the month before. Hewitt attributes the increase in fixed income investments to the large amount of money being transferred out of employer stock.

Employers Offer Incentives To Join Wellness Programs

The number of U.S. employers offering their workers an incentive to enroll in a company wellness program has climbed about 15 per cent since 2003, with cash-based rewards the most popular enticement, says a Wellness Program Management Advisor and Wellness Junction survey. The survey of managers and administrators found that 70 per cent of employers were incenting employees to participate in wellness programs in 2006, up from the 54.7 per cent that were doing so in 2003. About 68 per cent of employers offered cash-based rewards, up slightly from 63.9 per cent in 2003.


Thursday, May 17, 2007

OEPC Releases Hearing Schedule

The Ontario Expert Commission on Pensions (OEPC) will hold public hearings across Ontario in October and November 2007. The tentative schedule is October 17 to 19 Toronto; October 31 – Kingston; November 1 – Ottawa; November 6 – Sudbury; November 7 – Thunder Bay; November 13 – Hamilton; November 14 – London; and November 15 – Windsor. The commission invites written and oral submissions from stakeholders in the pension system including plan sponsors, plan members and pensioners, unions and other representative organizations, plan administrators, pension professionals, academic, community and other groups, and employers, workers, retirees and other interested Ontarians. Formal written briefs and submissions can be submitted any time prior to October 15. Informal letters or eMails to the commission are also invited. For more information, visit

Bill 30 Adds To Cost

The adoption of Bill 30 in Quebec will make administration of Defined Benefit pension plans more demanding and expensive, says Natalie Bussière, of Blake , Cassels & Graydon LLP. Speaking at its ‘Recent Developments in Pension & Employee Benefits Law’ seminar, she said “over and above the prevailing economic environment, employers participating in a pension plan will also have to bear additional costs in relation to Bill 30.” Increased costs will result from funding requirements which come into effect in 2010 and additional requirements for plan administration. 

Cowan Sells Practice To Morneau Sobeco

The Morneau Sobeco Income Fund will acquire the Defined Benefit pension administration and actuarial consulting practices of Cowan Benefits Consulting Limited. All Cowan employees currently working in the DB pension administration and actuarial consulting practices will be offered roles with Morneau Sobeco. Cowan will continue with its health and disability and retirement consulting for Defined Contribution plans and group RRSPs practices.

State Street Appointed

State Street Corporation and IFDS Canada, a transfer agency service, have been appointed by Sarbit Asset Management to provide custody, fund accounting, and transfer agency services for its fund complex. “We were impressed by the comprehensive solution, supported by leading edge technology and an extraordinary commitment to service that State Street and IFDS offered,” says Terry Baxter, chief financial officer at Sarbit Asset Management.

Tri Fit Receives STAPLES' Award

Tri Fit has earned a vendor award from STAPLES Business Depot. This award recognizes it efforts in enhancing associate health and well-being. Its web-based fitness and wellness program, Get Fit @ Home, was launched last October to more than 13,000 associates and their families across Canada.

Barclays Introduces LifePath Portfolios

Barclays Global Investors Canada Limited has introduced its LifePath Portfolios to Canada. First introduced in the United States in 1993, these plans allow employers to offer their employees a complete all-in-one investment package. Each portfolio is index-based, broadly diversified and designed for both an appropriate risk tolerance and a target date for when the money will be needed.

National Conference Offers Credits

Attendees at the CPBI 2007 National Conference can earn up to 20 continuing education credits from several Canadian insurance councils including the Albert Insurance Council, Saskatchewan Insurance Council, Manitoba Insurance Council, Advocis, and the Chambre de la Sécurité Financière du Quebec. The theme is ‘Winds of Change’ and sessions will focus on global issues shaping the industry today. It takes place June 13 to 15 in Winnipeg, MB. For more information, visit

Employers Look At Health Management

Employers are responding to the double-digit healthcare cost increases by offering initiatives that emphasize health and productivity and directly engage employees in managing their health, says Aon Consulting’s 2007 Benefits and Talent Survey. Other health initiatives in 2007 include promoting the importance of health and productivity to employees, offering disease management programs, and implementing wellness programs such as preventive care.


Wednesday, May 16, 2007

External Peer Panel To Review CPP Actuarial Report

The Office of the Chief Actuary (OCA) is once again commissioning an external peer review of its next actuarial report on the Canada Pension Plan (CPP), expected to be released in December 2007. First introduced in 1999, the peer review is intended to ensure that the actuarial reports meet high professional standards and are based on reasonable assumptions in order to provide sound actuarial advice to Canadians. As in previous years, the review will be conducted by Fellows of the Canadian Institute of Actuaries.

Lack Of National Strategy Creates Barriers

The absence of an effective national pharmaceutical strategy and catastrophic drug plan is creating barriers to access to effective, medically-required treatment, says the 2007 ACS/Buck Canadian Health Care Trend Survey. It says group insurers are increasingly struggling with patient requests to cover expensive cancer treatments when the provincial plan, or hospital, will not pay. Group insurance plans should not cover drugs that require hospital administration since they are considered a publicly-funded service. However, if the treatment means the difference between life and death, does the insurer or employer have a moral obligation to cover the cost of the treatment? These and other developments, along with sustained benefit plan usage by employees resulting from high employee expectations for healthcare coverage, will continue to push healthcare costs upward.

U.S. Companies Move To DC

The largest companies in the U.S. continue to move away from traditional pension plans, with more than four in 10 now offering new workers only Defined Contribution accounts, says a study by Watson Wyatt Worldwide. Of the 100 largest companies, just 31 offered traditional pension plans in 2006. That's down from 35 in 2005 and only about a third of the 89 that offered traditional pensions in 1985. As of last year, 42 of the companies had moved to DC plans, up from 37 in 2005 and 10 in 1985.

TMAC Celebrates 25th

This year TMAC celebrates its 25th Anniversary Conference & Trade Show. For 25 years, the event has been the premiere treasury and financial conference of its kind in Canada. It takes place September 16 to 18 in Vancouver, BC. For more information, visit


Tuesday, May 15, 2007

External Peer Panel To Review CPP Actuarial Report

The Office of the Chief Actuary (OCA) is once again commissioning an external peer review of its next actuarial report on the Canada Pension Plan (CPP), expected to be released in December 2007. First introduced in 1999, the peer review is intended to ensure that the actuarial reports meet high professional standards and are based on reasonable assumptions in order to provide sound actuarial advice to Canadians. As in previous years, the review will be conducted by Fellows of the Canadian Institute of Actuaries.

Lack Of National Strategy Creates Barriers

The absence of an effective national pharmaceutical strategy and catastrophic drug plan is creating barriers to access to effective, medically-required treatment, says the 2007 ACS/Buck Canadian Health Care Trend Survey. It says group insurers are increasingly struggling with patient requests to cover expensive cancer treatments when the provincial plan, or hospital, will not pay. Group insurance plans should not cover drugs that require hospital administration since they are considered a publicly-funded service. However, if the treatment means the difference between life and death, does the insurer or employer have a moral obligation to cover the cost of the treatment? These and other developments, along with sustained benefit plan usage by employees resulting from high employee expectations for healthcare coverage, will continue to push healthcare costs upward.

U.S. Companies Move To DC

The largest companies in the U.S. continue to move away from traditional pension plans, with more than four in 10 now offering new workers only Defined Contribution accounts, says a study by Watson Wyatt Worldwide. Of the 100 largest companies, just 31 offered traditional pension plans in 2006. That's down from 35 in 2005 and only about a third of the 89 that offered traditional pensions in 1985. As of last year, 42 of the companies had moved to DC plans, up from 37 in 2005 and 10 in 1985.

TMAC Celebrates 25th

This year TMAC celebrates its 25th Anniversary Conference & Trade Show. For 25 years, the event has been the premiere treasury and financial conference of its kind in Canada. It takes place September 16 to 18 in Vancouver, BC. For more information, visit


Monday, May 14, 2007

Litigious Decade Ahead For Pension Plans

The next decade could be very litigious for pensions plans, says Robin Pond, of Morneau Sobeco. Speaking at its Emerging Trends Seminar, he said plans today are developing well thought-out strategies to reconcile their long-term need to have a cost-efficient plan with their short-term volatility issues. However, the two cannot be reconciled. The result will be that those strategies which fail could be the subject of legal action.

Hedge Fund Industry At Critical Mass

The hedge fund industry has reached critical mass with the U.S. leading the way, says Andrew Gibson, head of client management, International Asset Management. Speaking at an ABN AMRO Asset Management information breakfast meeting, he said U.S. pension funds are now allocating 12 per cent to 15 per cent of their assets to hedge funds. The hedge fund market today is a recognized investment class due to performance, risk control, and diversification benefits. However, obtaining the benefits without the risks requires specialization and a sound methodology.

Accounting Standards Implementation Delayed

The Office of the Superintendent of Financial Institutions will delay implementation of new accounting standards for employee future benefits to determine how they will affect capital adequacy and assets requirements. Under a proposal from the Accounting Standards Board, entities will be required to recognize the funded status of Defined Benefit plans in the balance sheet for fiscal years ending on or after December 31, 2007. However, as a result of their different fiscal year-ends, some, but not all, federally regulated financial institutions (FRFIs) will be required to reflect these accounting changes in their fiscal 2007 year-end financial statements. In order to ensure consistent regulatory treatment among FRFIs and to allow OSFI time to assess the impact of the final accounting standards, it will delay the implementation for fiscal 2007 until further notice.

Employers Taking Steps To Alleviate Impact Of High Gas Prices

Professionals who are feeling pain at the pump may find help from their employers, says Robert Half International Inc. Its poll shows 82 per cent of executives say their firms are taking action to reduce the impact of higher gas prices on their teams. The most common changes reported include increasing expense guidelines for employee-incurred mileage (cited by 62 per cent of respondents), allowing staff to telecommute more frequently (32 per cent), and allowing employees to work from offices closer to home (25 per cent).


Friday, May 11, 2007

DB Plans Far Superior

For Bank of Canada Governor David Dodge, Defined Benefit pension plans are far superior to Defined Contribution pension plans. Speaking at the Conference Board of Canada’s ‘2007 Pensions Summit,’ Dodge set out a number of things that are needed to encourage employers to continue with their DB plans. He said the legal status of surplus must be determined so that plan managers are not managing their plans to avoid surplus. In fact, they should “run actuarial surpluses in good times that will offset actuarial deficits in other periods.” As well, accounting rules should reflect the fact that pension plans are focused on values far in the future, not at one point in time. As a result, a pension fund with a solvency deficiency now, could turn that into a surplus without injections of cash by the employer.

Plan Pulls Out Of BCE Consortium

The Public Sector Pension Investment Board has backed out of a four-member consortium led by the Canada Pension Plan Investment Board bidding for BCE Inc. The other partners in the group are U.S. buyout firm Kohlberg Kravis Roberts & Co. and the Caisse de dépôt et placement du Québec.

CIBC Sets Up Independent Review Committee

CIBC Asset Management has implemented National Instrument 81-107 (NI 81-107) by setting up an independent review committee for investment funds. The committee consists of John Crow, former governor of the Bank of Canada; Donald Hunter, former partner of PricewaterhouseCoopers; Tim Kennish, former co-chair of Osler, Hoskin & Harcourt LLP; Merle Kriss, president of Kriss & Associates Limited; and William Thornhill, president of Thornhill Consulting

Teachers' Private Capital Opens London Office

Teachers' Private Capital has opened its first office outside of Canada in London, UK. The office gives it enhanced access to European and international private equity opportunities. Teachers' Private Capital is the private investment arm of the Ontario Teachers' Pension Plan. It has more than $4 billion invested in European private equity and infrastructure, and has been investing directly in companies and funds in Europe for more than 15 years.

Cancer In The Workplace

The Group Insurance Pharmaceutical Committee’s ‘Cancer and the Workplace – Demystifying the System’ will be held in Toronto, ON, June 29.  This session will look at the integration of public and private resources for the benefit of the patient and the role of the employee, employer, and insurer in the process. Keynote speaker is Colleen Savage, president and CEO of the Cancer Advocacy Coalition of Canada. For more information, visit


Thursday, May 10, 2007

Funding Crisis End Nears

Corporate executives are optimistic that the pension funding crisis in Canada could be coming to an end, says a survey by Watson Wyatt Worldwide and the Conference Board of Canada. Chief financial officers and vice-presidents of human resources still believe there is a critical problem with under-funded pension plans in Canada. However, fewer believe it will be a long-lasting problem. The percentage of CFOs who feel the pension crisis will be long-lasting has declined to 48 per cent from 61 per cent last year, while only 40 per cent of HR vice-presidents think pension funding will be a lengthy concern, down from 67 per cent a year ago. The results of the survey will be presented at the Pension Summit Conference which opens today in Toronto, ON.

Investment Options Have Impact On DC Participation Rates

The more investment options, the lower the participation rate in Defined Contribution pension plans, says Nadia Savva, account executive for group savings and retirement solutions at Manulife Financial. Speaking at the ACPM Ontario Regional Council’s ‘Threats to Income Protection: Where are they coming from and how do we mitigate them?’ she said one U.S. study showed the participation rate dropped from 75 per cent for plans with two funds to 61 per cent for plans with 59 funds. As well, for every 10 additional funds offered to plan members, allocations to money market funds rose by about four per cent and allocations to equities dropped by seven per cent.

UK Focuses On DB Funding

The UK’s Pension Regulator will focus on boosting the funding of Defined Benefit schemes, improving the governance of work-based pensions, and reducing the risks to plan participants enrolled in Defined Contribution plans. In its plan for 2007 to 2010, it says it will make sure that the funding requirements set by the 2004 Pension Protection Act are met and implemented effectively. It will also issue a consultation paper about its approach to governance and it will try to reduce the effect of five risks associated with DC plans that can have a direct impact on the level of benefits following retirement –administration, investment, charges, retirement choices, and member understanding.

HRPAO Holds Human Capital Management Conference

The HRPAO Human Capital Management Conference, ‘From Operations to Strategy,’ takes place June 6 in Toronto, ON. It will provide attendees with the latest tricks in attracting, retaining, and managing human capital. For more information, visit

Equity Markets Dominate

Strong equity markets dominated the pension financial picture in April, says Towers Perrin's ‘Capital Market Update.’ The investment results were only partially offset by an increase in liability values, as bond yields moved down slightly. The bottom line was a 1.4 percentage point improvement in the benchmark plan’s funded ratio – to 91.8 per cent at the end of April.

OEPC Sets Hearing Dates

Public hearings before the Ontario Expert Pension Commission (OEPC) are planned for October 17 to 19 in Toronto, ON. The hearings will allow those interested to present briefs on their concerns about pensions in Ontario. To register, eMail


Wednesday, May 9, 2007

Guardian Capital Selects RBC Dexia

Guardian Capital Group Limited has selected RBC Dexia Investor Services for the provision of custody, record-keeping, fund administration, and securities lending for its portfolio of pooled funds and corporate securities. "Guardian was looking for a service provider that could accommodate our diverse business requirements and support our plans for future growth," says Sam K. Greiss, senior vice-president, Guardian Capital Group Limited.

EAPAT Looks At Eldercare

Ralph Kelly, director of business development for Home Instead Senior Care, will look at changes in the workplace are due to care-giving issues at EAPAT’s final seminar of the season and annual meeting. ‘Eldercare: Running on Empty’ will look at what employers can do to cope with this developing trend. The event takes place June 7 at 5 p.m. in Toronto, ON. For more information, visit

B.C. Ending Mandatory Retirement

The British Columbia government has joined the growing ranks of provincial governments that have introduced legislation to eliminate mandatory retirement, says a Mercer Communiqué. The legislation as drafted would be effective January 1, 2008.

As with other provinces, the changes proposed will not impact the provision of benefits. The legislation will continue to permit differentiation on the basis of age for pension plans and for group or employee benefits under bona fide insurance plans, including those that are self-insured by employers or provided by a third-party insurer.


Tuesday, May 8, 2007

Auto Enrollment Increases Participation

Automatic enrollment can propel an increase in Defined Contribution pension plan participation, says a CitiStreet study. Its review of its own plan communications over the last 12 years showed that comprehensive plan information is valuable, but can be too overwhelming to participants at the outset and can lead to inaction and confusion. It found that a simple approach resulted in response rates that were significantly higher than traditional, information-rich approaches, with the response rate doubling when a plan communication piece was simplified from five reasons to participate in the plan to just two key points.

CC&L Launches Long-short Strategies

Connor, Clark & Lunn Investment Management Ltd. (CC&L) has launched three investment strategies designed for Canadian institutional investors. The CC&L Canadian Q 120/20 and CC&L North American Q 130/30 are managed using its quantitative investment techniques, while the CC&L Canadian GARP 120/20 strategy levers its long-standing fundamental growth-at-a-reasonable-price approach. Long-short extension strategies introduce an ability to sell-short a portion of a portfolio, providing managers with the opportunity to add additional value by taking greater advantage of ‘sell’ signals.

T. Rowe Price Unveils Expanded Website

T. Rowe Price has expanded its website for advisers and other financial intermediaries to provide streamlined access to institutional investment content and educational resources designed for client use. In addition to advisers, its site is designed for broker/dealers, clearing firms, banks, and Defined Contribution recordkeepers. While basic content is available to all visitors to the site, detailed portfolio information and sales support materials are only available to those registering for access. Featured areas of the site include performance data, portfolio holdings, attribution analysis, style analysis graphs, manager commentary, fund facts, and other key statistics and portfolio review information on investment products.

U.S. Nurses Save More

U.S. nurses are using income generated from working overtime for their retirement, says a Fidelity Investments study. Its survey found that 22 per cent said they are allocating extra income earned by working overtime to retirement savings. Nurses reported higher savings levels in 401(k) and 403(b) plans than their peers across the tax-exempt and corporate sectors. On average, nurses have $64,000 compared to average balances of $48,000 among all workers in tax-exempt sector plans and $62,500 among all workers in corporate sector plans.


Monday, May 7, 2007

Surplus Must Be Distributed

Another court has ruled that surplus must be distributed on the partial wind-up of a Defined Benefit pension plan. In the Marine Atlantic case, a Federal Trial Division has said that proportional distribution of the surplus attributable to the wound-up portion of the plan must take place, says Heenan Blaikie’s Labour & Employment in the News. As with the Monsanto case, there was no decision on who actually owns the surplus. While the court suggested partial wind-ups approved in the past are only subject to limited challenge, more recent ones may be vulnerable to challenge. The decision applies to partial wind-ups in the federal sector.

ABN AMRO Rejects LaSalle Offer

ABN AMRO has rejected an offer for its U.S. bank LaSalle from a consortium led by Royal Bank of Scotland (RBS). However, it says it will put the offer and other proposals to a shareholder vote. The offer by RBS and its partners, Santander and Fortis, is not superior to a Bank of America offer, says ABN AMRO. 

Pension Rules Reviewed

Alberta will review its Employment Pension Plans Act and options for creating an Alberta Pension Plan. As well, it will look at ways of addressing the unfunded liability of public sector pension plans, says a Mercer Communiqué. These intentions were delivered in the province’s 2007 budget.


Friday May 4 , 2007

Draw Down Of Retirement Savings Overlooked

While much attention has been paid to building up the “retirement nest egg,” relatively little has been said about the “orderly draw-down of wealth during retirement,” says Donald Stewart, chief executive officer of Sun Life Financial. Speaking at an Economic Club of Toronto luncheon, he said factors such as the shift away from Defined Benefit pension plans and the increasing life span of Canadians means there is an increased risk of retirees outliving their money. He called on the financial planning community, employers, and individuals to ensure that society is ready for the “tidal wave of retiring boomers.”

Actively Managed Canadian Equity Lags

Actively managed Canadian equity and small cap funds lagged benchmark indices in the first quarter of 2007, says Standard Poor’s Indices Versus Active Funds Scorecard for Canada. Only 47.7 per cent of Canadian equity funds outperformed the S&P/TSX composite index and just 47.6 per cent of small cap funds outpaced the S&P/TSX small cap index. U.S. equity funds fared better, with 57.6 per cent of funds in this category outperforming the S&P 500 index. Five-year average fund returns to the end of 2006 show active funds underperformed both the S&P/TSX composite index and the S&P/TSX capped composite, both on an equal- and asset-weighted basis, by roughly 300 basis points.

Jarislowsky Inducted Into Hall

Stephen A. Jarislowsky, founder, chairman, and CEO of Jarislowsky, Fraser & Company; has been inducted as a laureate into the Canadian Business Hall of Fame. He was one of a group of five inductees. See the May issue of Benefits and Pensions Monitor for ‘A Conversation With …’ Jarislowsky.

GARP Presents Career Night

GARP’s Ontario Chapter will present its second ‘Career Night’ May 10 in Toronto, ON. It will feature a panel of risk professionals who will share their experiences and insights. It starts at 5:30 p.m. For more information,

FPL Offers Credit

FPL Canadian Electronic Trading Conference will offer IDA, Law Society of Upper Canada, and, possibly IDA continuing education credits. It will examine the information needed to effectively access new marketplaces and sources of liquidity. It takes place May 31 and June 1 in Toronto, ON. For more information, visit


Thursday May 3 , 2007

Canadian Equity Funds Dominate

Funds that invest in Canadian income-producing equities offered the best returns in April, says preliminary fund performance data by Morningstar Canada. The Canadian High Income Equity Fund Index had the best return among its 42 Canada Fund Indices, gaining 3.5 per cent for the month thanks to strong performances from income trusts. The five fund categories that focus on Canadian equities dominated the fund index rankings last month, despite the S&P/TSX Composite Index dropping 1.6 per cent on April 30.

CIBC Asset Adds Hamon Investment

CIBC Asset Management Inc. has appointed Hamon Investment Management Limited as portfolio sub-advisor of the Talvest China Plus Fund and the Talvest Asian Fund. Hamon is an independent asset management firm established in 1989 that specializes in Asian investment. Based in Hong Kong, its clients include pension funds, corporations, financial institutions, and family trusts.

OSFI Alerts Firms

The Office of the Superintendent of Financial Institutions is reminding market participants to establish, maintain, and enforce policies and procedures designed to achieve matching of institutional trades on the day on which the trade was executed. This is a rule from the Canadian Securities Administrators. As of October 1, “the relevant parties to the matching process will need to execute agreements or state in documentation that they have such policies and procedures in place,” says OSFI. A rule that mandates matching on the trade day is being gradually phased in over a three-year period. The rule affects federally-regulated financial institutions and their affiliates that are market participants, engage in trading activities, or hold investment assets as custodians for institutional investors and pension plans.

Unhealthy Workers Should Pay More

U.S. employers say workers who lead unhealthy lifestyles – such as smoking, a poor diet, and inadequate exercise – should be required to pay more for their healthcare, says a PricewaterhouseCoopers Health Research Institute survey. Nearly two-thirds of employers shared this view, up from the 48 per cent who felt that way in 2005. Eight in 10 employers believe that providing financial incentives for employees participating in healthy lifestyle programs could reduce their company's healthcare costs. Such incentive programs range from cash rewards for completing health risk appraisals to rewards for accomplishing agreed-upon goals such as a specified amount of weight loss or smoking cessation.

SHARE Hosts Class Action Seminar

As part of the Pension Investment & Governance series, SHARE is hosting a seminar on ‘Securities Class Actions and Trustees’ Fiduciary Responsibilities’ June 14 in Toronto. It will feature leading Canadian and international pension and legal experts. For more information, telephone 604-408-2456; eMail; or visit

Commuted Value Interest Rate Assumptions

The interest assumptions required to calculate commuted values for an event which occurs in any month up to and including June 2007 are now available at An Excel spreadsheet on the website contains worksheets for:

Poos Speaks At Canada Cup

John Poos, director, global pension, at Nortel Networks; will join Donald Weiss, president and CEO of Ontario Pension Board; and Bruce Curwood, director of research and strategy, Russell Investments Canada Ltd; as featured speakers at the Canada Cup of Investment Management. It takes place June 12 and 13 in Toronto. For more information, visit


Wednesday May 2 , 2007

Canadians Need More Income For Retirement

Many Canadians may need substantially more income in retirement if their goal is to maintain their pre-retirement lifestyles, says research from Fidelity Investments Canada Ltd. The changing retirement landscape prompted Fidelity to re-examine the 70 per cent retirement income replacement rate. No longer are Canadians retiring at 65 years old and living the following 15 to 20 years at a relatively less active pace. Increasingly, retirees are spending a lot more time doing the things they love. Canadians are also living longer, with life expectancy increasing to 84.5 years from 81.9 years over the last 25 years. Fidelity’s new research shows that Canadians should now aim to replace 80 per cent of their pre-retirement income if they wish to maintain their lifestyles in retirement.

Workshops Address Human Capital Challenges In M&A

Mercer Human Resource Consulting’s M&A Ready workshop will make a stop in Canada. The sessions are being held in 15 cities around the world including a session June 19 and 20 in Montreal, QC. The workshops are interactive sessions to help with the planning and execution of the due diligence, integration planning, and implementation processes of a transaction. For more information, visit

Eagle V8.0 Released

Eagle Investment Systems LLC has launched Eagle V8.0, the latest release of its integrated suite of investment management and technology solutions. Enhancements have been made to various aspects of automation and data generation, performance measurement capabilities, and investment accounting processing.

Fewer U.S. Employers Offering Benefits

Fewer U.S. employers are offering healthcare benefits, mostly because many new small employers have chosen not to pay for health insurance, says the U.S. Government Accountability Office. It found an eight percentage point drop in the share of small employers offering benefits from 2001 to 2006. More employers that offer health benefits now make workers pay a higher share of out-of-pocket costs. Some are offering consumer-directed health plans, which trade lower premiums for significantly higher deductibles, or mini-medical plans that provide more limited coverage at lower premiums. 

Claymore Selects RBC Dexia

Claymore Investments, Inc. has selected RBC Dexia Investor Services to provide global custody, fund administration, and securities lending services for its nine new exchange-traded funds (ETFs), recently launched under the Claymore ETF brand name. Som Seif, president of Claymore, says they are “confident that RBC Dexia provides the best strategic fit to help us achieve our long-term business objectives."

ABS Market Has Solid Growth

The Canadian asset backed securities (ABS) market had solid growth during 2006 and ratings agency DRBRS predicts that trend will continue in the year ahead. Total ABS outstandings rose nearly 30 per cent to more than $167.1 billion as of December 31, 2006, compared with $129.1 billion at the end of 2005. Growth was fuelled by increases in both the asset backed commercial paper (ABCP) and the public term ABS markets.

Hedge Fund World Global Event

Hedge Funds World Canada will attract participants from around the world who recognize the enormous potential of the Canadian market and its hedge fund industry. Set for October 9 to 11 in Toronto, ON, it will feature speakers including Frederic Bettan, managing partner and CEO, Swing Capital; Eric Kirzner, professor of finance, Rotman School of Management, University of Toronto; and Henry Cohen, president and CEO, Full Cycle Energy Investment Management. For more information, visit


Tuesday May 1 , 2007

Controversial Plan Re-opened

The Premier Cable pension plan has been re-opened. The subject of a legal challenge in Rogers v. Buschau – where members of the plan attempted to have a proposed plan merger ruled invalid and the pension trust wound up – will not be merged with the Rogers Communication plan and will continue to exist and be re-opened to new members. Julie Dickson, OFSI’s acting superintendent, will not exercise her discretion to declare the plan terminated.

Positive Start For Equity Managers

The year began on a positive note for active Canadian equity managers, who found it a more favourable environment for investing compared to the last couple of years, says Russell Investments Canada’s first quarter 2007 report on active management. In the first quarter of 2007, 65 per cent of large cap equity managers in Canada outperformed the S&P/TSX composite index, the highest proportion in almost three years. That was up from the fourth quarter of 2006 when just 51 per cent beat the benchmark. The median large cap manager posted a return of three per cent which was ahead of the S&P/TSX Composite return of 2.6 per cent in the quarter. In terms of investment style, the environment was more conducive for value managers, with 71 per cent of them outperforming the benchmark in the first quarter of 2007, compared to 61 per cent of growth managers. That was a reversal from the fourth quarter of 2006 when the majority of growth managers beat the benchmark compared to only 27 per cent of value managers.

183 Support UN Principles

The United Nations-developed Principles of Responsible Investing have achieved support from 183 institutional investors representing $8 trillion in the first year since the guidelines were introduced, say the U.N. Environment Program Finance Initiative and the U.N. Global Compact, which developed the principles. The UNEPFI works with the private sector to promote connections between environmental and other sustainability issues and financial performance. The U.N. Global Compact is a network of corporate, labor, government academic, and public interest groups that support environmental and social initiatives. Canadian signatories include the Caisse de dépôt et placement du Québec, the Canada Pension Plan Investment Board, Meritas Financial, and Jantzi Research Inc.

Pension Summit May 10 And 11

The Conference Board of Canada’s ‘2007 Pensions Summit: Striking the Balance’ takes place May 10 and 11. It will feature original research from the Conference Board and Watson Wyatt as well as presentations by David Dodge, governor of the Bank of Canada; David Robbins, manager, research and policy, National Association of Pension Funds (NAPF), UK; and Edgar J. Sullivan, managing director, research, General Motors Asset Management. For more information, visit

Employee Engagement Subject Of Keynote Address

‘Making A World Of Difference’ will be the theme of a Comprehensive Benefit Solution Limited seminar June 13 in Toronto. It will feature a keynote address by Fiorella Callocchia, president of HR Impact, on ‘Rewards, Empowerment And Employee Engagement.’ Other sessions will look at pandemic preparedness, the end of mandatory retirement in Ontario, and target date funds. For more information, eMail

Hayes Discusses Risk Management

Financial risk management will be the focus of a TMAC seminar May 10 and 11 in Halifax, NS. Frank Hayes, president of Stanley Software Finance, will cover areas including commodity risk management, ‘Covered Call’ option strategies, and using equity swaps for risk alteration. For more information, visit


Monday April 30, 2007

Fidelity Opens Back-office In China

Fidelity International has become the first foreign fund management group to launch a back-office operation in China. The planned venture would be located in the northeastern port of Dalian and could eventually rival its outsourcing operations in India, where it employs about 9,000 staff. Fidelity is hoping to use the Dalian facility to service its mutual funds and pension business in Japan, where it ranks among the biggest foreign money managers. 

U.S. MEPPs Endangered

About 40 per cent of U.S. multi-employer plans are considered either “endangered” or in “critical status” in regard to meeting the funding requirements of the Pension Protection Act, says a Segal survey. The survey is linked to the act's requirement that trustees of multi-employer plans must begin reviewing their funding status on an annual basis. The survey found 58 per cent of multi-employer plans are predicted to meet the PPA’s funding requirements; 28 per cent are "endangered," meaning they are less than 80 per cent funded, or will have a projected minimum funding deficiency within seven years; and 16 per cent are considered in "critical status," meaning they are less than 65 per cent.

TIAA-CREF Adjusts Allocations

TIAA-CREF is adjusting the asset allocations of its seven target date funds. The firm is increasing equity allocations from 80 per cent to 90 per cent for the first target date fund and extending the retirement date. It is also increasing exposure to equities at the time of retirement from 35 per cent to 50 per cent and will then decrease exposure to 40 per cent when participants are 10 years beyond the retirement date.


April 27, 2007

ABN AMRO Transfers Private Equity Arm

ABN Amro will transfer the management of most of its private equity business to an affiliate. The move would give the private equity team independent operational and commercial authority. It is also meant to increase the attractiveness of its private equity business for funding from third-party investors. ABN is currently the subject of a bidding war between a Royal Bank of Scotland consortium and Barclay’s.

Morguard Acquires Industrial Portfolio

Morguard Investments Limited has acquired an industrial portfolio of eight buildings with 759,000 square feet of area. With this acquisition, the pooled fund now contains more than 2.5 million square feet in 26 buildings with 160 tenants and a total value of $180 million. With more than $6.5 billion in assets under management, Morguard provides real estate portfolio, asset, and property management services to major institutional investors and property owners.

Derivatives Demystified  

Derivatives will be demystified at a TMAC seminar May 9 in Halifax, NS. Frank Hayes, president of Stanley Software Finance, will teach the course which provides an overview of the key financial risk management areas of interest rate, currency and commodity, and derivatives commonly used in each area. For more information, visit


April 26, 2007

Maple Bond Market Growth Dramatic

The ‘Maple bond’ market continues to enjoy dramatic growth and the larger Canadian bond market is evolving to an open global market, says RBC Capital Markets. It says the bond market is undergoing accelerating change driven by investors seeking diversification and incremental yield, globalization, shrinking government bond supply, and a myriad other factors. The repeal of the foreign investment limit, in July 2005, has helped spark the globalization of Canada’s bond market. Larry Bates, RBC Capital Markets global head of debt capital markets, says “The growth in the Canadian debt market during the past couple of years has far exceeded expectations. Most experts never thought it would take off as quickly as it has. We may not be completely global yet, but we are well on our way. The evolution of the Canadian bond market is clearly in full swing.”

Dow Tops 13,000

A steady parade of strong profit reports and reassuring news on the economy has pushed the Dow to a close above 13,000 for the first time. The Dow Jones industrial average rose 1.05 per cent to end at 13,089.89.  The broader market also rose to its highest level in more than six years. The S&P 500 rose 1.01 per cent, closing at 1,495.32; and the Nasdaq composite was up 0.92 per cent, to close at 2,547,89. Earnings updates from Microsoft and Ford, expected today, could drive markets higher.

ABN AMRO Opens Books

ABN AMRO says it will open its books to a Royal Bank of Scotland Plc led consortium, which has made a $98.2 billion offer for the bank, threatening a lower bid by Barclays. RBS, Belgian-Dutch group Fortis, and Spain's Santander can look at its books, subject to confidentiality agreements. By opening its books, ABN increases the chance it will be at the centre of a bidding war.

Few Firms Ready For Pandemic

Although media coverage of Avian Flu has diminished, public health experts continue to warn that a pandemic is an ongoing threat that could significantly disrupt day-to-day activities including business, government, and education, says International SOS. A survey of North American businesses about their state of preparedness and what plans they have in place for the onset of pandemic found while 65 per cent of organizations are in the process of implementing a pandemic preparedness plan, only seven per cent have implemented plans completely.


April 25, 2007

OSFI Still Vigilant

The financial health of federally regulated private pension plans has improved, say solvency ratio estimates by the Office of the Superintendent of Financial Institutions (OSFI). The average solvency ratio of federally regulated Defined Benefit pension plans was 1.06 at December 2006, meaning the total value of assets of all plans was six per cent higher than liabilities, calculated on a solvency basis. While the situation of individual pension plans varies considerably, the overall number is a marked improvement from the end of 2005 when there was an average shortfall of some 10 per cent. Although these results are positive, Acting Superintendent Julie Dickson says pension plan sponsors and administrators must continue to be vigilant and knowledgeable about techniques to manage the potential risk volatility can pose to benefit security and funding requirements.

Banks Make Bid For ABN AMRO

A trio of banks led by Royal Bank of Scotland is proposing a $98 billion bid for Dutch bank ABN AMRO, threatening an agreed $91.16 billion takeover by Barclays. The RBS group includes Spain's Santander and Dutch-Belgian bank Fortis. However, the consortium says a precondition of its offer is scrapping ABN's deal to sell its U.S. business LaSalle Bank to Bank of America.

Nasdaq Freezes Pension Plan

Nasdaq Stock Market Inc., New York, will freeze its Defined Benefit pension plan and supplemental executive retirement plan. The company will amend its existing 401(k) plan to institute qualified profit-sharing contributions based on a fixed formula and will add a new non-qualified profit-sharing plan.

FPL Returns To Toronto

The FPL Canadian Electronic Trading Conference 2007 will examine the fundamental changes in the securities marketplace. It will look at ongoing disruptions of marketplace structures, the effect on trading across security types, and the need for an adjustment in trading approaches both globally and in Canada. Keynote speaker Don Drummond, senior vice-president, chief economist, TD Bank Financial Group, will offer his perspective on market-based solutions to protect the environment. The early bird pricing ends April 30. The event takes place May 31 to June 1 in Toronto. For more information, visit

Canadian Benefit Plans The Focus

Knowledge needed to effectively work with Canadian benefit plans, focusing on essential business practices and concepts will be the focus of the International Foundation’s ‘Concepts and Practices of Canadian Benefits for Canadian and U.S. Corporations.’ It will feature a primer course for those new to Canadian benefits and insight into the government-funded healthcare plans. It takes place July 23 to 25 in Toronto. For more information, visit

Workaholic Label Losing Lustre

Bragging rights about being a workaholic may be coming to an end and being replaced by a focus on the family, says a Desjardins Financial Security study. The study found that more than 20 per cent of Canadians now consider themselves to be a workaholic. Despite hectic work schedules, Canadians are working hard to put these family values into practice. Approximately 72 per cent of Canadians plan vacations and 72 per cent are having regular meals with their families and friends. However, Canadians are not convinced that the priority they are placing on family is being fully supported by their workplaces. While many companies are implementing programs to promote work/life balance for their employees, the study results show that 65 per cent of Canadians feel that the values at their workplace are not in tune with their personal values.


April 24, 2007

401(K) Failings Overcome

U.S. pension plan sponsors are overcoming some of the serious shortcomings of the Defined Contribution pension plan, says a Greenwich Associates report. As Defined Benefit plan sponsors in the private and public sectors struggle with a massive funding crisis, the deficiencies of DC are becoming more apparent. For example, incomplete DC participation rates have left many employees lacking a retirement savings plan of any kind. Many plan sponsors – especially those who have closed their DB plans – recognize that the effectiveness of their DC plans is now perhaps the single most important determinant of the financial status of their employees in retirement.

Pharmacist Fees Not Eligible

Alberta’s insurer community is unlikely to consider additional pharmacist fees as eligible expenses under their benefit programs, says Eckler Group News. April 1, regulations allowing for additional services and fees for pharmacists in Alberta came into effect. These additional or ‘consultative’ fees are expected to be in the range of $13 to $14 when a pharmacist is prescribing medication. However, an Eckler survey of the insurer community revealed they would not be covering the fees.

Teachers' Plan Selects Securent

The Ontario Teachers' Pension Plan (Teachers') has selected Securent, Inc.’s Entitlement Management Solution (EMS) to serve as its entitlement management platform. EMS enables organizations to secure sensitive applications and data. Organizations can create, enforce, review, and audit fine-grained access policies across heterogeneous application and IT environments distributed throughout the enterprise, all with centralized management and visibility.

Provinces End Mandatory Retirement

Nova Scotia and Newfoundland and Labrador have adopted legislation that will eliminate mandatory retirement, says a Mercer Communiqué. In Nova Scotia, the bill does not prohibit age-based distinctions in ‘good faith’ pension plans or group or employee insurance plans. It does, however, propose to remove the exception for age-based distinctions in ‘retirement plans.’ If adopted in its current form, this could have implications for non-registered retirement arrangements such as group RRSPs.

Newfoundland and Labrador’s legislative changes do not impact an employer’s right to terminate employment based on a worker’s age where the termination is ‘because of the terms or conditions of a good faith retirement or pension plan.’

Investment In Employee Training Pays Off

 Business leaders might be best off investing in their employees – rather than in machines, computers, or software, says a Canadian Council on Learning (CCL) report. ‘Connecting the Dots … Linking Training Investment to Business Outcomes and the Economy’ indicates that investment in training often helps businesses increase productivity and grow the economy more than upgrading equipment. However, there have been few measures to demonstrate the return on investment in employee training to employers.

Few Take Action On Older Workers

Only 17 per cent of employers in Canada have strategies in place to recruit older workers and only 24 per cent have implemented retention strategies to keep them participating in the workforce, says a Manpower Canada survey. “Many employers are not considering the percentage of their workforce that is set to retire in the next five to 10 years and the potential loss of productivity and intellectual capital that will occur when those people leave their company,” says Lori Rogers, vice-president, operations. “If employers don’t act soon, they will fail to win the war for talent, as older adults will be relied upon as one of the most important sources of talent for the future workforce.”


Monday, April 23, 2007

ABN Amro, Barclays Merge 

Barclays PLC says it will acquire ABN Amro NV for $91.16 billion in the world's largest bank takeover. As part of the deal, ABN will sell its U.S. unit, LaSalle Bank, to Bank of America Corp. for $21 billion in cash. Despite the agreement, ABN says it will go ahead with meetings with Royal Bank of Scotland PLC, Spain's Banco Santander Central Hispano SA, and Belgian-Dutch bank Fortis NV. Those talks are aimed at splitting up ABN and selling off parts of its operations.

Returns In Line With Expectations

After a great 2006, Canadian pension funds achieved returns more in line with the long-term expectations for the first quarter this year, says Mercer Investment Consulting’s Pooled Fund Survey. The Canadian pooled balanced pension fund median return was 1.7 per cent for the quarter. “Most pension plans in Canada would have seen little change by the end of the quarter in the financial position compared to the end of 2006,” says Peter Muldowney, business leader for Mercer Investment Consulting in Canada. “Both the assets and the liabilities are likely to have grown by a similar amount.” 

Actuarial Group Seeks Pension Reform

The U.S. Society of Actuaries’ 20/20 Retirement Project is trying to bring together key stakeholders – including sponsors, consultants, academics, and financial professionals – to help develop a new pension system. The project identifies major issues including better aligning the retirement system with financial markets to more effectively pool and hedge retirement risks. Also, it suggests clarifying employers’ roles regarding the compatibility of retirement plan risks with other corporate goals and global competition.

Pension Buyout Deals To Accelerate

UK pension liability buyout deals are set to accelerate over the next five months, with up to $5 billion in assets from five transactions expected to be completed by September 30, says liability buyout specialist Paternoster U.K. By March 31, Paternoster had acquired liabilities worth £411.7 million and assets of £260 million from 19 pension plans. Many plan sponsors had decided earlier this year that with deficits falling, the time was right to completely remove the pension liability from their balance sheets.


Friday, April 20, 2007

Ignoring ESG Breach Of Fiduciary Obligation

Going forward, the issue of environment, social, and governance (ESG) considerations in making investment decisions will be considered less in the context of investing for non-investment reasons and more in the context of investing having regard to all opportunities and risks, says Murray Gold, department head for pensions at Koskie Minsky LLP. Speaking at the Sustainable Investing Symposium hosted by Guardian Ethical Management Inc. (GEM), he said “indeed, it would be negligent and a breach of fiduciary obligation to ignore material risks or opportunities, whatever their character.” In terms of fiduciary law, he said there are no cases that rule out making investment decisions without regard to all risk and returns variables, including ESG.

Canadian Pension Plans Gain Ground

Bolstered by yet another quarter of healthy equity returns, Canadian pension funds maintained their positive momentum during the first quarter, says a report by RBC Dexia Investor Services. Within its universe, pension funds earned 1.8 per cent in the quarter ended March 31, 2007. "On the heels of two very strong back-to-back quarters, this is a fairly respectable start to the new year," says Don McDougall, director of advisory services. "Since hitting their low-point in March of 2003, pensions have benefited from impressive equity numbers and consequently, have performed extremely well. The median Canadian plan has realized a healthy 14.1 per cent annualized return over the past four years."

Partial Funding Model Appropriate

An actuarial study by the Office of the Chief Actuary of Canada concludes that the current partial funding model of the Canada Pension Plan is robust and appropriate for the purpose of contributing to the long-term financial sustainability of the plan. Legislated reforms to the CPP in 1997 led to a change in the funding of the CPP from the pay-as-you-go basis to the partially funded, steady-state model. Steady-state funding ensures that the contribution rate is sufficient to ensure the long-term financial stability of the plan. The report concludes that the steady-state funding of the CPP is the optimal form of funding for the plan, and that the objective of pre-funding the plan should remain paramount.

Few Hedge Funds Investment Grade

Hedge funds could benefit from credit ratings, but very few would earn investment grade scores, says a report from Fitch Ratings. “While credit ratings could be beneficial in negotiations between fund managers and counter-parties for ISDA agreements, prime broker agreements, or direct securities lending, Fitch Ratings expects only a small percentage of hedge funds to qualify for an investment grade and many of them would not be expected to issue debt,” it says. For a hedge fund to achieve an investment grade under Fitch’s rating criteria, it would expect the fund to have a high percentage of liquid assets (95%+); diversified asset classes within the funds; risk measurement and reporting independent of daily traders; risk limits based on reasonable stress; performance that reflects risk appetite; institutional liquidity management; good rating agency transparency; at least five years of audited financial statements, and $2 billion of assets under management.

Employers Turn To Wellness

Controlling medical costs is seen as the most serious current business challenge – and it is expected to become even more serious in the future, says a study by The Guardian Life Insurance Company of America. As a result, the vast majority of U.S. companies see value in implementing wellness/prevention programs which are seen as cost savers. However, they also implement them because such benefits are highly valued by employees. 

OMERS Talked About BCE

The Ontario Municipal Employees Retirement System (OMERS) says it has held talks on participating in a takeover bid for BCE Inc. Paul Renaud, chief executive officer of OMERS Capital Partners, the fund's buyout unit, was quoted as saying “everybody in the industry is circling the transaction. We would certainly look at participating in it.” Ontario Teachers' Pension Plan, BCE's biggest shareholder, started the interest in BCE April 17 when it said it would consider making a bid for it. As well, the Canada Pension Plan Investment Board is heading up a group looking at making a bid. 

PENSUL Launches New Website

PENSUL, which provides consulting services to pension committees and trustees, has launched a new website. It features information about the firm as well as the services it offers institutional investors. To visit the site, go to


Thursday, April 19, 2007

VenGrowth Brings Gore To Toronto

VenGrowth Asset Management Inc. is bringing former U.S. vice president Al Gore to Toronto to present on solutions for global warming. VenGrowth, in association with affiliate Criterion Investments, presents ‘An Evening with Al Gore’ April 28 in an invitation-only event for the local investment and business communities. “Recent polls show that the environment is the number one issue for Canadians,” says David Ferguson, managing general partner. “Al Gore has become the planet’s unofficial spokesperson on climate change and we’re delighted to bring him to Toronto to share an important global message.

Four Seasons Took Hit

Four Seasons Hotels Inc.’s conversion to a new pension scheme last fall was expensive. Switching to a Defined Contribution pension plan from a Defined Benefit plan cost Four Seasons US$42.2 million because the previous scheme had not been fully funded. Despite the steep, one-time cost, Four Seasons is not anticipating a long-term impact because the DC plan will make its pension costs predictable in the future.

Large Companies To Keep Offering Healthcare

Large U.S. companies will keep offering healthcare coverage to employees. However, they hope to cut costs by investing in improving employee health, says a Hewitt Associates LLC survey. While some companies have been trimming health benefits and raising co-pays, none of the large company human resources executives surveyed said their organization would be less involved in healthcare benefits over the next three to five years than they are today. Company efforts at improving employee health range from simple things, such as flipping the food in company vending machines so the nutritional information faces out, to increasing the number of in-house clinics and pharmacists to help employees with primary care. 

Merrill Lynch Develops Swap Indices

Merrill Lynch & Co., Inc. has developed a new inflation-linked swap index series designed to track the performance of sterling and euro inflation-linked interest rate swaps. The new indices, which are an extension of Merrill Lynch’s swap index line-up, cover key points along the curve from two- to 50-year maturities.

Green Guru Speaks

The ‘guru of green business practices’ will be one of the featured speakers at the Canadian Responsible Investment Conference. Joel Makower is founder and executive editor of and co-founder and principal of Clean Edge Inc. As a writer and consultant on corporate sustainability, he has helped a wide range of companies align environmental goals with business strategy. The conference takes place May 27 to 29 in Montreal, QC. For more information, visit

IBM President Among Speakers

Dan Fortin, president of IBM Canada Ltd., and John Risley, president and CEO of  Clearwater Fine Foods Inc., are among the featured speakers at FEI Canada’s 2007 Conference. Speakers at the conference will cover topics including a comprehensive update on the issues and developments facing CFOs. It takes place June 6 to 8 in Halifax, NS. For more information, visit

Arbitrator Affirms Prohibition Against Random Drug Testing

The Ontario Court of Appeal's 2001 decision in Entrop v. Imperial Oil Ltd. is considered the leading case with respect to whether random and unannounced drug testing is permissible in the workplace, says a Fasken Martineau Dumoulin LLP Bulletin.  Recent arbitral jurisprudence not only confirms the Court of Appeal's 2001 decision, but also casts doubt on whether random drug testing will ever be permissible in Ontario, notwithstanding technological advancements in testing methods. Employers seeking to defend drug testing in the workplace will bear the burden of demonstrating a real risk to safety in the workplace.


Wednesday, April 18, 2007

Plans Consider New Strategies

Many large U.S. and corporate Defined Benefit pension plans are considering new investment strategies to help them deliver on their obligation to their employees, says a survey by Pyramis Global Advisors, a Fidelity Investments company. Peter Chiappinelli, senior vice-president of Pyramis, says there has been a “marked shift in attitudes towards any investment strategy that can reduce volatility or improve returns.” The survey found for the first time that public sector plans invested in more international equities than corporate plans and that corporate plans allocated more assets to fixed income than public plans.

Consortium Working With BCE

Three Canadian institutional fund managers and a private equity firm are working with BCE Inc. on a transaction to take the company private. The consortium consists of The Canada Pension Plan Investment Board, Caisse de dépôt et placement du Québec, and the Public Sector Pension Investment Board – who would be majority shareholders – and Kohlberg Kravis Roberts & Co. The consortium noted that discussions are at an early stage and there can be no assurance that a transaction of any kind will result.

Changes Coming To U.S. DC Plans

Almost two-thirds of U.S. employers will make major changes to the design of their Defined Contribution plans this year, says a Buck Consultants survey. Changes include offering investment education, introducing lifecycle/lifestyle funds, and introducing or changing the level of matching contributions. The majority, 82 per cent, say that providing retirement income adequacy is one of their top priorities.

LOMA Focuses On Winning Through Change!

Douglas Bolger, chief learning officer of L(earn)(2), will offer advice and insight on how to create context and improve change responsiveness to win in today's fast changing business environment at the LOMA Canada Annual Conference. It takes place June 14 in Toronto. It will also feature a variety of break-out sessions and workshops including sessions on group benefits and retirement services. For more information, visit

Investor Confidence Index Falls

The State Street Investor Confidence Index for April 2007 fell by 7.6 points to 91.7 from March's reading of 99.3. Looking regionally, the confidence of North American institutional investors decreased from 114.5 to 100.2. The confidence of European investors increased slightly from 87.3 to 87.9 points, while the confidence of Asian investors decreased from 85 to 83.2. Harvard University professor Ken Froot says "Whereas institutional investors were ready and willing to provide liquidity during March's global sell-off, this month they returned to a more balanced course.” Leaving aside last month's high reading, confidence remains at two-year highs, with institutional investors continuing to allocate to equities and away from bonds.

Impact Of Demographics On Accounting

‘The Impact of Changing Workforce Demographics on the Post-Reform Accounting Landscape’ will be the focus of the next FEI Canada National Breakfast Seminar. David King, executive vice-president, financial services, Robert Half International, will be the featured speaker. It takes place May 31 in Toronto, starting at 7:30 a.m. For more information, visit

Mansbridge Keynote Speaker

Peter Mansbridge, chief correspondent of CBC News, will address key issues of the day, explore the national mood in relation to political trends, and provide insights on how Canada and Canadians are reacting to the changes that are affecting the pension and benefits industry at the CPBI 2007 National Conference in Winnipeg. The conference takes place June 13 to 15 in Winnipeg, MB. For more information, visit

Aligning Rewards With Employment Deal

HRPAO’s Spring 2007 One-Day Conference on aligning rewards with the changing employment deal takes place May 9 in Toronto. Attendees will learn how to design a creative and strategic compensation offering that retains top talent, rewards performance and drives business results direct from the experts. For more information, visit


Tuesday, April 17, 2007

INVESCO Launches Long-Short Strategies

INVESCO's Global Structured Products Group will fund three different directional long-short products. The new strategies are designed to help clients gain additional alpha through the controlled use of shorting within their long-only portfolio. The strategies are a large cap core directional long/short that is benchmarked to the MSCI US Index; a small cap core directional long/short that is benchmarked to the S&P 600 Index; and a large cap growth directional long/short that is benchmarked to the Russell 1000 Growth Index.

Benefits By Design Unveils New Face

Benefits by Design, a national administered benefits agency, is developing a more focused brand identity. It will now operate under the corporate name of ‘BBD.’ CEO Mike McClenahan says the acronym BBD is more in keeping with modern trends in corporate naming. “The shorthand name is convenient and was already finding its way into common usage both internally and with everyone who communicates with us."


Monday, April 16, 2007

Former OSC Head To Probe RCMP Pension

David Brown, the former chairman of the Ontario Securities Commission, will lead an independent investigation into allegations relating to the RCMP’s pension and insurance plans. Brown, now counsel with the firm Davies Ward Phillips & Vineberg LLP, will investigate whether the RCMP’s assessment of the allegations was conducted in an appropriate and timely manner; whether the members and employees involved in the reporting or reviewing of mismanagement were treated fairly and in accordance with RCMP procedures and practices; whether management responded appropriately and in a timely manner to mistakes or inappropriate conduct by members and employees; and, whether management responded to findings of mismanagement or non-compliance in a timely and effective manner.

Sun Offers Guaranteed Retirement Income Product

Sun Life Financial and CI Investments Inc. have launched SunWise Elite Plus, a product that redefines retirement planning. SunWise Elite Plus offers a guaranteed minimum withdrawal benefit, providing investors with guaranteed, sustainable income during retirement, along with the potential for the guaranteed income to grow.

Summit Strikes Pension Balance

‘The 2007 Pensions Summit : Striking the Right Balance’ will help plan sponsors strike a balance between competing interests in plan design, management, risk, and investment.  Experts from around the world will explain how they are dealing with these issues. It takes place May 10 and 11 in Toronto . For more information, visit

Workers Less Confident Of Pension System

Forty-five per cent of U.S. workers are less confident that they can count on traditional pensions when they retire, says a survey by the Employee Benefit Research Institute. The Retirement Confidence Survey says 20 per cent of workers are counting on getting Defined Benefit pensions from a future employer – a reality that is becoming dimmer as employers continue to shift to Defined Contribution pension plans. To make sure they have enough for retirement, workers say they are saving more either on their own or in an employer's plan.

Benefits Package Must Be Clear

It’s more important than ever to create clear and compelling benefits packages, says a study by the Guardian Life Insurance Company. It says the average U.S. employee spends about 1.4 hours reviewing their benefits packages each year, and nearly half of Americans spend either no time or less than an hour each year. The most common way that employees seek information about their benefits is by reading employer provided benefits literature, followed by discussing choices with family members, talking to their human resources department, and meeting with benefit advisers.


Friday, April 13th

Goodman Chancellor At Brock

Ned Goodman, founder and chief executive officer of Dundee Corporation and Dundee Wealth and chairman of Goodman and Company, has been named chancellor of Brock University, in St. Catharines, ON. He succeeds Dr. Raymond Moriyama who completed his term at Brock on March 31, 2007. As chancellor, Goodman will assume a leadership role in advancing the university and will play a vital role in the educational welfare of Brock students.

No Hedging In AIMA Canada Debate

Are fund of funds a more efficient means than multi-strategy funds to gain hedge fund exposure? That was the question at AIMA Canada’s fourth annual luncheon debate. Graham Thouret, president of Diversified Global Asset Management, and Christopher Greer, principal and managing director of Forest Investment Management, squared off parliamentary style to settle the issue. Greer, who argued in favour of multi-strategy funds, made the more compelling argument, based on a show of hands.

Compensation Strategies Examined

In today’s tight labour market, many companies are finding it hard to get the skilled workers they need. The Canadian Institute’s ‘Compensation and Benefits 2007’ conference will offer strategies that will help create a competitive compensation and benefits package. It takes place September 24 and 25 in Calgary, AB. For more information, visit

Knight Steps Down

After almost 27 years with the firm, David Knight has announced his departure from KBSH Capital Management Inc. He was one of the four founders of Knight, Bain, Seath and Holbrook when it was created in 1980.


Thursday, April 12

Funded Ratio Improving

Favourable investment markets have restored pension funding in Canada to the highest level in almost five years, says an analysis by Watson Wyatt Worldwide. For a typical pension plan, the funded ratio increased to 98 per cent at the end of first quarter of 2007 from 86 per cent at the beginning of 2006, on a GAAP (Generally Accepted Accounting Principles) basis. The combination of rising stock markets and a modest increase in bond yields is largely responsible for the improvement. "These improving funded ratios will be welcomed by CFOs,” says Ian Markham, a senior consultant and director of pension innovation. “Smaller deficits will mean a lesser impact on company balance sheets.” Under proposed new accounting rules released on March 29, pension fund deficits will have to be reported directly on balance sheets by December 31, 2007, for most companies.

Hedge Funds Pick Up Speed

The long awaited escalation of Canadian institutional investing in hedge funds appears to be gaining speed, says the second installment of the State Street Vision Series which focuses on hedge funds. It says more than two-thirds of institutional investors are now allocating more than five per cent of their assets to hedge funds, while only four per cent have no allocation. While the allocations are small, they represent the fastest growing investment segment.

‘Traditional’ Asset Allocations Shaken Up

U.S. pension funds and endowments continue to shift assets out of domestic stock investments and into hedge funds, private equity, and international equities, says research from Greenwich Associates. Private equity investments made up 3.8 per cent of U.S. institutional assets in 2006, up from 3.6 per cent in 2005. Over the same period, hedge funds grew to 2.1 per cent of total assets from 1.9 per cent. Allocations to international stocks increased to 15 per cent from 13.9 per cent. Average allocations to domestic stocks declined to 44.7 per cent of total assets in 2006 from 46.7 per cent in 2005.


April 11, 2007

CSA Proposes Changes To Disclosure Requirements

The Canadian Securities Administrators’ (CSA) proposed changes to compensation disclosure rules mirror most of the disclosure requirements introduced in 2006 by the Securities Exchange Commission (SEC) in the United States, says a Mercer Communiqué. For Defined Benefit pension plans, a new column will be added to the Summary Compensation Table to report the “aggregate change in the actuarial present value” of the accumulated benefit under all Defined Benefit pension plans (registered and non-registered) for each named executive officer and director. This value represents the difference in the present value of accrued pension benefits between the beginning of the year and the end of the year. For Defined Contribution Pension Plans, the proposals require the Summary Compensation Table to include the value of actual and notional employer contributions as well as above-market or preferential earnings credited to non-registered DC pension plans.

Electronic Trading Systems Capture Global FX Volume

For the first time, ‘buy side’ foreign currency traders in 2006 executed more than half of total global FX trading volume through electronic trading systems, says a Greenwich Associates report. Among ‘top tier’ users, the proportion of companies and institutions using e-trading systems jumped from 44 per cent to 53 per cent between 2005 and 2006. At the same time, the total e-trading volume generated by research participants more than doubled from a reported level of $17 trillion to more than $35 trillion in 2006.

Benefit Cuts Impact Retirement Savings

U.S. workers’ retirement benefits are not enough to make up for cuts to their benefit programs, says the Employee Benefit Research Institute's annual retirement confidence survey. It says the vast majority of employees are likely to need additional savings if they hope to retire with the benefits they expected before the shift away from company-sponsored traditional pensions to 401(k) plans to make up for the increased healthcare costs of aging and the decline in benefits and post-retirement benefits provided by employers.

Quebec Opening Door To Private Healthcare

The province of Quebec is implementing a new law that will allow limited use of private healthcare as part of an effort to improve health and social services, says Watson Wyatt. Bill 33 permits a limited number of medical procedures to occur outside the public health system. It creates two different types of private, for-profit specialty clinics – specialized medical centers (SMCs) and associated medical clinics (AMCs) – in an effort to reduce wait times and increase access to specialized services. SMCs are equipped to provide hip or knee replacements, cataract extractions, or intraocular lens implantation. AMCs are a private health facility, medical laboratory, or SMC affiliated with a hospital centre. As well, it allows private insurance for specific services that an SMC is authorized to provide.

ACPM Examines Threats To Income Protection

The ACPM will examine whether or not the migration from Defined Benefit pension plans to Defined Contribution is the answer. Speakers, including Robert Brown, research director, Ontario Expert Commission on Pensions, will provide attendees with insights into the current state of affairs with respect to employee perceptions of their retirement plans and their investment behaviour patterns as well as possible solutions to managing the risks in DB plans. It takes place May 9 at 7:45 a.m. in Toronto, ON. For more information, visit

Great-West Buys U.S. TPA

Great-West Lifeco Inc.’s American subsidiary, Great-West Life & Annuity, is buying an 80 per cent stake in a U.S. third-party heath plan administrator (TPA). Acquiring Benefit Management Corp. will allow Great-West to acquire Allegiance Benefit Plan Management, the leading medical plan administrator for large employer groups in  Montana , and its physicians and hospitals network.


April 10, 2007

Legislative Update Returns

Governmental policy makers, employee benefit executives, and industry leaders will present to trustees, administrators, and professional advisers serving multi-employer and public sector benefit plans at this year’s Ottawa Legislative Update. Key sessions will look at solvency issues, CAPSA guidelines, and mandatory retirement. It takes place May 10 and 11 in Ottawa, ON. For more information, visit

Fewer Employers Pay Full Healthcare Premium

The number of U.S. private sector workers enrolled in employer-sponsored health plans with no premium required by the employee dropped from 27 per cent in 1998 to 18 per cent in 2004, says the Agency for Healthcare Research and Quality. It found that workers at small companies – those with fewer than 50 workers – were more likely than those at larger companies to be in non-contribution plans. 

Workers Beat Illnesses

More U.S. worker are beating illnesses and returning to work, says Unum. In fact, it says individuals filing a disability claim for breast, colon, or prostate cancer are beating the disease in greater numbers and returning to their jobs. For example, since 2001, there has been a 96 per cent increase in return to work for breast cancer claimants on short-term disability and a 14 per cent increase for claimants on long-term disability. "For many, a cancer diagnosis no longer means permanent disability or death," says Kenneth Mitchell, vice-president of health and productivity. "With the success of new screening and treatment protocols, various cancers are becoming more of a chronic disease to be managed. It's about living beyond the disease."

Claymore Launches New ETF

Claymore Investments, Inc. has launched the Claymore S&P/TSX CDN Preferred Share ETF. It is comprised of preferred share issues listed on the Toronto Stock Exchange that meet criteria relating to market capitalization, liquidity, and issuer rating. The ETF will provide a way for investors to access a diversified portfolio of Preferred Shares across companies, industries, and credits.


April 9, 2007

Access Offered To Global Infrastructure

Lazard Asset Management has launched a Canadian pooled fund that invests in publicly traded companies, which own infrastructure assets. With a minimum investment of $3 million, the pooled vehicle allows institutional investors to access the Global Infrastructure market with daily liquidity. Long lock-up periods have been typical of infrastructure investing to date. 

Pension Experts Share Experiences

Leading pension experts from around the world will again share their unique experiences and provide invaluable perspective on pensions in Canada at the ‘2007 Pensions Summit: Striking the Right Balance.’ Keynote speakers include David Dodge, governor of the Bank of Canada, who will reflect on the important role Defined Benefits plans play in the Canadian economy. It takes place May 10 and 11 in Toronto, ON. For more information, visit 

Schroder Selects RBC Dexia

Schroder Investment Management (Luxembourg) S.A. has selected RBC Dexia Investor Services to provide locally-required Canadian sub-recordkeeping services for 23 of its Luxembourg investment funds, which are being distributed to offshore clients through the Canadian investment dealer network. This represents a geographical expansion of the previous working relationship between the two companies. In 2004, Schroders selected Dexia Fund Services to provide recordkeeping services for its investment funds distributed to offshore clients via U.S. intermediaries.


April 5, 2007

CI Acquires Rockwater

CI Financial Income Fund has acquired Rockwater Capital Corporation. CI is an independent, Canadian-owned wealth management company with approximately $84.3 billion in fee-earning assets. Rockwater is an independent financial services company in three related businesses: investment counseling and portfolio management (KBSH Capital Management Inc.), retail investment management (Lakeview Asset Management Inc.), and a full service investment dealer (Blackmont Capital Inc.)

Retirement In A Nutshell

Retirement in a Nutshell - It's More Than Just the Money!’ is the topic at the Manitoba CPBI Council April 19 breakfast seminar. Bob Romphf, labour relations officer – benefits, Manitoba Nurses’ Union; will discuss a practical approach and strategy for the average Canadian in preparing for retirement. It takes place at 7:30 a.m. in Winnipeg, MB. For more information, contact Dale Davidson at


April 4, 2007

Benefits May Move To Balance Sheet

The net funded position of a company pension plan, now generally disclosed only in the footnotes to the financial statements, would be recognized as an asset or liability in the employer’s balance sheet under a proposal by the Accounting Standards Board (AcSB). It has released an exposure draft, Employee Future Benefits (Amendments to Section 3461), that will significantly alter how employers account for their pension and other post-retirement obligations, says ACS/Buck Consultants. Specifically, the exposure draft will require recognition of the funded status of an entity’s post-retirement Defined Benefit plans on the balance sheet. As well, it calls for measurement of plan assets and the accrued benefit obligation at the balance sheet date, instead of allowing a date that is up to three months before the end of an entity’s fiscal year. The exposure draft comes close to harmonizing the Canadian standard with the recently-adopted U.S. Statement of Financial Accounting Standards no. 158, Employers’ Accounting for Defined Benefit Pension and Other Post-retirement Plans (SFAS 158).

Hedge Fund Managers Get Forum

Presentations by approximately 20 Canadian hedge fund managers will be the agenda at Introduction Capital’s Investor Meets Canadian Hedge Fund Manager Forum. The day-long event will feature managers ranging from start-ups to established fund groups. It takes place April 26 in Toronto, ON. For more information, contact Karen Azlen at 416-849-1927 or

U.S. Employers Reduce Use Of Stock Options

U.S. companies are altering the composition of their equity-based employee compensation plans by adopting and expanding restricted equity award and performance share programs while scaling back existing stock option plans, says research from Greenwich Associates. While the data does not suggest that companies are scrapping stock option programs entirely, there is ample evidence that companies are scaling back their use of stock options significantly. In many cases, companies appear to be reducing the scope of their stock option plans as part of a move away from broad based programs to more narrowly focused stock option compensation plans, often limited to company executives.

Northern Trust Enhances Stock-Level Attribution

Northern Trust now offers stock-level attribution for institutional investors and investment managers. Stock-level attribution allows clients to better evaluate investment decisions by providing a greater level of detail. Northern Trust’s stock-level attribution product measures the relative performance of individual stocks in a portfolio against established benchmarks and reports those results on a daily or monthly basis with a customized layout according to the client’s preference.

Northwater Offers Portable Alpha Funds

Northwater Capital Management Inc. has launched the Northwater Portable Alpha U.S. Bond Fund and the Northwater Portable Alpha U.S. Equity Fund. Both funds are structured as portable alpha offerings, with investors choosing a targeted market index exposure in their choice of fund – either the Lehman Aggregate Bond Index for the Northwater Portable Alpha U.S. Bond Fund and/or the S&P 500 for the Northwater Portable Alpha U.S. Equity Fund.

Ex-Norwegian PM To Speak

Dr. Gro Harlem Brundtland, former prime minister of Norway who chaired the World Commission on Environment and Development, commonly known as the Brundtland Report, will provide her insights on the progress of sustainable development worldwide at the Canadian Responsible Investment Conference. The Brundtland Report is the groundbreaking study that pioneered the concept of sustainable development. The conference is the biennial summit on socially responsible investment in Canada. It takes place May 27 to 29 in Montreal, QC. For more information, visit


April 3, 2007

FSCO Reviewing CAP Guidelines

The Financial Services Commission of Ontario plans to undertake a review of the guidelines for Capital Accumulation Plans released by the Joint Forum in 2004. It also plans to develop recommendations for changes to the requirements for disclosure of plan information to pension plan beneficiaries to increase transparency. Both are included in its draft statement of priorities for the coming year. FSCO is required to publish its priorities by June 30 of each year. The statement identifies key challenges, outlines proposed strategic priorities, highlights initiatives, and notes recent progress on significant projects. Comment can be made on the draft until May 29.

Pre-funding Viable Alternative

Public pay-as-you-go pension schemes that have established reserve funds have successfully incorporated some advantages of pre-funding in their overall design, says a survey of public pension scheme reserve funds by the International Social Security Association (ISSA). The main findings of the survey are that managing reserves in funds that are legally separated from the associated social security scheme may have some advantages over managing reserves as part of the scheme. The survey confirms that the establishment of reserve funds to pre-fund benefits in public schemes has advantages and can be considered a viable alternative to compulsory individual pension or saving schemes.

UK Pension Deficits Down

Pension deficits at the UK’s top 100 companies fell to £21 billion, their lowest level in five years, says a Deloitte & Touche survey. Buoyant stock market returns and a fall in the price of bonds have helped boost corporate final salary pension funds in the UK. However, Deloitte is advising corporate sponsors to start looking at strategies which reduce the risk of a plan surplus. These include using assets such as real estate to provide security to the pension fund rather than making cash contributions.

Workplace Health Commitment Examined

The steps to follow for a successful strategy after an organization has made the commitment to workplace health will be the theme of the fifth Employer Forum: Workplace Health and Productivity.  This event will show how a properly designed, implemented, and measured workplace health strategy in an organization can decrease absenteeism and presenteeism, plus improve morale. It takes place April 25 to 27 in Niagara on the Lake, ON. For more information, visit

AllianceBernstein Launches Next-Generation Target-Date Portfolios

AllianceBernstein is offering customizable target-date retirement portfolios for large Defined Contribution plans. The portfolios offer plan sponsors the operational and reporting simplicity of prepackaged strategies with the benefit of customization, including a choice in how much of the portfolio is actively or passively managed. Plan sponsors can select the passive/active combination that best satisfies their preferred balance of expected return, risk, and costs and change the mix later, if they wish.

Commuted Value Interest Rate Assumptions

The interest assumptions required to calculate commuted values for an event which occurs in any month up to and including May 2007 are now available at An Excel spreadsheet on the website contains worksheets for:

Minimum Interest on Employee Required Contributions (including the 12 month average rates).


April 2, 2007

Employees Share Motivation

Canadian employees across all age groups are largely motivated by the same things to excel in their jobs, says The WorkCanada 2006/2007 survey of employee attitudes by Watson Wyatt Worldwide. The survey found the leading drivers of employee engagement include management’s ability to demonstrate leadership and strategic direction that builds confidence in the prospects for long-term corporate success; effective reward programs; and frequent, clear two-way employee communication.

Fidelity Changing Pension Plan

Fidelity Investments will end its traditional pension plan for roughly 32,000 of its employees. Instead, it will offer a richer 401(k) match and an annual credit to a health savings plan. The firm's 401(k) matching contribution will be increased from five per cent to seven per cent. 

Caisse Acquires STA Shares

The Caisse de dépôt et placement du Québec has acquired 1.9 million shares of Student Transportation of America Ltd. Student Transportation is the fifth-largest provider of school bus transportation services in North America.

Public Sector Pensions Greater

Fewer Americans age 50 and older received pension/annuity income from a public sector plan than from a private sector plan in 2005, but the public sector participant received a considerably larger amount, says research by the Employee Benefit Research Institute (EBRI). It says 15.7 per cent of men age 50 and older received private sector pension/annuity income in 2005, while 8.6 per cent of men age 50 and older were getting a public sector pension/annuity income. However, the average public sector income for men was $26,682, compared to $13,920 for the private sector. 

Kensington Closes Program

Kensington Capital Partners has announced the first closing of $80 million in its 2007 Private Equity Program. Closings were completed in Kensington’s institutional funds – the Canadian focused Kensington Private Equity Fund IV and the Kensington Private Equity International Fund I. Its private equity program was created to provide exposure to a diversified portfolio of global private equity investments, including private equity funds and direct investments in private companies. 

Tables Still Available

There are still tables available for the CPBI Benefit Ball ‘Carnevale di Venezia.’ The elegance and mystery of the annual ‘Carnevale di Venezia’ will be recreated – complete with jugglers, clowns, fountains, statutes, topiaries, and violinists – May 10 in Toronto. For more information, visit

SIO Wants Federal Action

The Social Investment Organization (SIO) is urging the federal government to implement the recommendations of the National Roundtables on Corporate Social Responsibility, a broad-based consultation on the social responsibility of Canadian corporations. Noting the importance of institutional investors in encouraging corporate social responsibility, the report calls for rules to require pension funds to disclose their investment policies and voting and recommends that the Canada Pension Plan Investment Board report annually on its responsible investment activities.

AIMA Debates Fund Of Funds

AIMA Canada’s fourth annual luncheon debate in true parliamentary tradition will be on the resolution that ‘Fund of Funds rather than Multi Strategy Funds are a more efficient means to gain hedge fund exposure.’ Speaking for the resolution will be Graham Thouret, president of Diversified Global Asset Management Corporation. Speaking against is Christopher C. Greer, principal and managing director of Forest Investment Management. It takes place at 12:15 p.m., April 12, in Toronto. For more information, visit

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