Exclusive Online Articles
Rates Rising? Inflation? … A Case For Dividend Growth
After the longest bull run for bonds in history, does the election of Donald Trump as president of the U.S. signal looming inflation and an inflection point for markets?
Do-It-Yourself Ethical Investing Pays!
Many investors could increase profits and assemble a portfolio more in accord with their personal values if they actively managed their own investments.
Aging Is A Major Issue
Many of you have heard me talk using my population pyramids and you have heard various chairs and panelists saying oh no, he’s going to babble about it again.
What’s Your Equity Duration?
"Interest rates have nowhere to go but up!" We have probably all become tired of hearing this comment over the past few years. While the Fed could increase rates later this year, interest rates across the curve could still stay low for a while longer.
It’s About Time
If people put money away for long-term goals rather than near-term expenses, why are their investment decisions so short-sighted?
Ransomware Poses Cyber Threat To Business
Why is ransomware so potentially dangerous? Well, if you are an entrepreneur running a business – public or private – or if you are in charge of a department at a large organization, you could be vulnerable to an attack. Likewise, if you have financial assets that are largely controlled by technology – and who doesn’t? – you could also be victimized. And the consequences can be huge.
Finding the Optimal Pension Plan for Canadians: A Mix of DB and DC Pension Elements
Defined benefit pension plans are under pressure, especially in the private sector. In some instances, benefits are being reduced. In other cases, DB plans are being replaced by Defined contribution or individual account (eg., RRSP) plans. It would appear that traditional sponsors of DB plans have concluded that they are just not worth it.
Preparing for the Unexpected: Protecting Employees When Layoffs Are Unavoidable
The economy has been limping through its recovery, with the number of unemployed down, but the number of underemployed holding steady. We’re facing potential economic turmoil in light of the recent events in Britain and the EU, as well as massive cuts in the technology, and oil and gas sectors.
Currency Exposure: Diversifier Or Unrewarded Risk?
Currency movements have the potential to impact significantly the return and risk profiles of globally-invested portfolios, especially in an environment of renewed talk of currency wars. In parallel, fears over the state of affairs in China and other developing economies have led to a flight of capital into perceived ‘safe haven’ currencies such as the U.S. dollar or the Japanese yen.
ESG Ratings: Four Myths And A Truth
Recent criticisms of ESG ratings reflect an outdated and inaccurate notion of the ingredients and value of an ESG rating.
Breaking Up Is Hard To Do: Brexit Update
A year ago, it seemed likely that debt-ridden Greece would be the first country to exit the 28-country European Union (EU). However, that distinction now looks likely to go to the United Kingdom. In the British leave/remain referendum held on June 23rd, voters decided that Britain should leave the EU, marking the beginning of what is being referred to as ‘Brexit.’
Wage Against The machine
Something has the rate of wage growth in a vice grip and labour slack alone can't shoulder the blame.
VRSP And ORPP: The Answer To The Retirement Savings Gap?
Both the Quebec and Ontario governments have a shared concern with the inadequate retirement savings of their respective residents. This lack of savings eventually leads to an inadequate retirement income relative to each individual’s annual earnings.
No Lack Of Long-Term Value In Emerging Markets
The New Year hasn’t brought much relief for long-suffering emerging market investors. However, there are attractive opportunities to be found for investors who are able to look past the short-term macro noise.
There Is No Free (Liquid) Lunch
The topic du jour in the corporate bond world is liquidity, or, more specifically, the lack thereof. Despite significant growth in the size of the market, it has become increasingly more difficult to buy and sell corporate bonds without moving prices.
Cybersecurity Risk Management From An Asset Manager’s Perspective
Cybersecurity has become one of the most important areas of focus in compliance and risk management and is gaining momentum at a tremendous speed.
The Growing Networking Opportunity
It has been a volatile year for the global financial markets. Despite all the market noise, however, there remain diverse investment opportunities in global equities.
Fast Train Of Innovation Passing Managers By
Blindsided by innovation? Don’t become a statistic.
Three Investment Lessons From 2015
Every year our team devotes a couple of our regular Wednesday morning meetings for reflection on the year that has passed. This is a chance for our team to review the insights, errors, and observations that were made in the preceding 12 months and learn from each other. We thought we’d share three of these lessons.
A Tactical Opportunity: Sell High, Buy Low
This year I’d like to discuss a tactical opportunity, a market disparity that exists because of an artificial low in the gold price, and an unsustainable high in financial assets. Everybody understands buy low and sell high. The opportunity for 2016 is to sell high, buy low.
A Look at Currency Exposure for Canadian Pension Plans
It has already been over a decade since changes in foreign investment regulations have allowed Canadian pension plans to increase their proportion of assets in global investments. This increase in foreign asset exposure has led to greater exchange rate risk for international investors, resulting in a wider discrepancy between assets and liabilities for Canadian pension plans that pay benefits in Canadian dollars.
Overview Of Key Legal Actions In 2015
The pensions and benefits industry went without any landmark legal decisions in 2015. However, there was still plenty of interesting cases?
Pensions in Peril?
While much ink is being spilled debating the impact of interest rate moves or the existence of a liquidity crisis, what is evident to investors is that an illiquid bond market benefits no one in the longer term. There is little that can be done other than grit your teeth and watch anxiously as rate announcements are made and the markets bump along. Or is there?
Pensions Defined Benefit Plans: Death Or Rebirth?
The past two decades have seen a dramatic decline in the number of defined benefit pension plans offered by large employers in the private sector. A variety of factors explain this decline.
The Bulls Strike Back
Not so long ago, in a galaxy not far, far away, equity markets shed more than 10 per cent of their value. It was a period of great terror and despair. Investors lived in fear of a slowing global economy and the Empire unleashing their much dreaded weapon, the Fed rate hike.
Recent ESG Happenings Revealing
This review is about environmental, social, and governance, or ESG. The topic, which has evolved from what was formerly called Social Responsible Investing or SRI, has long been an important pension investment topic and the subject of much investment research and publication.
New Brunswick Shared Risk Plan: There’s More To The Story
The relatively new New Brunswick shared risk plan (NB SRP) model has received a lot of attention and positive publicity over the past year, not only in NB and the rest of Canada, but also around the world. However, amidst these accolades, there are a number of significant shortcomings that have thus far not been particularly well-identified, understood, or communicated.
Benefits Fraud – An ‘Intelligent’ Response
Benefits fraud is big business. The private sector spends about $60 billion annually on healthcare in Canada and it’s estimated that fraud represents anywhere from two per cent to 10 per cent of that total. Translated to dollars,1 this is between $1.2 billion and $6 billion with much of this cost borne by Canadian employers who sponsor benefits plans.
Five Trends To Watch In The CAP Landscape
We can expect to see continued progression and innovation in the capital accumulation plan (CAP) landscape. As focus escalates on Canadians’ future retirement prospects and the roles our governments, employers, solutions providers, investment managers, advisors, and we ourselves play in determining our outcomes, here are five key trends to watch.
Benefits And Pensions Monitor Interview: Making The Case For Emerging Markets Debt
Emerging market debt is attracting more interest these days, especially for pension fund sponsors looking for other sources of fixed income exposure. Nicolas Jaquier, emerging markets economist at Standard Life Investments, spoke with us about some of the elements of using this asset class.
Pension Funds Taking Active Approach
Pension funds are taking on a much more active, hands-on approach to managing their assets, says Rob Baillie, senior vice-president and head of State Street Canada.
Federal Budget 2015 At A Glance - By: Simon Laxon
The April 21, 2015, federal budget (Budget) has measures of interest to employers and to pension and benefit plan sponsors and administrators.
Pensions, Benefits Trends 2015 - By: Nienke Hinton
As we progress into 2015, Benefits and Pensions Monitor spoke with industry leaders and asked them what plan sponsors are talking about. This is what they said.
Book Review -
'Brandes On Value: The Independent Investor'
Charles Brandes founded the Brandes Institute and has contributed to our industry in many ways. His book presents valuable long-term insights into the field of value investing.
Making The Ontario Retirement Pension Plan Work For Janet And John: What Will It Take - By: Keith Ambachtsheer
Fixing the specific ORPP problems identified in this paper could offer the targeted group of middle income, private sector workers the best hope of achieving the post-work financial security they aspire to.
Making The ORPP Work - By: Joe Nunes
Joe Nunes was recently asked to consider the advice that he would give the province to make the ORPP work. He sees two clear priorities on which we need to focus to make the program a success.
Win-win: Pension Funds Seek A New Relationship With Their Asset Managers - By: Rob Baillie
Asset managers have always had to meet the highest standards when servicing their institutional investors. But a new State Street survey reveals that the relationship between pension funds and their asset managers is rapidly evolving.
Pension Reform Needs Consideration With ORPP
While the Ontario government is to be lauded for finally taking concrete steps to address significant issues concerning retirement income adequacy in this province, this latest initiative cannot be looked at in isolation, says Mark Newton, of Newton HR Law.
A World Without OPEC - By: Kara Lilly
After decades at the helm of global oil markets, OPEC appears to be relinquishing its status as designated ‘swing producer.’ This is a big deal if it occurs as it would mean the OPEC we used to know is dead. It would also likely mean greater volatility in oil markets and geopolitical change.
Exclusive Interview: Finding Global Real Estate Opportunities
Real estate has been a profitable venture for investors since the start of the millennium. Now, however, the best opportunities can be found outside of domestic markets. Darren Spencer, Russell Investments’ director of alternative investments, looks at how real estate can be used to help meet investment goals in an interview with Benefits and Pensions Monitor
Health Impacts Timing Of Retirement
Sun Life’s ‘2014 Canadian Health Index’ shows that seven of 10 Canadian employees are unable to retire when they plan to with the number one reason being health or medical reasons.
Re-engineering Risk - By: Jane Mancini
Risk and volatility are the new normal for today’s investment managers. In a fast-paced and highly changeable environment, a strategic yet adaptable approach to risk management has become one of the defining characteristics of leading asset managers.
Managing Pension Risk In A Volatile World - By: Robert Laughton
You don’t have to go back too far in time to see when and how the pension industry changed. Just 15 years ago, pension plan management seemed an easier endeavour: high yields on fixed income and double-digit returns in equity markets were the norm and seemed likely to continue for some time.
Sun Life Launches Customized Retirement Campaign - By: Nienke Hinton
Sun Life Financial has launched its ‘Money for Life’ campaign targeting individual Canadians to help them shape their own retirement. The program, in its fourth year, intends to debunk traditional retirement myths and help Canadians decide and plan for their own personal life goals.
The Lorax Speaks to Pension Fund Administrators – And They Better Listen! - By: Randy Bauslaugh
A proposed change to pension fund investment regulations in Ontario will require pension fund administrators to include in their statements of investment policies and procedures, information about whether and, if so, how, environmental, social, and governance factors will be incorporated into their investment decision-making process.
Vacations Boost Job Satisfaction And Workplace Concentration - By: Sean Shannon
Despite the proven correlation between vacations and overall health, a recent study by Expedia.ca, Canada’s leading online travel provider, has found that an increasing number of Canadians are feeling vacation deprived and are taking less vacation time than ever before.
SRI Has Evolved - By: Deb Abbey
SRI has evolved from traditional SRI, which focused on screening, to responsible investing which is very clearly defined by the global financial community as “the integration of environmental, social, and governance (ESG) issues into the selection and management of investments.”
The Risks Of Legacy Systems: Making The Case For Pension Fund Modernization
- By: David Kubersky
Legacy products and systems end up costing more in IT expenditures in the long run. It’s a proven fact. This is true for not only the investment management industry, but across multiple sectors as well. If looking for a reason to modernize, pension fund managers need to look no further than the airline industry.
The Atlantic Health Care Coalition Society Six Years Later - By: Fern Tardif
The ACHCCS was officially incorporated in July 2008. It has grown from four union locals to 62 groups comprised of over 800 union locals representing 200,000 members. There are more than 500,000 people who are entitled to participate in the various coalition programs negotiated with benefit providers.
The Rise Of Smart Beta
Rolf Agather, managing director, research and innovation indexes, Russell Investments, discusses the increased use of ‘smart beta’ to achieve investment goals with Benefits and Pensions Monitor.
SRI – A Noble Idea, But ... - By: Gerry Wahl
Socially responsible investing is an investment approach which takes into account returns and seeks out activities which do no ‘social harm.’ Deciding what constitutes ‘social harm’ is a challenge in itself. The more general the definition of social harm, the greater the investment excluded.
Secrets to Effective Pension Communication -
By: Frank Wiginton
Engaging employees with the pension plan and benefits is a persistent challenge. Many companies keep trying different mediums and methods to communicate the information and see meager results. However, maybe the issue isn’t how we are communicating, but what we are communicating.
Aging Warning Getting Out - Holmesetorial - By: Fred Holmes
The ‘Globe and Mail's’ Jeffery Simpson spoke recently to a lunch gathering in Collingwood, ON, sponsored by the Collingwood General & Marine Hospital Foundation.
The Challenge And Promise Of Workplace Pension Reform - By: Shelley Engman
We have seen the headlines, followed the political debates, and maybe even worried to ourselves about our own financial futures. Clearly, a renewed conversation about Canadians' retirement has begun in this country.
Setting Up Protection From HFT Predation - By: Kelly Reynolds
While the majority of high frequency trader activity in the market is deemed as positive by many participants, there are strategies that exist which are believed to be ‘predatory’ in nature.
Common Biases Of Goalkeepers And Portfolio Managers - By: Mariana Araujo
Simply put, not taking action may be the best course of action.
Do You Know Trusts? - By: Lorraine Allard
Most employers who sponsor retirement plans and tax deferral arrangements will know that plan assets are often held in trust, and that a trust agreement governs the administration of the trust, but how many of those employers really understand these trusts and the terms of the governing trust agreements?
Differentiating Pension Issues:
TBPs vs CPP - By: Louise Greig & Jana Steele
Much of the media coverage after the federal government’s announcement to commence a consultation process on target benefit plans focused on the Canada Pension Plan. However, the CPP enhancement debate is a different issue from the introduction of rules regarding TBPs.
Supplemental Pensions And Key Employee Retention - By: Allan Mosher
Most business owners will agree that the most important company asset is key employees. How then to keep key employees/executives motivated and with the company to retirement?
Retirement Plan Fees and Expenses - By: Randy Bauslaugh
Separating oversight from operational responsibilities is a hallmark of good governance; but oversight committees can't ignore the devil in the detail, especially when it comes to fees and expenses.
Generic and Brand-Name Prescription Drugs: What’s the Difference? - By Jim Keon
Even though generic drugs are dispensed to fill two-thirds of all prescriptions in Canada, many people still do not understand the difference between brand-name and generic drugs.
Roadmap To Absolute Returns - Part 2: ‘Behave Yourself And Mind The Gap!!’ - By: Rene Levesque
An adequate evaluation of the manager’s behavioural biases is paramount to the effective identification of absolute return strategies within the hedge fund universe. As well, a comprehensive inventory of the strategy’s embedded explicit and implicit volatility (vega) and gap-risk (gamma) postures are also important in the assessment of a manager’s propensity to generate absolute returns.
Budget Focuses More On Public Sector - By: Simon Laxon
The federal budget, presented on February 11, 2014, contained only a few items of interest to the benefits and pensions industry.
Why National And Multi-Jurisdictional Pension Plans Are An Endangered Species - By: Phil Rivard
The cost of saving for retirement has grown beyond most plan sponsors’ budgetary constraints, increasing calls for some type of expanded public system to fill in the gaps. We now have a myriad of jurisdiction-specific plan types and funding models, each well-intentioned approach developed to address a specific need at the expense of national harmonization.
Multi-generational Workforce Complicates Corporate Incentive Programs - By: Dave Eason
The wants and needs of Canada’s workforce are rapidly changing as Millennials enter the workplace in droves. Despite the growing and evolving use of corporate incentive programs in Canada, today’s multi-generational workforce is creating new challenges for Canadian organizations looking to motivate employees through their own incentives and awards.
Look Outside Canada For Equity Opportunities - By: Sadiq S. Adatia
Now that the world’s economic engines appear to be in gear, with only the occasional sputter, equity markets are in a good position to continue their winning ways through 2014. And by far the best place to reap these rewards is outside Canada.
Exclusive Interview - Quebec Moves Forward With PRPPs
With Quebec again introducing legislation to establish a mandatory pooled registered pension plan system, Joe Hornyak, executive editor of Benefits and Pensions Monitor, discussed this latest development with Robert Tellier, regional vice-president at Manulife Financial, its voluntary retirement savings plan spokesperson.
Transition Management Today
Dexton Blackstock, director, head of institutional business development, Russell Investments Canada, and Travis Bagley, director, Transition Management, at Russell Investments Americas, talk about the current state of transition management with Joe Hornyak, executive editor of Benefits and Pensions Monitor.
Association of Canadian Pension Management’s Annual Conference - Funding Rules Encourage Riskier Behaviour
How current funding rules encourage riskier behaviour by pension plans, the impact of age on pension plans, and the importance of maintaining discipline were among the sessions at this year’s Association of Canadian Pension Management Annual Conference.
2013 CPBI Atlantic Conference - Communication Critical When Changing Plans
Employers making changes to their benefit programs need to develop a strategic plan for communicating with employees.
Viewpoint: Healthy Links 2013 - By: Denise Balch
Thinking about farming and the promise of growth led me to consider why and how we go about doing business in our industry. How can we help our clients grow and be successful?
Sauriol To Row Atlantic
To celebrate his 60th birthday, 1988 Hawaii Ironman and 2008 Yukon River Quest finisher Jean-Guy Sauriol plans to row the Atlantic Ocean from the Canary Islands to the Caribbean.
Companies Want Out Of Pension Business
Anthony Gould is managing director of J.P. Morgan Asset Management. He was in Toronto recently and took some time to meet with Joe Hornyak, executive editor of Benefits and Pensions Monitor to discuss liability driven investment (LDI) in 2013,
Conference Report: CPBI Forum 2013
The inaugural inductees into the CPBI Hall of Fame, dealing with the rising cost of healthcare, leakage in investment returns, and the advantages of investing in stocks were among the highlights as the Canadian Pension & Benefits Institute (CPBI) took its annual Forum south of the border to Chicago, IL.
Saskatchewan's Recipe For Success
Themed 'Seasoned & Sound,' the 2013 Saskatchewan CPBI regional conference saw a number of presenters from the pensions and benefits field offering their 'recipes' for everything from effective communications to an alternative pension retirement system for Canadians.
Gold Outlook 2013 And Beyond: Three Key Concepts That Affect Retirement Income And Wealth Preservation - By: Nick Barisheff
The world that retirees and pensioners face today is quite different from the world in which they attended school, raised a family, and prepared for their golden years. One's financial security, no matter how well planned, is no longer certain.
Living To 100: Can You Afford It - By: Bob Stammers
The latest figures from Statistics Canada show that more Canadians are reaching the 100-year milestone than ever before. It also reports those of us who reach age 65 can expect to live on average another 20 years in retirement.
Facts In Carrigan Straightforward - By: Mark Newton
The Ontario Court of Appeal released its decision in Carrigan v. Carrigan Estate on Halloween, October 31, 2012: 2012 ONCA 736. The decision is a surprise to pension plan administrators and overturns longstanding practice.
PRPPs Not Dead Yet – Saskatchewan Budget Indicates Legislation On Horizon - By: Shawn Patton
Saskatchewan Finance Minister Ken Krawetz's 2013-2014 budget offered new hope for individuals, businesses and an eager financial services community looking for some good news related to Pooled Registered Pension Plans (PRPPs).
When Is A Pension Assignment Not An Assignment? - By: Stephanie J. Kalinowski, Frank J. Cesario & Natasha D. Monkman
Pension plan administrators are often required to interpret the wording of court orders and separation agreements to determine whether there is a valid and effective assignment of an interest to a member's former spouse. Until now, the courts have not provided clear guidance on what language is needed in order to create an assignment.
When The Logic Fits Together, But Everything Falls Apart - By: Randy Bauslaugh
A recent case decided by the Ontario Court of Appeal called 'Carrigan vs. Carrigan Estate' is likely to cause a seismic shift in the way pension industry professionals view the mandatory spousal death benefit provisions of pension standards legislation in Ontario and, maybe, other jurisdictions as well. Hopefully, government can react swiftly or we will have to wait and hope the Supreme Court will provide an appropriate solution.
Responding To A Rapidly Changing Healthcare Environment - By: Denise Balch & Jacquie Evans
Benefit plans can no longer function in a vacuum and plan sponsors are, therefore, under increasing pressure to examine external factors that will affect their benefits plans. Prescription drug innovations, claiming trends, research, new standards, and legislation are all affecting the environment for employee benefit plans.
Eurozone Update: Latest ECB Plan A Significant Positive
ECB President Mario Draghi recently sketched out a plan that could be a significant positive for the Eurozone periphery. However, it will not solve the underlying causes of the Eurozone crisis, such as competitiveness imbalances, fiscal deficits, and excessive debt, and several risk factors remain.
Division Of Pension Assets Clarified
- By: David C. Hart & Kelley McKeating
Effective January 1, 2012, Ontario legislation regulated the valuation and division of pension assets on breakdown of a spousal relationship. Unfortunately, there has been some confusion about the mortality and interest assumptions which must be used for a valuation date prior to January 1, 2012.
10 Good Reasons To Use A Passive Approach In CAPs - By: Gerry Wahl
Looking at passive versus active from a fiduciary perspective highlights the benefits of a passive approach for all CAP stakeholders.
The Benefits and Pensions Monitor Interview - Don Ezra
Benefits and Pensions Monitor's executive editor, Joe Hornyak, recently had an opportunity to discuss retirement planning with Don Ezra, co-chair, global consulting, at Russell Investments
RDSP - Federal Budget 2012: Powerful Program Or Administrative Carnival? - By: Darren Klorfine
The 2012 Federal Budget announced changes to the Registered Disability Savings Plan (RDSP) as a result of the government's three-year review of the program. While all of the changes are welcome improvements in how the plan operates, the budget falls short in ironing out some of the RDSP's major flaws.
Financial Education In The Workplace - By: Frank Wiginton
Should your company be offering financial education to its employees? Let's briefly look at various factors to help you decide.
OMERS Members Invest In AVCs One Year Later - By: Valerie Sambar
The Additional Voluntary Contributions (AVC) program offered by the Ontario Municipal Employees Retirement System (OMERS) celebrated its first anniversary on January 1, 2012. This innovative retirement savings opportunity was developed in response to requests from members who wanted to invest in the OMERS Fund on a voluntary basis.
Protecting Pensions Against The Threat Of Data Thieves
Businesses are well aware of how to protect against a physical break-in, however, when it comes to electronic attacks many organizations fail to fully understand the risks or ignore the potential threat all together. With corporations such as Honda and Sony recently falling victim to hackers, organization of all sizes are realizing the importance of keeping client data out of the wrong hands.
DC Plans – A New Frontier Or Fatally Flawed? - By: Gerry Wahl
The shift away from Defined Benefit to Defined Contribution plans (Money Purchase Plans ‒ MPPs) is well underway in both the U.S. and Canada. Employers view DC plans as a way of reducing the exposure to DB pension risks. As well, they are being enticed by lower administration costs and contributions. Sponsors, as the administrators, also have less onerous legal and fiduciary roles and responsibilities. DC plans shift the bulk of legal responsibilities from the sponsor and the pension funding burden from the employer to employees.
Investment Beliefs: Separating The Real Stuff From The Fluff -
By: Michael Falk & Jim Ware
Hiring and firing decisions by plan sponsors are habitually poor. They classically hire the 'hot dot' manager and fire the 'Not (so)-Hot-Dot' one (i.e. the underperforming manager). Because good managers don't stay 'down' and hot managers 'cool off,' plan sponsors often make precisely the wrong decision – sell low and buy high.
Retirement Creeping Upwards – Old Age Security - By: Priscilla H. Healy
We need to change our mind-set. We are going to have to work longer. Everyone who retires either voluntarily or involuntarily from the workforce and who still needs an income cannot set up in business for themselves. Jobs (paying) for those over age 60 or 65 need to be available. Accordingly, our personal, social, and workplace perspectives as to older workers are going to have to become much more positive.
Benefits and Pensions Monitor interview Russell Chaplin, chief investment officer, property, with Aberdeen Asset Management.
Benefits and Pensions Monitor's executive editor, Joe Hornyak, recently had an opportunity to discuss real estate with Russell Chaplin, chief investment officer, property, with Aberdeen Asset Management.
Gold's Healthy Pullbacks On
Long Road To $10,000 - By: Nick Barisheff
Gold will continue rising in value over the coming years for one reason: the primary buyers are purchasing physical gold for wealth preservation, and there simply isn't enough physical gold to satisfy their appetites
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William De Vijlder's Blog: Interactive Comment on the Investment Environment
BPM's Daniela DiStefano had the opportunity to speak with William De Vijlder, CIO of Strategy and Partners, at BNP Paribas Investment Partners.
Risk Management: Head Winds And Tail Winds By: Bruce Curwood
Over the last decade I have been a major proponent of institutional investment funds (pensions, endowments, insurance etc.) analyzing their strategies and their risks in a more comprehensive and systematic fashion through enterprise risk management or ERM. Having read countless books and articles on the topic of risk management, it's encouraging to see greater dialogue on the topic in the industry, but it's also a bit exasperating to see so little action by investment funds (apart from the mega funds)!
Benefits and Pensions Monitor interview Darren Spencer, director of alternative investment consulting for Russell Investments' Americas institutional business.
Benefits and Pensions Monitor's executive editor, Joe Hornyak, recently had an opportunity to talk alternative investments with Darren Spencer.
Employers Depend On Traditional Solutions
By: Denise Balch
There is never a lack of content when it comes to the employee benefits industry. A case in point is Helen Stevenson’s recent report 'An End to Blank Cheques' which begs further comment.
Gold and Fiat Currency: Forty Years Later
By: Nick Barisheff
Monday, August 15, marked the 40th anniversary of the U.S. default on the dollar’s convertibility into gold. It was the world’s de facto reserve currency and thus began an experiment with a reserve fiat currency that was doomed to failure before it began, because there has never been a successful fiat currency in all of history.
Leverage … The Good, the Bad and the Benign
Calvin Jordan is chief executive officer at the NSAHO Pension Plan. In 2005, he joined the plan after having provided consulting services to it for most of the prior decade as a consultant in the retirement and investment practices at Mercer. Prior to that, he was with the Maritime Life Assurance Company for 14 years where he held various management and executive level positions.
Pooled Registered Pension Plans – Who Really Benefits? By: Gerry Wahl
Are Pooled Registered Pension Plan really the key to pension reform and will they address the key issues? Stakeholders should be careful what they wish for.
Newcomers Must Navigate Challenges By: Daniela DiStefano
After leaving the insurance industry for six years to raise her children, Kerri Dixon recognized the increasing demand in group benefits as she re-entered the workforce.
A Quick Overview Of The Total Career Benchmark Model By: Tom Walker
The Society of Actuaries Retirement 20/20 initiative, with expert input from both Canada and the U.S., identified the necessity to reconstruct pension systems in a manner which maintains a consistent and reasonable sharing of risks, rewards, and responsibilities amongst the four stakeholders - individuals; society; employers, including unions; and the markets.
Spotlight On Risk And Natural Disasters By: George M. Klar
Does our perception of financial risk stay constant or change over time? To examine this, let's review how investors viewed Japan after the earthquake, tsunami and nuclear meltdown. Japan's triple disaster happened suddenly and response to it was almost as swift. The key Nikkei 225 equity index fell 20 per cent in the week after the March 11th events.
Indalex: Good News For Plan Beneficiaries By: Priscilla H. Healy
Recent developments in insolvency law have given increased recognition to the claims as to underfunded pension plans in corporate insolvencies: the Indalex decision of the Ontario Court of Appeal released April 7, 2011, and the amendments to the federal Pension Benefits Standards Act (the PBSA) effective April 1, 2011.
Is The U.S. Headed For A Japanese-Style Deflation? By: Daphne Gu
The Great Recession of 2008/2009 officially ended in June 2009, with the market staging a massive rally since its low in March 2009. However, for the majority of 2010, the market was directionless, mired with shocks from European soverign debt and mixed economic indicators, while investor sentiment swung like a pendulum.
U.S. Update: IRS Can Disqualify Plans By: Carol Buckmann
There have been some well-known cases in which qualified plans were disqualified retroactively by the IRS for less than major violations of the rules. In one of the most well-known, Tionesta Sand and Gravel 73 T.C. 758 (1980), a plan was disqualified for failing to contain language requiring full vesting on any plan termination or complete discontinuance of contributions, even though no plan termination had occurred.
The Benefits And Pensions Monitor Interview
Benefits and Pensions Monitor's executive editor, Joe Hornyak, recently had an opportunity to talk alternative investments with Sophie Elkrief, head of fundamental alternative strategies and manager of risk arbitrage funds at Dexia Asset Management. Based in Paris, France, she is part of an alternative investment team of 50 portfolio managers and analysts who manage more than $7 billion in assets.
Opportunities for DB Plan Sponsors Under New CICA Accounting Standards
For fiscal years starting in 2011, many Canadian organizations that are not moving to International Financial Reporting Standards (IFRS) will be adopting the new Accounting Standards for Private Enterprises of the Canadian Institute of Chartered Accountants (CICA). This Spotlight, written specifically for finance professionals, outlines the opportunities that the new accounting rules may present for organizations that provide employee future benefits through one or more Defined Benefit pension plans.
When Is Disability Insurance Not Insurance? By: Priscilla H. Healy
The plight of the Nortel employees who were on long-term disability when the company filed for CCAA protection will have to be resolved by the courts, at least for the 40 employees who did not consent to the settlement reached last March, and are taking their complaints to the Supreme Court of Canada.
Conversion Of DB To DC Plans By: Evan Howard
Most employers with Defined Benefit plans are looking to contain their pension costs. Accordingly, many are switching to Defined Contribution plans in an effort to achieve more predictable funding costs. However, making such a switch can be complex and does not immediately eliminate the funding obligations associated with the DB pensions already accrued or in pay.
The Boomers Retire: A Guide for Financial Advisors and Their Clients, 2nd Edition By: Lynn Biscott, CFP, RFP
One of a number of books coming on strong this decade with the words boomer and retire found on their cover, the author promises that this revision of her 2008 edition will appeal to both the financial advisor and the end user of her expertise, the burgeoning population of mature clients. Because so many clients are now entering the distribution stage of their wealth and closing out that of accumulation, it has an assured market.
OMERS Members get Green Light to Invest RRSPs In Fund By: Sheryl Smolkin
Members of the Ontario Municipal Employees Retirement System will not only have a great Defined Benefit pension plan when they retire, they can now further enhance their retirement savings by investing their RRSP savings in the OMERS fund. With more than $48 billion in net investment assets at the end of 2009, OMERS represents 400,000 members and 928 government employers including municipal workers, firefighters, police, firefighters, and transit workers.
Driving Female Talent Development Through Mentoring By: Alice Longhurst
The career advancement gender gap is closing. A new report indicates that, in America, 2010 saw the lowest income disparity between the sexes on record, currently at 17 per cent, down from 24 per cent a decade ago. Thile these numbers are promising, it is important to recognize and address the remaining barriers to ensure reaching gender parity in the workplace doesn't take another decade.
The Benefits And Pensions Monitor Interview
Real estate appears to be capturing more and more Canadian pension fund investment dollars. In recent months, we have seen OMERS, the CPPIB, and the Ontario Teachers' Pension Plan announce majore real estate investment deals abroad.
Crisis Lessons: Leadership And Cultural Traits Of Top Investment Firms By: Jim Ware & Keith Robinson
A culture study of 60 asset management firms, mostly from the U.S. and Canada, revealed six clear winners emerging from the chaos and challenges of the financial crisis. These winners, the top decile of the firms studied, were chosen because their firm-wide survey responses indicated superior results in these areas...
Should Your Plan Consider an Outsourced Investment Solution? By: John Jawrocki and Diane Smola
the global financial crisis has left many investors stymied about how to make decisions and what they could have done better. The crisis has forced most foundations, endowments, and other institutional investors to find ways to save money while improving performance and risk management oversight.
Business And Science Address Disability Costs By: Bev Lever
Through the Workplace Disability Benchmarking (WDB) program, scientitsts and businesses are working in partnership to address the negative impacts of exploding workplace disability costs and the loss of employee productivity.
Investing Must Fully Embrace Risk, Not Just Return By: Bruce Curwood
Now seems like an especially opportune time for trustees, directors, investment committees, and plan sponsors to make significant and meaningful changes in how they manage risk. While I look at risk primarily from the perspective of Defined Benefit pension plans, much of what I discuss applies to other long-term funds such as endownments.
Are Pension Benefits Deductible From Wrongful Dismissal Damages? By: John D. Campbell & Stephanie L. Turnham
The general measure of damages in a wrongful dismissal case is the the amount that an employee would have earned had he or she been given proper working notice. In assessing damages, a court will take into account the salary and other benefits that the employee has lost as a result of a termination with insufficient notice, but will also deduct any income that the employee received from the other employment during the reasonable notice period.
The Dawn Of A New Funding Era? By: Phil M. Rivard
In the 30 to 40 years since most multi-employer and public sector pensions plans have been in existence, the most significant change in funding requirements occurred in the late 1980s when the majority of jurisdictions introduced solvency funding requirements.
Using The Past To Predict The Future By: Paul Owens
How often have you heard the phrase "past performance is not an indicator of future results" when looking at historical returns? I'll bet it's often. Yet despite this, we continue to use historic data, and often the most recent year's results, to influence our asset mix allocation. Why is this?
You've Lost Your Job - What's Next? By: Ian Burns
Losing your job is an emotions, gut-wrenching experience, whether you are being terminated or offered some kind of early retirement package. Having someone say they chose you as part of an "employee reduction program" can be a crushing blow to your confidence and self worth.
Case Study: Sydney's M4 Motorway From: RBC Global Asset Management (U.S.) Inc., Infrastructure Investment Group
At midnight on February 15, 2010, with little coverage from the industry or media, a landmark infrastructure transaction reached completion. On that day, a 20-year concession on the M4 Western Motorway, a major highway in the State of New South Wales (NSW), Australia reached its close and tolling ceased.
Surplus Battle Concludes By: Priscilla H. Healy
The Supreme Court of Canada issued its ruling on October 7, 2010, in what is surely the concluding chapter in the surplus dispute between Hudson's Bay and those of its employees who were transferred to the North West Company (NWC) on the sale of Hudson's Bay's northern stores to the NWC in 1987.
Targeting Your Strategy For Maximum Impact By: Denise Balch
This May, Connex Health hosted its 8th Annual Employer Forum on workplace health and productivity management with a theme of 'Targeting Your Strategy for Maximum Impact.' This year's events included sessions on the detection and management of chronic diseases, generic drug pricing and pharmacy legislation, biologics and subsequent entry biologics, workplace programs for cancer screening, fatigue, nutrition and weight loss, as well as the relationship between workplace health and human resource policy.
Supplemental Pension Plans: Choosing To Be Different By: John Montalbano
In terms of financial reform, the next few years will be no stranger to policy overhauls around the world - a by-product of the still-unfolding financial crisis.
Inside The Pension Crisis By: Adam C. Tosh
No crisis is real until it's too late. This means no wake-up call until the accounts run dry. That seems to be the shared mindset of many U.S. state and local governments towards their vine-withered pension funds.
Ontario Pension Reform Goes In Wrong Direction By: Mark Newton
The Ontario government has released its proposed measures for Phase 2 of its pension reform agenda. These reforms follow Bill 236 that received Royal Asent in May of this year.
The DC Pension Plan Investment Wilderness By: Mark Barnicutt, MBA, CFA
Over the past year, we've spent considerable time educating ourselves about the investment alternatives available to Canadians with Defined Contribution pension plans.
The Healthcare Costs Recovery Act: Not Just For Bad Drivers By: Valerie Dixon
The Health Care Costs Recovery Act came into force in British Columbia just over a year ago. Under that legislation, if a person receives healthcare services for a "personal injury" as a result of the negligence or "wrongful act" of a "wrongdoer," must indemnify the Ministry of Health for costs associated with the healthcare received.
Harmonized Sales Tax (HST) & GST Faq For Pension Plans And Other Employee Benefit Arrangements By: Greg Hurst & John Parker
Changes to 'place of supply rules' and new proposed HST rules for financial institutions that are applicable to 'investment funds' will mean that many RPPs, DPSPs, and other similar trusteed arrangements may either have to pay an HST assessment or become entitled to an HST rebate.
Federal Government Tweaks Pension Solvency Funding Rules And Investment Limits By: Mark Newton
On May 3, 2010 the federal department of finance introduced draft regulatory amendments to the federal Pension Benefits Standards Act (1985), concerning solvency funding requirements and quantitative investment limits.
U.S. Hearlthcare Reform: Early Retiree Reinsurance Program By: Susan M. Nash, Amy M. Gordon & Joanna C. Kerpen
Employers providing health coverage to early retirees in the U.S. should be aware of the new retiree reinsurance program under healthcare reform that goes into effect June 1, 2010.
Understanding And Managing Stakeholder Risk In The DC Environment By: tony Ioanna and Ivor Krol
In Part 1 of this three part series, we revisited the fundamentals of a CAP in order to expose the mismatch between the information that most plan participants are provided with to assist them with their retirement planning and their underlying retirement objectives. In this second article, we will continue to examine what can be done to align decision-making tools with DC plan participants' needs in order to mitigate the risk for sponsors and members alike.
RCAs And Key Employee Retention By: Pierre Ghorbanian
As the current recession and economic crisis continues to grip world economies, large stable companies and small businesses are both feeling the crunch. Bankruptcy and mergers/acquisitions are now daily news stories.
Understanding And Managing Stakeholder Risk By: Tony Ioanna & Ivor Krol
This past decade has witnessed a significant increase in the number and size of Capital Accumulation Plans (CAP), particularly DC pension plans, Group RRSPs and DPSPs.
A New Bias: An Unprecedented Opportunity To Initiate True Reform By: Warren Laing
In an effort to articulate the nature pension reform in Canada might take, significant work has already been completed. The media, government committees (both federal and provincial) and various organizations in the private sector have submitted a range of options and opinions that is equalled only by the range of biases those same options and opinions represent.
The Pension Holy Grail: Can It Be Found? By: Paul Owens
Lately, much has been written about the ideal pension system for Canada. One of the biggest problems is the lack of unamity as to what constitutes an ideal pension/retirement income scheme. The gap between where we are today relative to where we'd like to be is not solvable in one step.
Canada's Pension Pillars In Need Of Repair: Report Of Provincial Finance Ministers By: Mark Newton
The steering committee of provincial finance ministers has posted its report on retirement income adequacy in Canada and its proposals for improving pension plan coverage. The committee is chaired by Colin Hanson, the minister of finance for British Columbia.
Mandatory Retirement Being Retired Across Canada By: Derek Knoechel
Mandatory retirement has a long and storied history as part of the Canadian labour system. As we enter 2010, it appears that a new chapter is being written, one in which mandatory retirement is the exception rather than the norm.
Perspective On The Recent Money Market Fund Reforms By: Carolyn Cross
On January 27, 2010, the SEC approved new reforms constraining risk in money market funds. The reforms modify Rule 2a-7 of the Investment Company Act of 1940 which governs money market funds. To provide investors principal protection and liquidity, Rule 2a-7 imposed strict investment guidelines on money market funds, and, in turn, allowed funds to use the amortized cost method of pricing and to transact at a stable $1.00 NAV.
Investment: The Case For Global Fixed Income
The global fixed income markets have significantly expanded and developed over the past two decades, with many advances occurring in more recent years. There are now more than 100 countries with fully or partially functioning fixed income and/or currency markets.
Laying Down the Infrastructure Concept By: Joe the Investor
There is much anticipation over the money being pledged to renew aging infrastructure, and, in some cases, expanding it throughout North America. Much of the anticipation focuses on private building and/or operation.
In Praise Of Innovation What Investors Should Consider About Both MPT And Behavioural Finance By: George Klar
For several months, rumours circulated on the internet about and unorthodox medical break-through that dealth with a heart-wrenching disease called Multiple Sclerosis (MS).
The HR Space - When The Virtual And Real Worlds Collide By: Lyne Duhaime
An IBM employee from Quebec made headlines last month when her disability benefits were cut off by the insurance company after it saw pictures of her on Facebook. Despite being off work for depression, the employee had posted photos of herself on vacation at the beach and at a Chippendale's show.
Global Markets At The End Of A 'Lost Decade' By: James Fairweather
As the end of one of the worst (inflation-adjusted) decades in stock market history draws near, investors might be forgiven for viewing the years since the bursting of the dotcom bubble as a 'lost decade'. But while equity returns have been dismal, the last 10 years have not been entirely in vain.
Legal Roundup 'Legal Responses To The Federal Government Pension Regulation Proposal'
Plan sponsors will be required to fully fund pension benefits on plan termination. Any solvency deficit that exists at the time of termination will be required to be amortized in equal payments over no more than five years.
Pension Insolvency: Intelligent Solutions Needed By: Mark Newton
The plight of retiress and other members of Nortel's and other insolvent pension plans brings into focus the need for intelligent solutions to complex pension issues. Unfortunately, much of the recent public debate has been unbalanced, ill-informed and has failed to properly recognize the policy objectives the insolvency legislation and pension legislation.
Planning For A Pandemic: CCOHS' Guide To Staying Safe By: The Canadian Centre for Occupational Health and Safety (CCOHS)
Every few decades there is a radical change in the influenza virus. This large change means many more people will be affected as they may not be immune to this disease. If a large number of people become ill, a pandemic may occur.
The Case for Quality By: Arman Gevorgyan, CFA, and Amy Orr
Early in April 2009, Rogerscasey published a research brief in which we argued that clients should patiently and methodically rebalance into U.S. equities throughout 2009. Within broader equities, we urged clients to invest in high quality strategies and avoid deep value managers.
Don't Be Afraid to Get a Second Opinion By: Sadaf Siddiqui
Facing a serious illness can be nothing short of overwhelming. Imagine being told by your doctor that you have been diagnosed with a critical medical illness.
The Origins Of The Subprime Fiasco In The U.S. By: Joe the Investor
The subprime meltdown was been documented by many sources, but where did it really come from? How long were the seeds planted before the eventual calamity took place? Who or what are the key factors in allowing it to happen?
Sales Tax Cost Of Administration By: Craig Robertson
Two recent decisions of the Federal Court of Appeal (FCA) - General Motors of Canada and The Canadian Medical Protection Associations, could mean GST savinigs opportunities for employers and other sponsors of benefits plans.
The More Things Change, The More They Stay The Same By: Jonathan Norwood
Well, it's official. In rather anti-climatic fashion, both GM and Chryslef have now filed for Chapter 11 bankruptcy protection. And quite frankly it is hard to feel any empathy for either. After all, their arguably obtuse management teams still had Hummer and Hemi on the brain while the Japanese were introducing their second generation of hybrid vehicles into North America.
Surplus Distribution Dispute Decision Alleviates Some Concerns By: Priscilla H. Healy & John R. Varley
The decision of the Financial Services Tribunal (FST) in the Montreal Trust surplus distribution dispute has alleviated much, although not all, of the 'you can't get there from here' concern that had been raised by reason of the superintendent's initial position in that matter.
Finding Good Employees - Varsity Sports In Canada 'A Conundrum' By: Laura Slipp
Employers advertise they are striving for success in business and reaching out to identify the best candidates to work in their organizations.
What's Driving The Market By: Sam Wiseman
This note does not attempt to join the revived fad of picking a market bottom; we do not believe we are wise enough to do so, nor can we be. History has demonstrated conclusively that no one can make money timing the markets, except on a lucky occasion. You need to be correct more than 70 per cent of the time to do so, and no one ever has.
Rebalancing In A Crisis By: Michael Thomas
Dramatic and ongoing declines in the equity markets across the globe have caused some to question whether adhering to their policy portfolios and rebalancing rules still make sense. In general, Russell advocates sticking to one's policy targets and continuing to follow existing rebalancing rules as long as this remains feasible.
Pension Reform In Ontario: Shuffling The Deck Chairs By: Priscilla H. Healy
Three governmental task forces established by four provincial governments have recently released reports to the irrespective governments as to reforms in pension legislation and, in Ontario's case, as to reforms in the pension regulatory structure.
Pension Election Deficit Disorder By: Richard Taylor
The last 12 months have not been kind to pension funds. The numbers are staggering and sobering. More than $5 trillion has evaporated, as if vanished into thin air, since October 2007. The solvency of insurance companies, blue chip corporations, and the financial instruments that underpin them are under profound stress.
Is Senior Care The New Child Care? By: Paul Hogan
Families who looked for child care services 20 years ago are looking for caregiving services again, only now it‟s not for their children, but their senior parents. As the population ages and more working Boomers care for their parents, the impact on the workplace can be profound.
Pensions The Pension You Need Not Worry About By: Bruce Little
Pension worries are back at the forefront of Canadians‟ concerns and the top of their politicians‟ in-baskets. The stock market crash has undermined the personal savings of Canadians who count on their share holdings for retirement income, while those expecting a company pension built over years of work see a parade of equally grim stories.
Governance Who Is Managing Your Retirement Income? By: Jon Stokes
Funding pension plans and securing the financial future of pension participants and beneficiaries is a growing global challenge. An aging population and increasing longevity will continue to limit the ability of the state to act as an effective provider of retirement income for individuals worldwide.
DB Pensions Funding Relief Update
With many Canadian Defined Benefit pension plans slipping into solvency deficiency as a result of the performance of global financial markets since last summer, pension jurisdictions have enacted or are considering measures to deal with the funded status of plans.
Facts And Figures On Cycles
And Their Implications For
Institutional Investors By: Harry Marmer
“Study history, study history” was one of the many pearls of advice that Sir Winston Churchill gave us. Every new recession and accompanying bear market presents us with the opportunity to study history and review the statistics of capital market cycles in order to gain some perspective on the current market environment and how to be bestpositioned for the future.