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News Archives - June / July 2007

Tuesday, July 31, 2007

Influence On Proxy Votes Limited

Proxy advisory firms may have limited influence over proxy voting because the large institutional investors that control the majority of proxy votes do independent research, says a report by the Government Accountability Office in the U.S. It says large institutional investors cast the great majority of proxy votes and they reportedly place relatively less emphasis on advisory firm research and recommendations. This could serve to limit these firms’ overall influence on proxy votes.

‘Stealing Healthcare Dollars’

‘Stealing Healthcare Dollars: Be Part of the Solution!’ is the theme of the 2007 Canadian Healthcare Anti-fraud Association annual conference. Attendees will be exposed to best practices and the latest techniques against healthcare fraud. It takes place September 20 and 21 in Toronto, ON. For more information, visit


Monday, July 30, 2007

Boards Drop Support

The boards of ABN Amro Holding NV are dropping their support for a takeover offer by Barclays PLC in the face of a higher bid by a consortium of banks led by Royal Bank of Scotland PLC. However, they said they could not endorse the RBS bid for the time being because of "significant unresolved questions," and they may yet decide to favor one offer or the other. The decision marks a significant break with the bank's previous policy, which has been to favor the Barclays bid.

Sub-prime Crisis Cause For Concern

Turbulence on financial markets from the U.S. sub-prime lending crisis has yet to reach systemic levels of intensity, but there are serious causes for concern, says a Moody’s Investors Service report. These include the significant level of asset destruction associated with the sub-prime crisis in the U.S. and concerns about the functioning of innovative financial products in times of stress. As well, signs of credit tightening are prompting many to wonder if a large-scale financial meltdown is looming.


Friday, July 27, 2007

Manulife Provides Absence Management Solutions

Manulife Financial’s Integrated Absence Solution will be used by Canada Post with its National Disability Management Program. The integrated absence solution will be customized to support Canada Post’s medical management of absences due to illness or injury. This represents the largest sale ever for Manulife's group benefits business. Since Canada Post is one of the country's largest employers, to service the contract, it has opened an absence management solutions office in Ottawa, in addition to expanding in four other offices across Canada.

Reduce Risk By Investing Globally

Canadians with the bulk of their investment portfolio in this country’s equity market should reduce risk and look overseas for future gains, says Don Reed, president and CEO of Franklin Templeton Investments. Speaking at its annual Outlook and Opportunities Forum, he said “ Canada ’s strong markets cannot go on forever.” The S&P/TSX is up more than 80 per cent in value since 2002, but three sectors have driven a lot of the gains – energy, materials, and financial services. Today, they account for 75 per cent of the value of the Toronto Stock Exchange. “For many Canadians, it’s time to diversify,” said Reed. “Canadian markets have had a strong five-year run. But no trend goes on forever. Investors need to lock in profits at home, diversify globally, and secure future growth.”

Obligation Increases

Capital market results in the second quarter have increased the projected benefit obligation for Towers Perrin’s benchmark plan, says its Capital Market Update. This is the result of the combination of a material increase in the liability discount rate and weak asset returns. The net effect on its benchmark plan was an increase of 3.7 per cent in the projected benefit obligation funded ratio for the quarter.

Young Plan Better For Retirement

Canadians under 35 are well ahead of past generations in terms of saving for retirement, says a survey sponsored by Edward Jones. The survey revealed that 70 per cent of Canadians between the ages of 25 and 34 have started a savings plan. In comparison, only 25 per cent of those over 50 said they were saving by that age. Most of them waited until they were over 35 to begin saving. Even younger Canadians are getting the retirement message, with close to one-third of those between the ages of 18 to 24 already saving for retirement.

Penny Trading Starts

Penny trading in options on nine Canadian equities and one equity index fund has been introduced on the Montreal Exchange (MX) equity options market. This innovation, enabled by MX’s SOLA technology, permits trading in increments of a penny rather than a nickel. Earlier this year, the MX technology team introduced penny trading on the Boston Options Exchange (BOX), as part of a U.S. pilot project, with positive results.

Monthly Update of Pension Plan 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 September 2007 are now available at
An Excel spreadsheet on the website contains six worksheets


Thursday, July 26, 2007

CPPIB Buys UK Shopping Centre

Henderson Global Investors and the Canada Pension Plan Investment Board will acquire Whitefriars Quarter shopping centre in Canterbury, Kent, from Land Securities. The Henderson UK Shopping Centre Fund and the CPP Investment Board have formed a 50/50 joint venture to acquire the shopping centre, which comprises 600,000 square feet of retail space in the cathedral city’s centre. In addition to funding its 50 per cent interest in the Whitefriars joint venture, CPPIB has invested in the UK Shopping Centre Fund, which already holds interests in four core quality shopping centres in major UK cities.

MX Launching Carbon Future Trading

The Montréal Exchange (MX) and the Chicago Climate Exchange plan to launch an MCeX carbon futures contract on the MX platform by the end of 2007. The decision to launch trading in futures products based on underlying Canadian emission credits comes after an assessment of the federal government’s air emissions policy and industry consultations. The partners are convinced that there will be growing demand for environmental derivatives. This is another step towards establishing the leading market for publicly traded environmental products in Canada.

Stock Market Drives Institutional Returns

Corporate and public fund plans in the U.S. posted median returns of 4.4 per cent for the second quarter of 2007, says data in the Northern Trust Universe. Emerging markets equity was the top returning asset class posting a median return of 14.9 per cent – more than double the 7.1 per cent return of its international developed market counterpart. The top returning plans in the universe had large allocations to international equity and small allocations to fixed income, relative to other plans.


Wednesday, July 25, 2007

Sponsors Cope With Challenges

Government cost-shifting to the private sector and rising drug costs and utilization rates as baby boomers age are some of the challenges facing employee benefit plan sponsors, says Marie Sonnenberg, marketing director for Mercon Benefit Services. Speaking at the International Foundation’s ‘Concepts and Practices of Canadian Benefits for Canadian and U.S. Corporations’ in Toronto, ON, she said employers are turning to solutions such as wellness programs to help employees manage their own health. However, she does not expect to see the consumer-drive health trend now occurring in the U.S. to come to Canada.

Investor Confidence Slips

The State Street Investor Confidence Index fell 10 points from 97.7 to 87 in July, particularly as a result of a loss of confidence by North American institutional investors. This is the biggest monthly fall since January 2004 and one of only three double-digit declines in the index's seven-year history. The conflicting signals being sent by individual earnings announcements, coupled with the likelihood of tighter monetary conditions than previously expected, have resulted in a more cautious pattern of investor behavior this month.

Modest Gains For Pension Plans

Even though Canadian and foreign equity markets have posted strong returns, the overall median return is lower than the expected return of most pension funds, says Morneau Sobeco’s Performance Universe of Pension Managers’ Pooled Funds for the second quarter of 2007. This situation can be explained by capital losses experienced by bond portfolios, particularly long-term bonds that resulted from the increase in interest rates and by the strong performance of the Canadian dollar relative to the U.S. dollar and the euro. However, the increase in interest rates has slightly reduced the value of the actuarial liability calculated on a solvency basis. Overall, the financial situation of pension funds is similar to what it was at the end of 2006. Diversified pooled fund managers posted a median return of 1.2 per cent in the second quarter. Since the beginning of the year, pension funds have obtained a median return of 2.75 per cent.

Retirement Accounts Reach $16.4 Trillion

Americans have accumulated a record $16.4 trillion in retirement accounts, with about half of it in company-sponsored plans such as 401(k)s and Individual Retirement Accounts, says a study by the Investment Company Institute. The Washington-based trade association says that the total as of year-end 2006 was up 11 per cent from the $14.7 trillion at the end of 2005 and nearly 55 per cent higher than the market-depressed low of $10.6 trillion at the end of 2002.

Teachers Buys Infrastructure Stake

The Ontario Teachers' Pension Plan Board has agreed to buy a 15 per cent interest in the LLX Logistica S.A. subsidiary of MMX Mineracao e Metalicos S.A. of Brazil. The Brazilian-based logistics business remains 85 per cent owned by MMX, a Brazilian iron ore producer which spun off its slurry pipeline and port infrastructure assets into LLX last spring. Ontario Teachers has been an active investor in foreign infrastructure which it, like other pension funds, regards as a solid source of long-term returns protected from inflation.


Tuesday, July 24, 2007

Canadians Prefer Guarantee Of Pay

American firms with employees in Canada soon realize that Canadian attitudes towards compensation are different, says Bonni Titgemeyer, managing director of The Employers’ Choice Inc. Speaking at the International Foundation’s ‘Concepts and Practices of Canadian Benefits for Canadian and U.S. Corporations’ in Toronto, ON, she said, for example, market-pay systems are almost unheard of in Canada. Canadians are willing to earn less if they are guaranteed that amount and it is much harder to attract and retain Canadian employees with commission pay arrangements, she said.

FORTUNE Firms Committed To Plans

The rate of pension plan freezes among FORTUNE 1000 firms has slowed and the majority of companies with Defined Benefit plans are committed to keeping them, say two studies by Watson Wyatt Worldwide. An analysis of pension plan sponsorship among FORTUNE 1000 companies shows that the share of plan sponsors freezing their plans dropped from seven per cent in 2006 to four per cent in 2007. Additionally, a study of 300 organizations with pension plan assets of more than $100 million found that 59 per cent of companies that have a DB plan open to new hires have made a formal decision to keep their plans open.

Strategy Celebrates Anniversary

JPMorgan Asset Management is celebrating the three year anniversary of its Large Cap 130/30 strategy. The strategy was established in July 2004. Utilizing active stock selection with a systematic valuation process, the strategy invests in a diversified portfolio of U.S. large cap equities with a target average exposure of 130 per cent long and 30 per cent short.

University Opts For RBC Dexia

RBC Dexia Investor Services has been selected as custodian and securities lending provider for the Université du Québec's $2.3 billion pension fund. The university says the deciding factor revolved around its high-touch approach to servicing its clients.


Monday, July 23, 2007

Soaring Loonie Dampens Pension Returns

Interest rate jitters and the strengthening Canadian dollar largely erased healthy stock market gains in the second quarter, says a survey by RBC Dexia Investor Services. Its pension universe showed Canadian pensions earned 0.9 per cent in the quarter ended June 30, 2007, bringing year-to-date totals to 2.9 per cent. The loonie's dramatic rise against most major currencies prevented most Canadian pension plans from benefiting from buoyant equity markets outside the country. The MSCI World index's six per cent rise in local currency terms translated into a loss of 1.8 per cent for the quarter, once Canadian exchange rates were taken into account.

CI Appoints KBSH

CI Investments Inc. has appointed KBSH Capital Management Inc. as a portfolio advisor to its American Managers Corporate Class, a multi-manager, multi-style U.S. equity fund. “KBSH is an institutional money manager with an exceptional track record in choosing U.S. stocks using a growth-oriented investment approach,” says Peter Anderson, CI’s CEO. KBSH has also been appointed as a portfolio advisor to the Select U.S. Equity Managed Corporate Class and Select U.S. Equity Managed Fund.

Essential Pension Course Returns

The legal obligations of those with responsibility for pension plans and best practices for pension governance, funding, and investment will be among the areas covered at Osgoode Professional Development’s 3rd Annual ‘The Essential Course in Pensions.’ Set for October 22 and 23, it bring together more than 25 top legal, HR, and pension experts including Bethune A. Whiston, of Morneau Sobeco, and Dona Campbell, of Sack Goldblatt Mitchell LLP. It also features an optional post-conference workshop on cross-border pension issues on October 24. It takes place in Toronto, ON. For more information, visit

Aspiria Acquires LINK

Aspiria Corp., a national provider of Employee Assistance Programs (EAP), and LINK Employee Assistance Professionals Inc., an Ontario-based regional provider of EAPs, have merged. The combination of Aspiria and LINK establishes an expanded suite of EAP offerings coupled with web-based technologies.


Friday, July 20, 2007

Dow Industrials Top 14,000

The Dow Jones industrial average has closed above the 14,000-point mark for the first time ever, at 14,000.41. That’s up 82.19, or 0.59 per cent, from Wednesday. The global dimension of U.S. corporations represented in the Dow and other indexes is being cited for the performance. The Treasury Department reported that international buying of U.S. financial assets shot to a record $126.1 billion in May.

Pension Income Splitting FAQ Released

The Canada Revenue Agency has issued a list of frequently asked questions about pension income splitting. Beginning with their 2007 income tax returns, Canadian residents will generally be able to allocate up to one-half of their income that qualifies for the existing pension income tax credit to their spouse (or common-law partner) for income tax purposes.

Interest In Investments Rises

Canadians’ interest in investments gained slightly in July and held near its seven-year peak, says a poll for Manulife Financial. The Manulife Investor Sentiment Index gained a single point to +31, which is the third straight quarter it has hovered near its highest levels since 2001. “Canadians remain generally positive about long-term investing,” says Paul Rooney, president and CEO, Manulife Canada. “The TSX continues near record highs, real estate markets remain active in Canada, and the economy remains relatively stable. Interest rates and strength of the Canadian dollar are two factors that haven’t taken much steam from the latest index.”


Thursday, July 19, 2007

Humphrey Heads CPBI Board

Burk Humphrey, from Sun Life Financial – Group Retirement Services, is new chairman of the Canadian Pension & Benefits Institute (CPBI) board of directors. Vice-chairman and secretary is Kevin Press, from Sun Life Financial – Total Benefits. He represents the Ontario region. Board members are Dale Weldon, from Johnson Inc., representative of the Atlantic region; Normand Vachon, from TD Asset Management Inc.; representative of the Quebec region; Barbara Degenstien, from Saskatchewan Legal Aid Commission representative of the Saskatchewan region; Larry Findlay, from Whynot Holdings – Benefit Consultants, representative of the Alberta North and South regions; and Cheryl Neighbour, from the University of British Columbia, Faculty Pension Plan, representative of the Pacific region.

ABN Amro To Meet With Rivals

ABN Amro will meet with a consortium led by Royal Bank of Scotland (RBS) and with rival bidder Barclays PLC to discuss the implications of their takeover bids. However, it says it has "no intention of making any major asset disposals at the current time." ABN agreed to an offer from Barclays in April in a move seen as a poison pill measure intended to derail an RBS bid in the works, since RBS wanted LaSalle. Last week the Dutch Supreme Court upheld the LaSalle sale as legal. RBS and its partners Fortis NV and Banco Santander Central Hispano SA have repeated their intention to bid for ABN on the condition it not sell any more major assets.


Wednesday, July 18, 2007

Retirement Gap Opening

Employees who fail to learn how to manage their own retirement investments and companies increasingly placing this burden on their workers are combining to open a gap of under-funded plans and needy seniors, says T.E. Wealth. With many companies moving away from Defined Benefit pension plans to alternatives such as Defined Contribution pension plans and RRSPs, “employees must be able to responsibly manage their own retirement plans and the sources of retirement income from personal savings,” says Karen Hall, vice-president, financial education and employer services, in Calgary, AB. She says the core of the problem is the inability of many Canadian workers to read and understand detailed plan summaries, pension statements, and investment performance numbers.

Benecaid Launches Travel Insurance Product

Benecaid Health Benefit Solutions Inc. has launched an individual and group travel product. New and existing clients of Benecaid will be moving to TravelAssist as of August 1. It provides group coverage for 30, 60, or 90 days, including $5 million of coverage per trip per person and a $75,000 referral benefit to cover medical and transportation costs in excess of provincial coverage. 

DOW Closing U.S. Plans To New Hires

Dow Chemical Co. will close its U.S. Defined Benefit plans to new salaried employees as of January 1, 2008. It will offer a cash balance plan instead. Dow will contribute five per cent of annual pay for each employee into the new plan.

Credit Derivative Market Grows

While the credit derivatives market continues to expand at a remarkable pace, concern grows about how the market would deal with an eventual downturn, says a report from Fitch Ratings. The total amount of credit derivatives bought and sold reached nearly $50 trillion at year-end 2006, an increase of 113 per cent over the $23.4 trillion reported for year-end 2005. However, a number of market participants expressed concern for how smoothly the market can deal with an eventual downturn in the credit cycle. Specifically, some of these worries include liquidity in the event of a downturn, the impact that unwinding of system leverage can have on volatility, and settlement following a credit event.

Accounting Rules Could Trigger Changes

New accounting rules could trigger the next significant change in pension coverage, says an EBRI report from its spring policy forum of experts. It says the anticipated FASB rule bringing U.S. accounting procedures in line with international standards “is generating growing anxiety” among employers and pension experts. Pension experts predict the rule could have a dramatic negative effect on many plan sponsors’ financial reports, which in turn could accelerate the long decline in traditional pension coverage in the United States.


Tuesday, July 17, 2007

Pension Funds Want Rule Scrapped

Some of Canada's largest pension funds want another ‘30 per cent’ rule scrapped. Funds including the Ontario Municipal Employees Retirement Board and the Ontario Teachers Pension Plan want a 1985 rule which says pension funds cannot elect more than 30 per cent of the directors of any public or private company in which they invest removed. They claim it dates from a time when pension funds were not active and it now puts them at a disadvantage in takeovers, forcing them to walk away from some deals. However, the rule does not limit funds from buying more than 30 per cent of the equity of a company.

Symposium Provides Benefits Updates

More than 500 employee benefits and compensation professionals from Canada and the United States will visit Seattle, WA, September 16 to 19 for the 26th Annual ISCEBS Employee Benefits Symposium. The event is one of the largest gatherings of credentialed benefits and compensation professionals in North America. Speakers include Laura Mensch, senior vice-president, national practice chair of health strategies, Aon Consulting; who will speak on employees driving benefits decisions and Robert J. Crowder, president, The Benefits Trust; who will identify creative applications of healthcare spending accounts. For more information, visit


Investment Technology Group, Inc. (ITG), a provider of technology-based trading services and transaction research, has launched MATCH Now, an alternative market that offers continuous, price-improved matching for dealers and clients trading Canadian equities. Orders for TSX-listed securities can be matched passively or swept through MATCH Now to the TSX or any another public marketplace. Executions occur inside the Canadian bid-offer spread. MATCH Now, a product offering of TriAct Canada Marketplace LP, a subsidiary of ITG Canada Corp., is a broker-neutral facility. TriAct does not participate as agent or principal in any trade.


Monday, July 16, 2007

U.S., UK Most Open For Private Equity

Canada has moved up one spot to third as a country most open private equity investment.  Apax Partners’ ‘Private Equity in the Public Eye’ report ranks the U.S. and UK as the countries most open to private equity investment. Following Canada are Denmark, Sweden, and Switzerland. Developing markets such as Mexico, Brazil, Russia, China, and Turkey are at the bottom of the 33-country list.

Emerging Markets Outperform

Emerging markets equity returns outpaced developed markets in the second quarter, returning 14.8 per cent, says Standard & Poor’s global stock market review. For the three months ended June 30, 23 of the 25 emerging markets finished in positive territory with an average gain of nearly 17 per cent with only Jordan and Russia showing losses. Developed markets returned 6.8 per cent in the same period.


Friday, July 13, 2007

Caisse Group Buys Hotels

An investment group led by the Caisse de dépôt et placement du Québec is buying Legacy Hotels Real Estate Investment Trust, which includes the Fairmont Le Château Frontenac in Quebec City and Fairmont Royal York in Toronto. The deal is for a portfolio of 25 hotels across Canada and in two U.S. cities, operating under the Fairmont and Delta brands. The Caisse's partners in the deal are Westmont Hospitality Group, a large private owner of hotels, and InnVest REIT, which already owns 135 hotel properties. Under terms of a post-acquisition reorganization, Legacy's Fairmont-managed hotels will be allocated to Cadbridge Investors LP, a partnership of the Caisse and Westmont, while the Delta properties will primarily go to InnVest.

Climate Change Survey Shows Mixed Attitudes

HSBC’s first international survey of public attitudes towards climate change shows that people in developing economies exhibit the greatest concern, commitment, and optimism towards the problem of climate change while those in developed economies show the greatest indifference, reluctance, and fatalism. Overall, it reveals that citizens of China and India are most optimistic that the problem of climate change can be overcome, while those in France, Germany, and the UK are least optimistic that a solution will be found. The index also highlights the emergence of so-called ‘green rejection’ in the developed world – a rejection that climate change is a problem, of solutions to it, and of the institutions proposing them. Green rejection is strongest in the UK and Germany, where respondents were among the least engaged and optimistic about the challenge. In the United States, respondents were by far the most confident and optimistic of all the developed economies surveyed.

More Companies Report DB Shutdowns

Roughly two-thirds of U.S. companies with Defined Benefit pension plans have either closed the plan to new hires or frozen it in the past two years, says a survey by Employee Benefit Research Institute and Mercer Human Resource Consulting. Increasing pension plan costs and pending accounting rule changes have contributed to the reductions. In the last two years, about 35 per cent of the respondents had either closed or frozen their pension plans, and about 33 per cent of respondents indicated they were likely to close or freeze them in the next two years. More often, plan sponsors indicated that they would simply close the plans to new hires. Most employers that reduce or shut down DB plans increase employer contributions to Defined Contribution plans.

Beaver Honoured For Contribution

Elizabeth Beaver, senior manager, business recovery, at CIBC Mellon, has earned the Canadian Award for Business Continuity Management. The honour was presented at the 17th World Conference on Disaster Management (WCDM). It recognizes an individual who has demonstrated outstanding achievement in, or contribution to business continuity management (or continuity of operations planning). Beaver oversaw crisis management and business recovery planning programs for more than 80 business functions at CIBC Mellon across Canada.


Thursday, July 12, 2007

Funds-of-funds Leading Trend

Funds-of-funds have quietly become a leading trend in the investment industry, says Dale Powell, direct consultant for Morningstar. Speaking at a session on its Encorr and Direct products, he said funds-of-funds products have outsold stand-alone funds so far in 2007 and now account for nearly 20 per cent of industry assets. There are several reasons for the rising interest in them. First, he said they instantly provide a diversified portfolio. As well, their longer holding period reduces the possibility of chasing performance which can drive up fees.

Companies Must Have Right To Surplus

New guidance on how pension fund surpluses are treated on company balance sheets could have serious implications on the way employers view pension funding and investment risk and on how pension funds are invested in the future, says Mercer Human Resource Consulting. New guidelines on the International Accounting Standards Board’s IAS19 say companies can only take credit for a pension fund surplus if they have the "unconditional" right to a refund of the surplus or if they can use it to reduce future employer contributions. The greatest impact of the new guidelines will be felt in countries with strong minimum funding rules, such as the UK, where many companies and trustees are discussing setting funding policies and investment strategies which aim to accrue assets over and above the current IAS19 accounting liability. The new guidelines will effectively require these companies to account for liabilities at a higher funding target, meaning any funding surplus will disappear.

HRPAO Joins With G-Force

The HRPAO and G-Force will present the 2007 Career & Diversity Forum November 22 in Toronto, ON. The forum is a multi-faceted event providing leaders with an opportunity to develop diversity competencies. For more information, visit


Wednesday, July 11, 2007

Lafarge Chooses ACS/Buck

ACS/Buck has been retained by Lafarge to continue providing administration services for Lafarge's Canadian Defined Benefit pension plans. ACS/Buck has provided services to Lafarge since 1997. More than 6,000 active employees and retirees participate in the 16 DB pension plans offered by the company. ACS/Buck will maintain a centralized database of all plan records, provide employee benefit statements and benefit calculations, process pension payments, and assist with employee communication materials.

Verdict Provides Incentive To Convert

The verdict in the Kerry Case gives plan sponsors huge incentives to convert to Defined Contribution pension plans, says Ari Kaplan, of Koskie Minsky. Speaking at the CPBI Ontario Region breakfast session ‘Kerry Case – Implications for Pension Plan Sponsors,’ he said the decision actually provides some of the first law on DC plans. In this case, a sponsor was allowed to use surplus following the conversion of a Defined Benefit pension plan to a DC plan and take a contribution holiday for its contributions to the new DC plan. As a result, Kaplan said more clarity is needed on the difference between plan conversion and plan mergers.

Interest Rates Help Plans Recover

The financial health of Canadian pension plans continued to strengthen in the first half of 2007, adding to the improvement made in 2006. As a result, the Mercer Pension Health Index is now back to levels not seen since the fall of 2004. “The improvement is due to an increase in long-term interest rates that have lowered the cost of pensions,” says Paul Forestell, retirement professional leader. Long-term rates have risen by about half a per cent since the end of 2006.

Retirement Primer Course Online

In co-operation with the group insurance industry, the International Foundation, through its CEBS program, is now offering a Group Retirement Plans Online Primer Course for Canadian plan sponsors and providers. Funded by industry, this 25-hour course offers educational tools for introducing individuals with only minimal knowledge and experience to the basics of the group retirement business. For information, visit

Healthcare Plan Knowledge Lacking

Many U.S. employees don't understand how their healthcare coverage works and admit their familiarity with the most basic healthcare vocabulary needs improvement, says a survey by Watson Wyatt. The survey found that a top challenge for 43 per cent of workers is understanding what their healthcare plan covers. Moreover, less than half are comfortable explaining common health benefit terms such as co-pay or deductible to a friend or co-worker. This makes it hard for employers to ask employees to take more responsibility for their healthcare.  

Emergency Preparedness Examined

The HRPAO’s Third Annual Emergency Preparedness Conference will take place November 15 in Toronto, ON. With maintaining business continuity critical, attendees will learn how to plan for the unknown and ensure business continuity. For more information, visit


Tuesday, July 10, 2007

Pension Funded Ratios Reach Highest Levels In Five Years

Pension funded ratios have reached their highest levels in five years as conditions for Canadian pension plans steadily improve, says analysis by Watson Wyatt Worldwide. For a typical pension plan, the pension funded ratio (the ratio of plan assets to plan liabilities) increased to 102 per cent at the end of the second quarter of 2007, up from 86 per cent at the beginning of 2006, on a GAAP (Generally Accepted Accounting Principles) basis. While the stock markets have been volatile, significant increases in bond yields and large contributions towards earlier plan deficits are the major reasons for the improvement.

SSgA Launches Index Plus Edge

State Street Global Advisors (SSgA) has launched a Canadian Index Plus Edge strategy, designed to provide a bridge between low risk/low value-added passive portfolios and high risk/high-value added active strategies. It further extends SSgA's suite of investment strategies that use ‘Edge’ methodology, an extension strategy widely known as ‘130/30,’ that seeks to provide the best of long-only and long/short approaches. The strategy takes short positions up to 10 per cent, which in turn fund an additional 10 per cent of long positions, thereby maintaining net market exposure at 100 per cent.

Legal Cases Examined

The HRPAO’s 14th Annual HR Law Conference will take place October 4 in Toronto, ON. It provides an opportunity to learn about today’s critical employment law issues from those directly involved in precedent-setting cases. Three Superior Court justices, 19 employment lawyers, and an open forum will be featured. For more information, visit

DC Plan Sponsors Must Evolve With Changing Fiduciary Standards

Defined Contribution retirement plan sponsors must consider and adapt to the rapid evolution in fiduciary standards in order to meet the Employment Retirement Income Security Act of 1974 (ERISA) ‘Prudent Expert’ test, says an AllianceBernstein white paper. ‘Evolving Fiduciary Standards for Defined Contribution Plan Sponsors’ says ongoing litigation has put plan sponsors on notice that participants and their legal advisors expect plans to carefully consider investment options and fees. As a result, the choice of a default option is one of the most critical decisions a sponsor must make as fiduciary standards change.

U.S. Plan Funding Level Unchanged

The level of funding for the typical U.S. pension plan was unchanged in June, as a decline in equity markets during the month was offset by a corresponding decline in plan liabilities, says BNY Mellon Asset Management’s Pension Liability indexes. The typical plan’s assets and liabilities both declined by one percentage point in June, for a year-to-date funded status improvement of 7.4 percentage points.


Monday, July 09, 2007

Working Group Put Together

The Canadian Securities Administrators has put together a CSA-Industry Working Group to look at the rules regarding institutional trade matching and settlement. The working group, consisting of industry representatives and staff of the CSA, will act as an advisory group in identifying and resolving issues in relation to the regulation of institutional trade matching and settlement.

Tory Would Unlock Pensions

Ontario Conservative Leader John Tory would unlock pensions for seniors and retirees if he wins the October 10 provincial election. His plan would give seniors and retirees access to 50 per cent of their pension at age 55 and the remaining 50 per cent at age 65.

Fraud Association Meets

‘Stealing Health Care Dollars: Be Part of the Solution!’ is the theme of this year’s Canadian Health Care Anti-fraud Association conference. Topics include risk management, privacy and consent, and identity theft. It takes place September 20 and 21 in Toronto, ON. For more information, visit

Sun Website Using Assistive Technology

Sun Life Financial is making its plan member services site accessible to Canadians who need to use assistive technology to access information on the internet. Customers who may benefit from this innovation are those with a visual, hearing, or physical activity limitation who may have difficulty navigating the internet on a computer in a standard way. Statistics Canada says more than 12 per cent of Canadians have some type of activity limitation.


Friday, July 06, 2007

Mellon Purchases Share Of ABN AMRO

Mellon Bank N.A. will purchase ABN AMRO's 50 per cent share in ABN AMRO Mellon Global Securities Services B.V., the joint venture company established by the shareholders in 2003 to provide global custody and related services to institutions outside North America. ABN AMRO Mellon will become a part of The Bank of New York Mellon Corporation, the company created by the merger of The Bank of New York Company and Mellon Financial Corporation.

Groupworks Acquires Gallivan

Groupworks Financial Corp. will acquire Gallivan & Associates Student Networks Inc. Gallivan is a group benefits advisory firm with offices across the country. Groupworks, a consolidator of independent benefit and pension advisory firms in Canada, will maintain the Gallivan brand.

Investors Going Greener

Most of the world’s largest institutional investors are incorporating environmental, social, and governance issues into their investment policies, says a survey by Principles for Responsible Investment, a group established by the United Nations representing 20 large institutional investors from 12 countries. About 83 per cent of investment managers and 67 per cent of plan sponsors have adopted a formal policy on responsible investment, and five per cent of investment managers and 15 per cent of plan sponsors expect to develop such a policy this year.

State Street Manages $100 Billion

State Street Global Advisors has reached $100 billion in assets under management for its currency strategies. SSgA’s currency assets have more than doubled over the last three years, reflecting the increasing importance of currency strategies in the management of pension fund assets. Currency risks can be managed passively or actively in an effort to enhance risk-adjusted returns. Passive management of these risks can reduce volatility, allowing the risk savings to be allocated elsewhere in the portfolio. Alternatively, currency exposures can be managed actively to generate pure alpha. A third option is to combine these approaches in an alpha/beta framework.


Thursday, July 05, 2007

Dickson Gets OSFI Job

Julie Dickson has been appointed superintendent of Financial Institutions. She joined OSFI in 1999 and was assistant superintendent, regulation sector, from January 1, 2000, to June 2006. She was named deputy superintendent in June 2006. Her term is seven years. She has been acting superintendent since October of last year when Nick Le Pan left the federal regulator.

RBC And Jantzi Partner On SRI Funds

RBC Asset Management has partnered with Jantzi Research Inc. to launch three socially responsible investing (SRI) funds. The balanced, Canadian equity, and global equity funds provide options for investors who believe environmental, social, and governance factors should be primary considerations in making investment decisions. They will be managed using Jantzi’s SRI screening skills and RBC’s investment process.

Russell Adds New Value Manager

Russell Investments Canada Limited has appointed AllianceBernstein LP to manage a portion of its Overseas Equity Fund. AllianceBernstein will manage approximately 20 per cent of the fund, specializing in value investing.


Wednesday, July 04, 2007

Kerry Implications Examined

The implications of the Kerry Case for pension plan sponsors will be the focus of a CPBI Ontario breakfast seminar July 10 in Toronto. A panel of lawyers will explain how the Ontario Court of Appeal decision in Kerry (Canada) Inc. v. DCA Employees Pension Committee clarifies issues such as when administrative costs of a pension plan are payable from a pension fund; when Defined Benefit plan surplus can be used to pay the current service costs of a Defined Contribution component of the same plan; and consequences where member notice of a conversion option is not adequate. For more information,

FTSE100 Pensions In Surplus

The pensions of the FTSE100 have now achieved an overall surplus of ?4 billion, says a study by Pension Capital Strategies Ltd. (PCS). This marks the first time in five years that the plans achieved that amount of assets. It represents a "remarkable turnaround" from its March 2007 study, which found that FTSE100 pension schemes had deficits of ?20 billion.

Delivery Of HR Changing

As companies change benefit and compensation plans, they also are transforming the way they administer and communicate these programs, with an emphasis on more fully engaging employees, says a Watson Wyatt Worldwide survey. The 2007 HR Technology Trends survey of 182 companies found that one in five expects to change its HR delivery structure in the coming year. Among the most prominent changes companies expect to make in the next two years are putting in place a healthcare portal that provides employees with health improvement information and offering total compensation information to employees via the Web. In addition, one in four companies is planning to change the way its traditional Defined Benefit pension is administered and delivered, often to co-incide with a broader pension plan redesign.


Tuesday, July 03, 2007

Teachers Get Bell

A private partnership led by the Ontario Teachers Pension Plan Canada has bought Bell Canada. The partnership includes U.S.-based Providence Equity Partners and Madison Dearborn Partners, LLC. Teachers was BCE's largest shareholder with a 6.3 per cent stake.

DB Demise Overstated

Sixty per cent of investment consultants believe that the demise of the Defined Benefit pension plan has been overstated, says the Institutional Sales and Relationship Management report by Cerulli Associates. While 22 per cent of consultants saw a decline in their DB clients, 33 per cent saw increasing business with DB plans in 2006.

State Street Completes Acquisition

State Street Corporation has completed the closing of its acquisition of Investors Financial Services Corp. Ronald E. Logue, chairman and chief executive officer, says the acquisition allows State Street to expand its “capabilities beyond basic custody to focus on key value-added services.”

Monthly Update of Pension Plan 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 August 2007 are now available at

An Excel spreadsheet on the website contains 6 worksheets

For Marital Breakdown, the normal method uses the same methodology for partial indexing as the 1993 Standard for Marital Breakdown with no rounding


Friday, June 29, 2007

Niche Players Can Survive

Niche players who offer truly distinctive offerings and large global players are squeezing the middle out of business, says James P. Palermo, vice-chairman, asset servicing, Mellon Financial Corporation. Speaking at The Bank of New York and Mellon Merger luncheon ‘Creating the Global Leader in Asset Management and Securities Servicing,’ he said the industry is currently in the midst rapid transformation with a number of mergers taking place. However, he warned that increased regulatory activity is threatening the competitiveness of the U.S. While increased scrutiny is needed, he says it has gone “too far.”

U.S. Regulations Affect Canadian Employers

Regulations under Section 409A of the U.S. Internal Revenue Code relating to deferred compensation contain a number of significant provisions that may affect Canadian employers and require amendments to their deferred compensation plans, says a Mercer Communiqué. The regulations have been released in final form and apply as of January 1, 2008. For Canadian registered pension plans which cover ‘rank and file’ employees, the foreign broad-based retirement plan exemption under the final regulations may be available with regards to participation by U.S. taxpayers who are working in Canada. This exemption would not be available for a registered pension plan which is not ‘broad-based’ and which covers U.S. taxpayers working in Canada. As well, this exemption would not be available for a registered pension plan which covers U.S. taxpayers working in the United States.

Commission Posts Research Summaries

The Ontario Expert Commission on Pensionshas posted summaries of its research program on its website. The commission has so far commissioned 17 projects as part of its research program. Topics include factors affecting trends in occupational pension plans in Ontario, protecting the pension fund, and alternative governance models. These studies are expected to be completed late in 2007 and will be made available at a date to be announced. They can be found at Public hearings will take place this fall. The schedule and contact details are at

Northern Enhances Derivatives Trading Capabilities

Northern Trust has expanded its services for over-the-counter (OTC) derivatives trading to include independent valuation of a comprehensive array of derivatives for its custody, fund administration, and investment operations outsourcing clients. The automated solution links to third-party specialist providers of OTC derivatives valuations and utilizes a system of tolerance checks to arrive at optimum pricing and performance measurement for the complex financial instruments.

Managers Bullish On Loonie

More than 50 per cent of Canadian investment managers are now bullish on the Canadian dollar compared to 25 per cent a quarter ago, says the Russell Investment Manager Outlook. It found 68 per cent of managers believe the Canadian equity market is fairly valued, which is 19 per cent higher than a year ago. However, sentiment for the bond market turned sharply negative in the second quarter and the number of bullish bond managers fell 24 per cent to just six per cent.


Thursday, June 28, 2007

Retirees Sue Labatt

A group of non-union Labatt retirees have launched a class action suit against the company claiming it broke a promise to provide them with almost unlimited health benefits. In a statement of claim filed in Ontario Superior Court, the plaintiffs accuse the company of breach-of-contract, conspiracy, and unjust enrichment by capping benefits for retirees. Last December, Labatt announced changes to retiree benefits including a $50,000 cumulative life-time cap on health and drug benefits.

Mellon Unveils Next Generation Toolkit

Mellon Analytical Solutions has announced the next generation of its Report Writers capability, the group's report writing and query tool that helps institutional investors build customized reporting and analysis for performance and analytics. Mellon currently provides a range of standard reporting options to a global client base. This new tool gives clients more control of their investment reporting.

Pier 21 Using Linde As Sub-advisor

Montreal-based Pier 21 Asset Management Inc. will use Linde Partners Asset Management SA, of Luxembourg, as sub-advisor for its global value and Japanese equity strategies, which are now available to Canadian institutional investors. Linde is a specialized investment boutique that uses a disciplined value, absolute return philosophy.

Russell Adds Growth Manager

Russell Investments Canada Limited has appointed Cornerstone Capital Management, a Minnesota-based money management firm, to manage a portion of the Russell U.S. Equity Fund and Sovereign U.S. Equity Pool. Cornerstone replaces Ark Asset Management Co., Inc. as a manager. The manager change was completed as part of Russell's multiple-manager process, which seeks to emphasize stock selection skill while providing broad diversification in each of its pools and funds.

Dutch Needs Alternatives To DC

The Dutch pensions sector needs to develop new alternatives to Defined Contribution  plans, says the president/supervisor of De Nederlandsche Bank. Nout Wellink sees opportunities for new products that are tailored to individuals, but maintain the benefits of a collective system. The innovation should involve both assisting individuals with complex choices and making risk-pooling instruments more readily available, he says.

Benefits Remain Stable

While benefits offered by employers remained mostly the same in 2007 as in 2006, there was a slight decrease in the number of organizations that offered financial services benefits to employees, says the Society for Human Resources Management’s 2007 Benefits Survey. The survey found a decrease in individual investment advice and retirement planning services offered by employers in 2007. Other benefits that decreased in 2007 included automobile allowances/expenses, traditional Defined Benefit pension plans, full flexible benefits plans, employee discounts on company services, and commissions and loans to employees for emergency/disaster assistance.  


Wednesday, June 27, 2007

UBS Launches DC Group

UBS Global Asset Management has formed a Defined Contribution and retirement solutions group. The group’s primary objectives include introducing an optimal investment strategy to target date funds, developing ‘longevity solutions’ to bring Defined Benefit-style advantages to DC plans, and providing plan sponsors with a single end-to-end solution covering both DB and DC plans.

Caisse Ends BCE Examination Work

The Caisse de dépôt et placement du Québec has withdrawn from the consortium formed April 17 to investigate privatizing BCE Inc. The consortium had consisted of the Caisse, The Canada Pension Plan Investment Board, the Public Sector Pension Investment Board, and Kohlberg Kravis Roberts & Co.

DC Search Activity Drops

Search activity decreased for the DC market in 2006, but is expected to remain at the same level for 2007, says Mercer Investment Consulting data on investment manager search activity for 2006. It says performance and expenses will continue to be carefully scrutinized in 2007 and could generate search activity if some managers continue to underperform against performance policy standards. As well, sponsors are interested in reducing and simplifying the number of investment options, which could result in searches to implement new line up structures. It speculates there were be increased focus on target-year lifecycle funds.


Tuesday, June 26, 2007

Actuaries Have Plan To Save DB

The Canadian Institute of Actuaries has developed a 10-point plan to reverse the decline in Defined Benefit pension plans. “Healthy Defined Benefit pension plans are too important to Canadians, our economy, and our future to let them slowly die as a result of misperceptions and false economies,” says Normand Gendron, president of the institute. Actions proposed include passing legislation to allow employers to set up employer-funded Pension Security Trusts to hold payments required to fully fund plans. These trusts would allow employers to withdraw these funds when the pension plan assets reach a fully funded level. Both suggestions are designed to create some symmetry in pension funding.

Investors Pay Attention To ESG

Mainstream investors and corporations are giving increased attention to environmental, social, and corporate governance issues, says a Goldman Sachs report. The report says the increased recognition that ESG issues may have the capability to impact a company’s financial performance has led many investors to seek ways to incorporate the analysis of these issues as part of their regular investment process. SRI assets in the United States totaled $2.29 trillion in 2005, compared to $539 million in 1995.

BlackRock Acquires Fund Of Funds Business

BlackRock, Inc. will acquire the fund of funds business of the Quellos Group. The combined business will comprise one of the largest fund of funds platforms in the world, with more than $25.4 billion in assets under management. Products include hedge, private equity, and real asset fund of funds, as well as specialty and hybrid offerings. They are managed on behalf of institutional and individual investors worldwide.

AIMA Responds To IOSCO 

The Alternative Investment Management Association says the International Organization of Securities Commissions (IOSCO) ‘Consultation Report on the Principles for the Valuation of Hedge Fund Portfolios’ has accurately captured all key issues raised in AIMA’s ‘Guide to Sound Practices for Hedge Fund Valuation in March 2007.’ However, AIMA continues to have the view that, given the nature of the subject and the significant progress already made by the industry – and noting that ‘no one size fits all’ – regulation would neither be appropriate nor helpful.

Retaining Employees Top Benefits Objective

Retaining employees now outranks controlling costs as the top benefits objective for U.S. employers, says MetLife’s ‘Employee Benefits Benchmarking Report.’ The study found while white collar and blue collar workers both said that medical coverage was their most important benefit, white collar employees ranked vacation as the second most important benefit and blue collar workers named prescription drug coverage. Vacation was ranked number five in importance by blue collar workers. Blue collar workers are also about twice as interested in long-term care insurance than white collar employees.

Pension Plan Reversal Confirmed

Research from the Employee Benefit Research Institute (EBRI) confirms the role reversal of Defined Benefit and Defined Contribution plans as the primary retirement savings vehicle for U.S. employees since 1979. EBRI’s ‘Fast Facts’ shows 62 per cent of private sector workers were covered by a DB plan only in 1979, compared to only 10 per cent in 2005. Only 16 per cent of workers were covered by DC plans in 1979 versus 63 per cent in 2006. The number of active participants in DC plans has increased from 18.9 million in 1980 to 52.2 million in 2004, while the number of active DB plan participants dropped from 30.1 million to 20.6 million in the same time period. The data shows there were 341,000 DC plans in existence in 1980 and 148,000 DB plans. In 2004, the number of plans offered were 653,000 and 47,000, respectively.

International Equity Most Popular Product

International equity was the most popular product category for global investment manager searches, followed by U.S. equity, says Mercer Investment Consulting data on investment manager search activity for 2006. Among its clients, there were 143 international equity searches accounting for nearly $29 billion, or just over 31 per cent, of total assets placed. There were 76 U.S. equity searches with more than $4 billion in assets placed. There was significant growth in search activity in Asia where searches nearly doubled to 83 in 2006.  As well, there was continued growth in search activity for non-traditional asset classes.


Monday, June 25, 2007

BRIC Has Huge Potential

The economies of the BRIC countries will affect world markets for the next 10 to 15 years, says Stephane Levy, senior vice-president, head of quantitative business development, HSBC Investments (USA) Inc.  Speaking at an HSBC Investments Funds (Canada) Inc. luncheon, he said the BRIC countries (Brazil, Russia, India, and China) are on track to becoming economic giants. Currently, they have about 42 per cent of the world’s population, but produce only 10 per cent of its GDP. So it is easy to see something is going to happen here, said Levy, as there is a huge potential in these countries.

Caisse Acquires Interest

The Caisse de dépôt et placement du Québec has acquired a 25 per cent equity interest in Interconnector (UK) Limited, a United Kingdom gas transporter, which owns and operates a bi-directional pipeline linking the UK and Belgium. “This transaction perfectly meets the Caisse’s Private Equity Group’s investment criteria. First and foremost, this asset is of very high quality. Interconnector is the owner of a strategic natural gas transportation link between the United Kingdom and the rest of Europe. Moreover, the rates for this pipeline are fixed until 2018, which guarantees a stable and predictable income stream,” says Ghislain Gauthier, first vice-president, infrastructures and energy, from the private equity group at the Caisse.

Mercer Earns Award For Sustainable Investment

Mercer Investment Consulting has earned a GLOBE award for environmental excellence.  Presented by the GLOBE Foundation, these annual environmental awards recognize Canadian companies that have taken a proactive approach to environmental and sustainability challenges, while still maintaining strategic excellence in business practices. Mercer won the Capital Markets Award for Sustainable Investment & Banking. 

UK Employers Uncertain Of Healthcare Benefits

Just five per cent of employers calculate the return they get for their investment in healthcare benefits, says Employee Benefits H.S.A. Healthcare Research 2007. The research found that a further 22 per cent of UK employers do not know how much they spend on healthcare staff perks such as private medical insurance, health cash plans, employee assistance programs, health screening, income protection, and well-being initiatives. The low proportion of employers calculating return on investment for health benefits may be due to the fact that it can be difficult to calculate an accurate return on these products.

Companies Weigh Options For Retiree Medical Benefits

Many U.S. employers are looking at new ways to provide retiree medical benefits now that market and regulatory changes are firmly in place, says the 12th annual National Business Group on Health/Watson Wyatt survey on employer-sponsored health insurance. Although the Medicare Modernization Act was enacted in late 2003, it has taken years to fully implement the law and for the private market to respond with new medical and prescription drug coverage options for retirees. With such options now available, employers are moving beyond sponsoring plans that solely supplement Medicare benefits. Many are now offering account-based programs and Medicare-approved health plans run by third parties.


Friday, June 22, 2007

RPP Membership Unchanged

Membership in Canada’s 15,130 active registered pension plans (RPP) remained virtually unchanged in 2005, says Statistics Canada. As of January 1, 2006, active RPPs covered just under 5.7 million members, up only 0.4 per cent, or about 20,000, from the year before. This pace of growth was substantially slower than the annual rates recorded since the turn of the millennium. While the overall number of active members of RPPs remained relatively stable, the public sector added 37,000 members in 2005, reaching just under 2.7 million, up 1.4 per cent from the previous year. At the same time, private sector plans had just under three million members, a 0.5 per cent decline.

Healthcare Collaboration Needed

A collaboration of the public and private sector is needed to ensure the accessibility, affordability, and sustainability of healthcare in Canada, says David Garner, president and CEO of Green Shield Canada. Speaking at Blevins Insurance Group’s Client/Carrier Appreciation Day, he said spending on healthcare in 2005 was $142 billion, but it will reach $170.2 billion by 2020. However, he said the health of the population is determined by socio-economic and lifestyle factors, not what is spent on healthcare. Without change, there will be increased costs and utilization, without any noticeable improvement in the health of Canadians.

Desjardins Launches Retirement Payout Forecaster

Desjardins Financial Security has developed a crystal ball to help Canadians forecast the potential outlook of their retirement incomes with the assistance of their financial advisor. Its Retirement Zone Payout gives financial advisors a tool that clearly and visually demonstrates various scenarios that their respective clients can expect during their retirement. It allows the advisor to demonstrate how a product such as a life annuity, part of the asset decumulation portfolio, can help ensure that funds are available to pay every-day living expenses throughout retirement and mitigate, for instance, longevity or inflation risk. 

Claymore Adds Core Portfolio Series

Claymore Investments, Inc. has added a CorePortfolio series to its line-up of ETFs. The Claymore Global Balanced Income ETF and the Claymore Global Balanced Growth ETF are trading on the Toronto Stock Exchange. Each provides a diversified portfolio designed to track indices with specific investment goals in mind.

Health And Disease Management Programs Added

Major U.S. employers are growing increasingly sophisticated in using incentives to encourage employee participation in health and disease management programs. They also face the challenge of maintaining employee motivation while demonstrating that these programs make strict business sense, says a survey by The ERISA Industry Committee (ERIC), the National Association of Manufacturers (NAM), and IncentOne Inc. When broken down by type of program, companies with disease management programs are less likely to offer incentives for those programs than for other types of programs. This indicates that employers are targeting programs and incentives based on the needs of their employees rather than simply building generic programs.

Care For Elderly Takes Toll

Family caregivers are getting stressed out, says Home Instead Senior Care. More than three-quarters of the 8,000 family caregivers who took the company’s stress test reported that the needs of their aging loved ones are overwhelming. As well, 91 per cent of family caregivers who did the test said they have episodes of feeling anxious or irritable, 73 per cent have disturbed sleep patterns, and 56 per cent say they are irritable more frequently.
Its survey found that about one-quarter of adults presently care for an aging parent or relative, with 45 per cent of this group providing care for their spouse. In most cases, the family caregiver is a spouse, the eldest daughter, or the grown child who lives closest to the parent(s).


Thursday, June 21, 2007

SERPs Need Review

While the Canada Revenue Agency (CRA) has confirmed its position that a supplemental employee retirement plan (SERP) may be subject to the ‘salary deferral arrangement’ rules in Canada’s Income Tax Act if it provides ‘unreasonable’ superannuation or pension benefits, its view of what benefits are “unreasonable” is troubling, says an Osler, Hoskin & Harcourt LLP analysis. Although the CRA acknowledges that the question of reasonableness will be resolved by reference to the particular circumstances of each case, factors it considers for this purpose include the reasonableness of the benefits provided under the plan in comparison to the provisions of the registered plan that applies to the particular employees and the history of the employer in providing pension benefits. Osler recommends that employers review their SERPs.

Auto Enrollment Becoming Norm

Automatic enrollment may soon be the norm in 401(k) plans, says a survey by the Employee Benefit Research Institute and Mercer Human Resource Consulting. The survey found that 66 per cent of respondents have either already adopted auto enrollment or are currently considering adding the feature. In addition, 48 per cent have either already adopted auto deferral rate increases or are considering adding this feature.

Single-digit Increases Predicted

PricewaterhouseCoopers expects a return to single digit increases in healthcare costs in 2008 for U.S. employers. It says private insurers are anticipating an average increase in medical costs of 9.9 per cent for preferred provider organizations, health maintenance organizations, point of service plans, and exclusive provider organizations, and a 7.4 per cent hike for consumer-directed health plans. It attributes the deceleration of healthcare cost increases trends such as slower spending growth for prescription drugs, increased transparency and cost sharing with employees, and a total-health management approach to benefits such as wellness programs.


Wednesday, June 20, 2007

Fixing Pension Flaws Not Enough

The problems that have beset Defined Benefit pensions in recent years are symptoms of defects in the model itself that require tax and regulatory changes and new pension models, says a C.D. Howe Institute Commentary. ‘Ill-Defined Benefits: The Uncertain Present and Brighter Future of Employee Pensions in Canada’ says attempts to shore up classic, single-employer, DB pension plans are an inadequate response to Canada’s occupational pension problems. The DB sector’s immediate problems are the result of changes in the economic environment – in particular, a decline in long-term interest rates – that caused their balance sheets to deteriorate, and of changes in accounting standards to more market-based methods that revealed the underfunded state of these plans in stark form. The immediate policy challenge, they say, is to ensure the recovery and/or restructuring of sick plans, and the continued health of sound ones.

Confidence Index Rises

State Street Global Markets’ Investor Confidence Index rose 5.1 points to 97.2 in June. Since the long equity bull market began in March 2003, investor confidence has only been higher in 10 months. At first it seemed that investors in other asset classes were rattled by the bond markets. Equity markets were marked down in early June. However, since then normal service has been resumed and many markets around the world are testing record highs. The MSCI Emerging Market Index is at a new peak and the spread on emerging market bonds is almost back to where it was in May.


Tuesday, June 19, 2007

Institutional Money Tops 25 Per Cent

Direct investments by endowments, foundations, corporate pension funds, and public pensions together represent a quarter of the assets of the world's largest hedge funds, up from 22 per cent in 2006 and 20 per cent in 2005, says a Greenwich Associates study. The study also reveals that funds of funds have topped high net-worth individuals and family offices as a source of assets for these large hedge funds, with high net-worth individuals and family offices contributing 21 per cent of total assets.

Employee Benefits Evolving

Employee benefits programs are evolving, in some ways faster and more effectively than in others, says the Aon 2006 Benefit Trends Survey. The result of these changes is an increasing shift in responsibility, from employers to employees, for their benefits plans. In the traditional ‘one-size-fits-all’ extended health and dental plans, employers made most plan decisions. Today, employees have a much greater responsibility, not just for paying a greater share of their plan premiums, but also for determining how those funds are used and managed, deciding what benefit options they will receive, and choosing where they want their benefit dollars spent.

Conference Conquers Chaos

The Health Work & Wellness Conference 2007 will feature the theme ‘Conquering the Chaos.’ It will cover topics such as technology, work-life conflict, and mental health. It runs October 17 to 20 in Toronto, ON. For more information, visit

Robson Speaks At ACPM

William Robson, of the C.D. Howe Institute, and Étienne Brodeur, of Bombardier Inc., will headline the list of speakers at the 2007 ACPM National Conference. Theme of the event is ‘Charting the Future.’ It takes place September 10 to 13 in Charlottetown, PEI.  For more information, visit


Monday, June 18, 2007

CIA DB Prescription Revealed

Normand Gendron, president of the Canadian Institute of Actuaries, will outline its 10-point plan for putting Defined Benefit pension plans back on track June 25 in Toronto, ON. The Economic Club of Toronto luncheon will be the first presentation of ‘Defined Benefit Pension Plans – A 10 Point Prescription.’ It starts at 11:45 a.m. For more information, visit

Total Rewards A Best Practice

“Total rewards is not a radical, leading-edge concept, it’s a best practice” says John Cardella, chief people officer for Ceridian Canada. Speaking at the CPBI 2007 National Conference, he said it is not about one or two exceptional benefits, but rather a portfolio that attracts, motivates, and retains the type of employees an organization needs to thrive. As well, total rewards strategies must be driven by the business strategy, he said.

Mellon Merger Approved

The U.S. Federal Reserve has approved the merger of The Bank of New York Company,
Inc. and Mellon Financial Corporation. The companies also received Hart-Scott-Rodino anti-trust clearance for their proposed merger from the Department of Justice. The new company will be one of the leading asset management companies globally with assets under management exceeding $1 trillion and it will be among the world's leading securities servicers with more than $18 trillion in assets serviced by the firm.

Home Hardware Holds First Health And Wellness Fair

Home Hardware Stores Limited has held its first health and wellness fair to promote healthy living among its 1,200 current and retired staff members and their immediate families. ‘Health is Close to Home’ was held at the company’s distribution centre in St. Jacobs, ON, and featured more than 20 exhibitors. Exhibitors included the Heart and Stroke Foundation which provided insight on the effects of stress and the benefits of healthy eating and GoodLife Fitness which discussed the importance of incorporating exercise into everyday living.


Friday, June 15, 2007

Health Benefit Plans Encourage Employees To Stay

Against a backdrop of growing skills shortages, health benefit plans can become a strategic tool for Canadian employers to attract and retain top talent, says the 10th edition of The sanofi-aventis Healthcare Survey. Almost two-thirds of respondents aged 55 and older confirm they would be 'very' or 'somewhat likely' to continue working or return to the workforce after retirement if their employer would offer prescription drug or dental coverage that would continue into retirement. Further underscoring the importance employees place on these plans, 61 per cent say they would choose their health benefit plan over $20,000 cash.

Market Value Of Plans Tops $900 Billion

The market value of trusteed pension funds assets ended 2006 with a surge to $915 billion, says Statistics Canada. Fund assets, which had declined 2.1 per cent earlier in 2006, rebounded seven per cent in the final three months. Year-end fund values have increased steadily since bottoming out at $532 billion in the first quarter of 2003.

At the end of 2006, stocks and equity funds accounted for 41 per cent of pension fund assets, while bonds and bond funds represented 32.3 per cent, real estate 6.1 per cent, short-term investments 2.9 per cent, mortgages 1.4 per cent, and other assets 15.8 per cent. Domestic holdings accounted for 69.5 per cent of total fund assets. The share of investments in foreign holdings increased to 30.5 per cent from 25.6 per cent a year ago.

Members Would Use Retirement Planning Services

Fifty-nine percent of all participants in U.S. 401(k) and other Defined Contribution plans do not have financial planning services available to them, yet 85 per cent of this group would use general retirement planning services if available, says a Spectrem Perspective report. ‘Financial Planning at the Workplace’ says of those participants with no access to financial planning through their retirement plans, 81 per cent indicated they would be interested in investment planning/review if offered and 57 per cent said they would use education funding advisory services. 

Are Canadians Saving Enough?

Only one in three Canadians expecting to retire in 2030 are saving at levels required to meet basic household expenses in their retirement, and many may need to sharply increase their annual savings or continue working past age 65 to avoid financial hardship, says a study sponsored by the Canadian Institute of Actuaries. ‘Planning For Retirement: Are Canadians Saving Enough?’ found those households saving adequately are doing so using some combination of home equity, company-sponsored pension plans, registered retirement savings plans, and personal savings to supplement the modest base income they will get from Old Age Security and the Canada/Quebec Pension Plan.

Pension Plans Must Use Innovation

Pension plans must use innovation in seeking out alpha, says Janet Rabovsky, of Watson Wyatt Worldwide. Speaking on ‘Performance Measurement’ at the CPBI 2007 National Conference, she said they must also take swifter actions to exploit capacity-constrained products and improve their monitoring by looking at more than performance. She said money managers need to align interests through ownership, product focus, and size as well as deal with capacity early to anticipate skill decline.

Kerry Decision Examined

An Ontario region CPBI Breakfast Seminar will examine the implications of the Kerry Case for pension plan sponsors. The Ontario Court of Appeal has released its decision in Kerry (Canada) Inc. v. DCA Employees Pension Committee and this session will look at a number of significant issues that were clarified by this decision. It takes place July 10 in Toronto, ON. For more information, visit

LOMA Canada Presents Awards For Best Practices

Empire Life and Assumption Life were awarded LOMA Canada’s ‘2007 National Corporate Awards for Best Practices in Learning and Development.’ Empire Life received the award for its Corporate Orientation Program – a year-long program for new employees consisting of presentations, workshops, training programs, and follow-up sessions. Assumption Life received the award for its Introduction à Assomption Vie program – an e-Learning training module where new employees have the flexibility in choosing how, when, and where to complete the education portion of the program. The awards were presented at LOMA Canada’s annual conference.


Thursday, June 14, 2007

Potential In EAFE Markets

The activity of the Canadian dollar and rising interest rates are the two main reasons Douglas Porter is neutral on the domestic market. Speaking at the Morningstar ‘Going Global Investment Conference,’ Porter, deputy chief economist and managing director of BMO Capital Markets, said the dollar flies after commodity prices and he doesn't think there is a long-term demand for commodities. However, he sees lots of potential in the EAFE (Europe, Asia, and the Far East) markets and, within that, the Asian market, and, within that, Japan. “The yen is very undervalued,” he said. In addition, “over the next five years, we'll see other Asian countries benefit from the development of China.”

SRI Part Of Fiduciary Responsibility

Socially Responsible Investing (SRI) is one of the fastest growing segments of the investment markets, says Michael Jantzi of Jantzi Research Inc. Speaking at the Toronto CFA Society seminar, ‘New Developments in SRI,’ Jantzi said going forward, fiduciary responsibility will include evaluating risk based on what companies are doing to be socially responsible.

Inflation Worries Investors

Institutional investors have become increasingly worried about inflationary pressures and are bracing themselves for higher long-term and short-term interest rates, says Merrill Lynch’s ‘Survey of Fund Managers’ for June. It shows that 47 per cent of respondents now expect global core inflation to be higher one year from now. The majority of investors (51 per cent) expect long-term rates to rise more than short-term rates, resulting in a much steeper yield curve.

Lamoureux Leaves CCGG

Claude Lamoureux, one of the two founders of the Canadian Coalition for Good Governance (CCGG), has resigned from its board. Lamoureux is retiring as CEO of the Ontario Teachers Pension Plan during the next year and the CCGG requires its directors to be active shareholder representatives.

HR Focus Shifts

The human resource function around the world continues to change as it shifts its focus from enhancing internal operations to maximizing contribution to the corporation’s business performance, says the ‘2006 Global HR Transformation Study’ by Mercer Human Resource Consulting. It found half of organizations are in the midst of transforming their HR functions, while 12 per cent completed a transformation within the past year and another 10 per cent plan to begin the process within the next year. HR transformation is the process of recreating or reinventing the HR function with the specific intent of enhancing HR’s contribution to the business.

AGF Launches Balanced Growth Portfolio

AGF Funds Inc. has added a balanced growth portfolio to its line-up of Harmony portfolios. It is made up of 60 per cent equities and 40 per cent fixed income in a diversified mix of Canadian and foreign equities and fixed income.

Private Equity Focus Of Session

How private equity is creating a new business era will be the topic of an Economic Club of Toronto luncheon June 21 in Toronto, ON. Howard E. Johnson, president, Veracap Corporate Finance Ltd., and partner, Campbell Valuation Partners Ltd., will be the featured speaker. For more information, visit


Wednesday, June 13, 2007

Governance Provides Protection

Before the ‘perfect storm’ in the pension fund industry, plans paid little attention to governance. However, good governance practices provide protection against future ‘perfect storms,’ says Jasenka Brcic, a principle at Eckler Ltd. Speaking at its Insights and Innovations session, she said a good governance policy includes written descriptions of the purpose and objectives of pension governance, the governance structure, and the roles and responsibilities of the parties involved. Having a governance policy is not enough, however. It also needs to reviewed on an annual basis, she said.

Employers Consider Elimination Of Post-retirement Benefits

More than half of Canadian employers are considering eliminating post-retirement benefits for most retirees to contain the soaring costs of health benefits, says a survey by AON Consulting Inc. While 55 per cent are considering eliminating health benefits for retirees, another 22 per cent say they are considering reducing the employer contribution. More than 40 per cent of companies are also considering reducing life insurance coverage for retired executive and salaried employees.

Claymore Launches Global Mining ETF 

Claymore Investments, Inc. has launched the Claymore S&P/TSX Global Mining ETF. It seeks investment results that correspond generally to the performance of the S&P/TSX Global Mining Index. The index is currently comprised of 107 stocks.


Tuesday, June 12, 2007

Money Managers Most Trustworthy

Money managers were viewed as the most trustworthy of Canadian financial service professionals with an average rating of 3.56, while the perception of ethical behavior of private equity and hedge fund professionals earned the lowest rating, averaging a ‘below adequate’ ranking of 2.72 in the inaugural Financial Market Integrity Index. CFA Institute members were surveyed on the overall ethical behavior of financial service professionals and market frameworks in Canada. The overall rating for Canada was a strong 3.64 on a scale of 1 (poor) to 5 (excellent). Both corporate boards and corporate executives in Canada earned a rating above ‘adequate’ with ratings of 3.13 and 3.11, respectively. The index also tracked survey participant confidence in various market foundations such as regulatory protections, legal protections, corporate governance standards, and financial transparency. Among these, survey participants were the most confident in the transparency of the Canadian markets (average rating of 3.37) and the least confident in corporate governance (average rating of 3.18).

Fundamental Indexes Add Value

While fundamental indexes will underperform in periods of irrational price bubbles, in weaker return markets, they will add value, says Jason Hsu, principal director, research and investment management, Research Affiliates. Speaking at FTSE Americas’ ‘Fundamental Indexing’ session, he said with traditional indexes, as the price of a stock rises, they must buy more of the stock. Fundamental indexes delink market weights from stock prices and instead focus on the liquidity and capacity of companies. Som Seif, president of Claymore Investments, said the Exchange Traded Fund market is currently $600 billion and is expected to reach $2 trillion by 2010.

Onex Joins BCE Bid

Onex Corporation has joined the Canada Pension Plan Investment Board, Caisse de depot et placement du Quebec, and Kohlberg Kravis Roberts & Co. consortium formed to take BCE Inc. private. Onex is joining the consortium with the consent of BCE's Strategic Oversight Committee, a committee of independent directors established to oversee the company's evaluation of a range of strategic alternatives. Onex is Canada's oldest and largest private equity firm.

STRATA, Belton Form Alliance 

STRATA Benefits Consulting and Belton Financial Services Ltd. have formed a strategic alliance. Through this alliance, STRATA will provide back-end support to clients of Belton. STRATA is a Winnipeg-based consulting firm that specializes in strategic employee benefits consulting for companies of all sizes and special benefit packages for associations. Belton serves the risk management and investment planning needs of individuals and businesses across Canada and internationally.

Pension Plans Unreviewed

As many as 12 million people in the UK have never reviewed their pension plans with a further 1.5 million failing to look at them in the last five years, says Baring Asset Management. Of the 52 per cent of people surveyed who had looked over their pension plans, one in five had simply opted for the default investment option while one in four could not remember if they had or not. More than half were aware of the asset allocation of the default option, a further third were unclear, and 13 per cent said they could not remember the details of where their pension fund was being invested. Only half of people who had revised their pension plans had been advised on the appropriate asset allocation for their age and lifestyle with more than a third claiming to not know the details of where their pension fund is being invested.


Monday, June 11, 2007

Instinet To Launch TSX Rival

Instinet LLC plans to launch an exchange to compete with the Toronto Stock Exchange (TSX) by the end of this year. Its ICX market has received all necessary regulatory approvals and is aiming for a fourth quarter launch. By this time next year, the TSX could be facing competition from four systems offering traders alternatives to the TSX. In addition to Instinet, Investment Technology Group Inc.’s TriAct Canada is starting up next month and Pure Trading is in the final stages of preparing to launch its exchange. Next year, a venture of the big six banks and Canaccord Capital Inc., Alpha, is slated to go into operation.

CPBI Delegates Gather

More than 450 delegates are expected to gather in Winnipeg, MB, this week for the CPBI 2007 National Conference. Themed the ‘Winds of Change,’ it offers continuing education, networking, and information sharing. The conference kicks off June 13 and features a keynote address by Peter Mansbridge, chief correspondent, CBC News. Forum topics include ‘Has Retirement Outlived its Usefulness,’ ‘Pandemic Preparedness: Are We Prepared?’ and ‘Fraud in the Canadian Healthcare Industry: Everybody’s Business.’ It runs to June 15. For more information, visit


Friday, June 8, 2007

RAMQ Issues Interpretations

Quebec employers will be required to terminate drug coverage for certain dependents, such as children aged 18 or over who are not students, says new series of ‘Info assurance médicaments’ bulletins from The Régie de l’assurance maladie du Québec (RAMQ). The new interpretations reflect the position adopted by RAMQ in recent months pertaining to the scope of the definitions of spouse and child for the purposes of private health plans, says a Mercer Communiqué. According to RAMQ, the definitions used must strictly reflect those in the act and cannot be broader. Individuals who lose their coverage under an employer-sponsored plan must enrol in the public drug plan and pay the required premium, unless they have access to a private health plan in their own right. This loss of coverage could result in legal disputes, especially if the insurer or the administrator of the employee benefits plan chooses to standardize the definitions for other coverage under the health insurance plan included in the same contract, or even for other coverage, such as dental care, under the group insurance plan.

Managers Want Clearer Soft Dollar Guidelines

U.S. asset managers and pension plan sponsors want the SEC to provide clearer guidelines on the level of disclosure required for the use of soft dollars for equity research, says a survey by Greenwich Associates and Capital Institutional Services. More than 60 per cent of investment managers and more than two-thirds of plan sponsors favor regulatory intervention to clarify items that must be disclosed regarding brokerage commissions that cover trading and research.

Signs Point Upward

Strong equity markets and an increase in long bond yields created a powerful one-two punch, pushing U.S. pension funded levels up dramatically in May, says Towers Perrin’sCapital Market Update. The funding level for its benchmark plan was a 2.9 percentage point improvement, to 94.7 per cent, a level last seen in May 2002. Large cap stocks returned 3.5 per cent for the month, and have posted a strong 8.8 per cent return for the year. Long bond yields moved up significantly in May. The Merrill Lynch 10+ High Quality index yield increased by 18 basis points to 6.12 per cent, and the 30-year Treasury bond yield climbed 20 basis points to 5.01 per cent.


Thursday, June 7, 2007

Kerry Decision Overturned

The Ontario Court of Appeal has overturned the Divisional Court decision in Nolan v. Superintendent of Financial Services (otherwise known as Kerry). The Court of Appeal essentially restores the earlier, more employer-friendly decision of the Financial Services Tribunal in respect of pension plan expenses, says an Osler Update. It means pension plan administration expenses are payable from the plan fund and, depending on how a plan is structured, it is permissible to use surplus from the Defined Benefit component of the plan to fund contributions in respect of the Defined Contribution component of the same plan. To see the decision, visit

Lifting Constraints Improves Returns

The more decisions a manager is allowed to make, the better the possible returns, says Martin Gerber, head of Connor, Clark & Lunn Investment Management’s quantitative equities team. Speaking at its ‘The Long & Short of 120/20’ session, he outlined the benefits of relaxing ‘long only’ portfolio constraints and explained its new 120/20 and 130/30 strategies. He said research since 1989 has shown that constraints limit the breadth of decisions managers can make, thereby limiting their returns. He said with the new strategies, the efficiency of portfolios improves with short positions up to 20 per cent. After that, the leverage improves creating new possibilities for increased returns.

Canadians Lag In LDI Implementation

While Liability Driven Investing (LDI) has received a lot of attention, only 21 per cent of Canadian pension plans polled are currently implementing LDI strategies and only an additional seven per cent said they will be this year, says an SEI Global Quick Poll. Andrew Kitchen, managing director, strategies and solutions, says "In Canada, the level of investment expertise and resources required for LDI implementation is daunting, particularly when combined with a high level of plan design changes and the new funding and accounting rules. In order to realize the desired benefits of LDI, organizations will need to consider changes to overall plan management to enable the execution of these strategies.”

Politicians Avoiding Reform

While pension regulations and guidelines in Ontario have not been changed in 20 years and are badly in need of reform, David Vincent says it is “clear to me that politicians don’t want to touch this area.” Speaking at Ogilvy Renault’s ‘Second Annual Employment Law Conference,’ he said that if politicians “can afford it, they want to procrastinate.” He said pension policy is a politically charged issue in this country and political inaction means the courts are being asked to fill the void which is “not necessarily a good development.”


Wednesday, June 6, 2007

FKI Now Financial Education Institute

To further enhance its national identity, Financial Knowledge Inc. has become the Financial Education Institute of Canada. FKI was founded in 1984 as a storehouse for books Graydon Watters was writing. Today, it takes a holistic approach to encourage individuals to realize their financial future is in their hands. It partners with businesses across the country to provide employees with tools to plan for their retirement.

SRI Shows Up In DC Plans

More and more Americans are getting a socially responsible investment (SRI) option in their Defined Contribution plans at work, says Mercer Investing Consulting data. In a survey commissioned by the Social Investment Forum, 19 per cent of DC plans already include an SRI option and 41 per cent of DC plan sponsors who are not currently offering SRI options to investors expect to be doing so within three years. This would translate to 60 per cent market penetration for SRI options in DC retirement plans by 2010.

Great-West Establishes Mental Health In The Workplace Centre

Great-West Life’s group insurance division has established the Great-West Life Centre for Mental Health in the Workplace. Through the centre, its group insurance division will focus on research and projects to create greater employer awareness and understanding of the issue of mental health and productivity in the workplace. As well, the centre will develop and promote programs that employers can use to better help employees who are experiencing a mental health issue.

Teachers Raise Stake

The Ontario Teachers' Pension Plan Board has raised its stake in BCE Inc. to 6.3 per cent, says a regulatory filing with the Securities and Exchange Commission. May 23, BCE confirmed it is in talks to be sold to Cerberus Capital Management LP and a group of Canadian investors. Teachers, which is BCE's largest shareholder, has also been mentioned in news reports as eyeing a possible bid. Teachers now reports beneficial ownership of 50.8 million shares, up from the 42.8 million shares it reported April 9.

State Street Enhances Real Estate Servicing

State Street Corporation has enhanced its real estate servicing capabilities by providing customers with a full suite of online performance analytics and risk assessment tools to better monitor their entire real estate investment portfolios. In partnership with Resolve Technology, it has developed an online solution to allow customers to access needed data within an automated environment, eliminating extensive manual reconciliation processes typically required in the real estate industry.

More Funds Turn To LDI

While only 20 per cent of pension funds use a liability driven investing (LDI) approach in managing their funds, that percentage will likely increase this year, says a study from SEI’s Pension Management Research Panel. Another 12 per cent of funds will use an LDI approach by the end of this year, and another 35 per cent will consider using an LDI strategy in 2008 or later. A third of respondents are not considering LDI.

GIPS Compliance Tough

Getting into Global Investment Performance Standards (GIPS) compliance may not be easy, but staying in compliance is tougher, says J. Michael Lowry, of Investors Choice. Speaking at the ICAC’s ‘GIPs 101 Seminar,’ he said constant vigilance is needed to stay in compliance. Money managers must keep up with changes in accounts, deal with one-off situations and gray areas, fine-tune the process, and keep up with the standards. The benefits of being in compliance include a more robust back office process and peace of mind for the firm.


Tuesday, June 5, 2007

Claymore Launches Global Water ETF

Claymore Investments, Inc. has launched the Claymore S&P Global Water ETF on the Toronto Stock Exchange. The ETF is comprised of a group of companies distributed equally among water utilities and infrastructure and water equipment and materials. It seeks investment results that correspond generally to the performance of the S&P Global Water Index.

TD Updates Environmental Strategy

TD Bank Financial Group has updated its environmental strategy and published an Environmental Management Framework on its corporate Web site. The framework outlines how TD will manage and minimize the impact of environmental risks and issues arising from its business operations and is organized around Forest Biodiversity, Climate Change, Aboriginal Peoples, and TD’s Operational Footprint.

Benefits Help Retain Employees

Employee retention as the most important reason for offering benefits, says MetLife's annual Employee Benefits Benchmarking Report. U.S. retail and small employers in particular consider employee benefits as the most important retention strategy. Work/life balance ranked among their top benefits strategies.

Monthly Update of Pension Plan 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 July 2007 are now available at

An Excel spreadsheet on the website contains six worksheets

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


Monday, June 4, 2007

Canada Catching Up

While technology is growing at a rapid pace and resulting in a massive increase in trading volumes and data, Canada has been a laggard in adopting some technologies, says Nick Thadaney, CEO of ITG Canada. Speaking at the FPL Electronic Trading Conference 2007, he said, however, the country is catching up by skipping over some technologies. This is important because technology has made some segments irrelevant and it has “blown apart” the “old closed club of the world.”

Under-funded Pension Plans Changes Proposed

Recently introduced amendments to the New Brunswick Pension Benefits Act (PBA) will impose new funding requirements on Defined Benefit pension plan sponsors on a full or partial wind-up, says a McInnes Cooper Pension Law Alert. Bill 66 would make New Brunswick the first Atlantic Canadian pension jurisdiction to require certain employers to make up any funding deficits that exist at the time of a full or partial pension plan wind-up. Under the current New Brunswick PBA, an employer who fully or partially winds up a pension plan is only obligated to make payments to the plan that were due as of the date of wind-up, in accordance with the PBA, the PBA regulations, and the plan’s provisions. Under Bill 66, if a pension plan is wound-up in full or in part, and the plan assets are less than the plan’s solvency liabilities as of the wind-up date, an employer who is not insolvent will now be required to make up the full amount of the deficiency. 

Settlement Technology Focus Of NI 24-101 Seminar

Achieving same-day trade matching of institutional orders is viewed by many in the Canadian securities industry as an opportunity to create best practices for market efficiency. In fact, post-trade processing was the number one issue of more than a dozen leading investment firms who attended Charles River Development’s Canadian Client Seminar. With Canada’s National Instrument 24-101 (NI 24-101) rule requiring initial policies and procedures for institutional post-trade matching and settlement now in effect, technology will play a critical role in facilitating straight-through processing by automating the entire trading process and connecting all those involved in executing or clearing trades.

Toronto Firm Expands Nationally

HealthSource Plus has merged with Winnipeg-based PeopleFirst HR Services Ltd. to form a new company, People Corporation. People Corporation now serves more than 500 Canadian companies. "Our experience in working with hundreds of businesses across Canada is clear – human resource management is among the top three issues facing CEOs in virtually every business sector," says Laurie Goldberg, president and CEO of the newly-formed corporation. People First HR and HealthSource Plus will continue to operate under their respective brand names for the immediate future while the new firm serves as a platform for the growth and integration of services. 


Friday, June 1, 2007

Marine Atlantic Decision Appealed

Notices of appeal have been filed in the Marine Atlantic case, says the Toronto Labour Group of Heenan Blaikie. This case concerns whether the federal Pension Benefits Standards Act (PBSA) requires a pro-rata distribution of surplus assets on the partial termination of a Defined Benefit pension plan. The Federal Court Trial Division held that section 29(12) of the PBSA requires proportional distribution of the surplus attributable to the wound up part of a pension plan. 

Benecaid Launches Drug And Dental Card

Benecaid Health Benefit Solutions Inc. and ESI Canada have launched a Benecaid branded drug and dental card. The new relationship will see existing and future clients of Benecaid’s FlexStyle solution moved over to the new card over the coming year. 

Finance Backs CRA Position On SPPs

Supplementary pension plans (SPPs) benefits will be considered reasonable by the Canada Revenue Agency if the terms are substantially the same as those found in registered pension plans (RPPs), but for the RPP limits, says the Pension, Benefits & Executive Compensation Group at Cassels Brock. In determining the reasonableness of SPP benefits, the CRA looks at factors such as the history of the employer in providing pensions to employees and the comparability of other pension arrangements. It will not likely grant advance tax rulings for any SPP that departs materially from the rules set out for RPPs. In practice, this means that Defined Benefit accrual rates greater than two per cent and grants of credited service not based on actual employment will likely be considered unacceptable.

Sun Life Completes Acquisition Of Employee Benefits Group

Sun Life Financial Inc. has completed its acquisition of Genworth Financial, Inc.'s U.S. Employee Benefits Group following approval by all required regulatory authorities in the United States and the Office of the Superintendent of Financial Institutions in Canada. Its U.S. group business, combined with Genworth's Employee Benefits Group, becomes Sun Life Financial Employee Benefits Group, offering customers group life, disability, dental, and stop-loss insurance. 

Ceridian Enters Into Merger Agreement

Ceridian Corporation, Thomas H. Lee Partners, L.P., and Fidelity National Financial, Inc. have entered into a definitive merger agreement under which Ceridian will be jointly acquired by Thomas H. Lee and Fidelity National. Ceridian is a provider of human resources, transportation, and retail information management services, serving businesses and employees in the U.S., Canada, and Europe. 

Socially Responsible Investing Discussed

‘New Developments in Socially Responsible Investing’ will be the topic of a Toronto CFA Society luncheon June 13 in Toronto. Murray Gold, of Koskie Minsky, and Michael Jantzi, of Jantzi Research, will be the speakers. For more information, visit

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