Hot Topic Tidbit - TFSAs Can Create Rewards February 1, 2010
Rather than silo benefit programs, TFSAs (Tax-free Savings Accounts) can create more effective rewards on a cost effective basis, says Jake Clark, of Firm Consulting. Speaking in a session on ‘The Impact of the Tax-Free Savings Account (TFSA) on Canadian Employee Benefits Programs’ at the HRPA’s 2010 Annual Conference & Trade Show, he said while they have proven popular among individual investors, the uptake on the group benefit side has been minimal. Of those using TFSAs, 40 per cent are using them to save for retirement. However, for private employers grappling with healthcare costs and trying to bring more consumerism into their benefit plans, TFSAs offer an opportunity to scale back traditional plans and create flexible plans with co-pays and deductibles by directing some of the funding from scaling back into TFSAs as an employee benefit.
Courtesy of Benefits and Pensions Monitor website News Alerts
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Hot Topic Tidbit - Living Standard In Retirement Will Decline January 4, 2010
A “significant minority” of middle and upper-income Canadians will see their living standard decline in retirement because government pension programs do not replace a enough of their pre-retirement incomes and they are not saving enough to replace the shortfall, says an Ontario report on Canada's pension system. The report says there has been a sharp decrease in poverty among the elderly in Canada since the 1970s, however, much of the improvement was achieved by the mid-1990s. Since then the situation has stabilized or deteriorated mildly. This is compounded by the fact fewer workers today are covered by employer pension plans and their retirement periods are growing as they live longer. And, despite the decline of company pensions, there has been no increase in personal savings to make up for this. The study offers no proposals to resolve the situation, but it does warn that if nothing is changed, some future retirees may not have as much retirement income. The report will be tabled at a meeting of federal and provincial finance ministers today in Whitehorse, YK.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Hot Topic Tidbit - Privacy Issues Raised January 4, 2010
The case of an IBM employee from Quebec whose disability benefits were cut off by the insurance company after it saw pictures of her on Facebook raises interesting privacy issues, says Lyne Duhaime, a lawyer in the Montreal, QC, offices of Fasken Martineau DuMoulin LLP. In the article ‘The HR Space – When The Virtual And Real Worlds Collide’ on Benefits and Pensions Monitor’s ‘website, she asks whether photos posted on a social media website personal information and if employers, disability carriers, and other organizations are prohibited from using such information? While the answer varies across the country, she suggests employers learn the rules in each jurisdiction and then, if relevant, establish policies in which employees are warned that the employer may monitor the Internet and make use of any information it learns about them.
Hot Topic Tidbit - Economy Shows Positive Factors November 19, 2009
The Canadian economy is showing a number of positive factors, says Pierre Ouimet, chief strategist at UBS Global Asset Management. Speaking at the Investment Counsel Association of Canada’s annual meeting, he said he expects domestic demand to continue to improve and the labour market in Canada remains far healthier than the U.S. market. In addition, signs of a rebound in the Canadian housing market are also having a positive impact on the state of consumer confidence which is fuelling a return to consumption.
Hot Topic Tidbit - Three-tiered Prescription Pricing In Ontario November 5, 2009
Ontario has moved to a three-tiered system for prescription costs, says Wendy Murkar, vice-president, claims administration, at Green Shield Canada. Speaking at its 2009 Benefits Forum, Crisis … What Crisis?, she said the current system of the Ontario Drug Benefit plan and rebates and professional allowances means that the provincial plan pays about 50 per cent of the manufacturer’s list price. Pharmacy benefit managers and some large companies have been able to negotiate their own price for prescriptions which means the highest price is being passed on to consumers because there are no regulations on how much pharmacies can mark prices up. She cited the example of Lipitor where the price for the ODB is $202.18 for a prescription and it is $218.60 for PBMs and $267.76 for the public and re-imbursement co-pay plans.
Hot Topic Tidbit - Treatment of LIFS Changes July 16, 2009
Ontario is changing the treatment of locked-in accounts. The Financial Services Commission of Ontario says the some of the key changes will give owners of old LIFs and LRIFs a one-time opportunity from January 1, 2011, to April 30, 2012, to withdraw in cash or transfer to an RRSP or RRIF up to 50 per cent of the total market value of the assets of the fund. As well, from January 1, 2010, to December 31, 2010¸ owners of new LIFs will have a one-time opportunity to withdraw in cash or transfer to an RRSP or RRIF an additional 25 per cent of the total market value of the assets of the fund that were transferred into their new LIF account on or before December 31, 2009. After December 31, 2009, anyone who purchases a new LIF will have a one-time opportunity to withdraw in cash or transfer to an RRSP or RRIF up to 50 per cent of the total market value of the assets of the fund.
Hot Topic Tidbit - Canadians Living Longer July 16, 2009
Canadians are living longer and will collect pension benefits from the Canada Pension Plan (CPP) for a longer period of time, says a study by the Chief Actuary of Canada. ‘The CPP Mortality Study’ shows that by 2050, male beneficiaries are expected to receive their retirement benefit for an additional 3.3 years and female beneficiaries for an additional 2.3 years, compared to the same study in 2005. The increase in life expectancy is anticipated to grow to a total of four additional years for both genders by 2075. Future mortality improvements are expected to come more slowly and at older ages, as mortality rates at younger ages are already very low. Most of the increase in life expectancy at birth over the last 30 years has come from improvements in mortality at ages 65 and over. As a result, life expectancy at age 65 has increased from 14 to 18 years for males and from 18 to 21 years for females. The study says the CPP will remain viable for the next 75 years. It can be found at: http://www.osfi-bsif.gc.ca/osfi/index_e.aspx?ArticleID=3122
Hot Topic Tidbit - Contribution Limits Need Replacement
February 25, 2009
The current contribution limits for Defined Contribution pension plans, RRSPs, and Defined Benefit pension plans should be replaced with a $1 million to $1.5 lifetime accumulation limit, says James Pierlot, of Towers Perrin. Speaking at an ISCEBS-Toronto Chapter 2009 educational benefit series session, he said this represents the amount that routinely accrues in public sector pension plans. Under his proposal, there would be no limit on annual contributions, but contributions would have to stop once the limit is reached. Excess amounts would need to be withdrawn or be subject to a penalty tax. The benefits of this approach, he said, are that it is easy to understand, equitable, and it allows for catch-up/late career retirement saving which many Canadians are forced to do.
Hot Topic Tidbit - Canada To Avoid Deep Downturn
December 19, 2008
Canada will avoid a deep downturn in 2009 even at the world economy grows at its weakest level in 27 years in 2009, says the National Bank Financial Group. It predicts global growth of 1.6 per cent next year. “Even if deleveraging and forced asset sales let up in the months ahead, which is likely, we do not expect the world economy to expand by more than 1.6 per cent in 2009,” says Stefane Marion, chief economist and strategist at National Bank. In Canada, the bank expects total GDP growth of 0.7 per cent in 2008, and no growth in 2009. While a technical recession “seems inevitable,” the National Bank expects monetary policy and budget stimulus measures from Ottawa to help sustain domestic demand and prevent a recession as severe as the one of the early 1990s.
Hot Topic Tidbit - Deficit Relief Measures Coming
November 18, 2008
Although the specifics are not known, it is likely that funding relief measures will be available for Quebec and federally-regulated pension plans, says a Mercer 'Communiqué.' However, it is unclear whether the measures will apply to all Defined Benefit pension plans or only to those facing “major financial difficulties.” In the absence of relief measures, the additional contributions required from employers may jeopardize the future of some of their businesses. The federal minister of finance has indicated that his department is reviewing options to provide funding relief to DB plans such as the 2006 temporary funding relief measures which allowed the consolidation of solvency deficits. The Quebec government is contemplating special rules including consolidation of solvency deficiencies and faster use of actuarial gains
Hot Topic Tidbit - Access To Cancer Specialists Provided
April 24, 2008
ACE Life has added CAREpath's Navigation System to its group critical illness plan – Spectrum. The plan will now offer access to a network of cancer specialists to its clients. Its provides individuals who have been recently diagnosed with cancer with one-on-one telephone counselling, guidance, and support through the stages of treatment.
Hot Topic Tidbit - Canadians Fail To Factor In Healthcare
February 19, 2008
Few working Canadians have factored the need to pay for certain aspects of their healthcare into their retirement savings, says a Sun Life Financial survey. It reveals that only nine per cent of working Canadians have accounted for healthcare expenses in their retirement savings and 80 per cent of Canadians expect that their provincial healthcare program will provide them with health benefits in retirement. Canadians appear to know that they need to put aside money for healthcare spending in retirement, but have not taken steps to address the reality.
Hot Topic Tidbit - Benefits Gaining In Popularity
February 19, 2008
Successfully wooing job candidates takes more than salary alone, says a survey by Robert Half International. While 31 per cent of chief financial officers said offering higher compensation than competitors is the most effective incentive for attracting accounting professionals, 20 per cent felt the benefits package had the greatest influence, up from one per cent five years ago. The findings also suggest traditional incentives are a higher priority today. While the popularity of benefits surged, the number of financial executives who feel telecommuting and flexible work schedules are the top draw fell eight points, from 28 per cent in 2003 to 20 per cent in 2008, on par with benefit packages.
Hot Topic Tidbit - Assessments Replace AIR Fees
June 13, 2007
The Financial Services Commission of Ontario (FSCO) is introducing a new pension assessment process to provide a more effective means of recovering pension sector costs. This assessment process replaces the Annual Information Return (AIR) filing fee. It focuses on ensuring an accurate recovery of pension sector expenditures and minimizing the likelihood of a surplus or a shortfall in the assessment of pension sector costs. Mark Newton, of Heenan Blaikie, says the annual filing fees could change significantly year-to-year, resulting in less predictability on the part of pension plan administrators, thereby adding another disincentive to establishing pension plans. This is yet another example of regulators not encouraging the establishment and maintenance of pension plans, he says.
Matheis Associates Benefits Consultants Inc.
20th Anniversary May 16, 2006
Matheis Associates Benefits Consultants Inc. celebrated its 20th anniversary by holding an open house for its new, expanded offices in Pickering, ON. On hand for the ribbon-cutting were, left to right, Chris Reynolds, president of Investment Planning Counsel; Talia Matheis, manager, marketing and communications, Matheis Associates; David Ryan, mayor of Pickering; Patti Matheis, vice-president, Matheis Associates; and Harry Matheis, president of Matheis Associates and branch manager of Investment Planning Counsel.
Hot Topic Tidbit - Work-life Balance Needed
April 26, 2006
Employers need to encourage employees to achieve a work-life balance if they hope to bolster the mental health and well-being of their workforce, says John Cardella, chief people officer at Ceridian Canada. Speaking at a seminar at the Canadian Institute’s 2006 Best Employers In Canada Conference, he said employers should consider flex hours and mobile work as two methods to help employees achieve a work-life balance. As well, employees need to learn how to manage technology which is now “managing us.” Cell phones, Blackberries, and eMail are blurring the distinction between work and home, he said. Estelle Morrison, director, Lifeworks Strategic Solutions at Ceridian, said depression is the fastest growing cause of days lost to disability.
Matheis Associates Benefits Consultants Inc. celebrated its 20th anniversary by holding an open house for its new, expanded offices in Pickering, ON. On hand for the ribbon-cutting were, left to right, Chris Reynolds, president of Investment Planning Counsel; Talia Matheis, manager, marketing and communications, Matheis Associates; David Ryan, mayor of Pickering; Patti Matheis, vice-president, Matheis Associates; and Harry Matheis, president of Matheis Associates and branch manager of Investment Planning Counsel.