Low Income Workers Face Claw-backs
The plan to enhance Canada Pension Plan benefits will not do much to improve the retirement income prospects of low income workers, says ‘Unfinished Business: Pension Reform in Canada,’ a study from the Institute for Research on Public Policy. Since taking office in the fall of 2015, the Liberal government has made important changes to Canada’s retirement income system including restoring the age of eligibility for Old Age Security (OAS) and the Guaranteed Income Supplement (GIS) to 65; increasing the GIS top-up for single elderly persons; and agreeing with the provinces to enhance CPP benefits, starting in 2019. However, although each these changes on its own appears positive, the way they interact with each other and with the tax system is problematic. In particular, the study finds that “the CPP increase will be of little value to low income earners because most of it will be taxed back through income taxes and reductions in other social benefits, which are income-tested.” They call for a full review of over-lapping tax rates and claw-backs, which undermine the usefulness of pre-retirement saving for low-income earners and of staying employed for older workers.
Few Changing HR Models
Just more than one-third (35 per cent) of organizations worldwide employ an HR service delivery model that includes the three components of centres of expertise, HR business partners, and HR shared services, says Mercer’s ‘2017 HR Transformation Study – How HR Needs to Change.’ The successful operation of all three components is an attribute of high-performing HR functions. Moreover, few (17 per cent) plan to change from their existing model. “Organizations are making changes in the interest of greater efficiency and increased agility, which requires a combination of technologies,” says Ilana Hechter, partner and leader of talent strategy and transformation at Mercer Canada. “Those that have been expanding shared services and business partnering skills have had the best success aligning HR to business needs.”
More Choice Offered In Life Insurance
The Empire Life Insurance Company now offers an employee benefit option that gives group customers more choice in their life insurance benefits. Customers with 20 or more employees that add the minimum amount of life insurance can choose between traditional life insurance and a blend of life and critical illness insurance. Life insurance pays a tax free death benefit; while critical illness pays a tax free disability benefit if an individual is diagnosed with one of a list of life threatening illnesses. The ability to add both types of insurance to minimum coverage plans helps leaders provide protection that most closely aligns with their benefits philosophy and employee needs.
Platform Offers All In One HR
Rise People has introduced an all-in-one HR platform that brings HR, benefits, and payroll together in one place. By bundling these HR services, it streamlines people management to help companies realize operational savings and fulfill employee experiences. Rise also serves as a nationwide benefits advisor, offering comprehensive life and health insurance coverage: extended healthcare, dental care, vision care, life, accidental death and dismemberment, group disability, healthcare spending accounts, lifestyle spending accounts, and employee and family assistance program. Employers have control over their benefits costs through transparency into their plan, with flexibility to build affordable coverage that meets their needs.
Tyndall Joins Ontario Teachers’
Beth Tyndall is chief people officer at the Ontario Teachers’ Pension Plan. She joins Ontario Teachers’ after more than a decade at Deloitte, where she was most recently associate partner and national talent leader, audit and consulting. She previously held the position of national talent leader, tax.
Majority Vote Rule Questioned
While the Canadian Coalition for Good Governance has worked for the last 10 years to bring majority vote rules to Canada, the featured speaker at its annual public meeting questioned the purpose of these rules. Leo E. Strine, Jr., chief justice of the Delaware Supreme Court, said majority voting came about from institutional voters who wanted to express outrage over a company practice without having to put up a candidate. So if 47 per cent vote is in favour of something, it sends a message without requiring any change. This along with the minor funding commitment required to bring a matter to the board makes boards more and more sensitive to the whims of stockholders. So while board are being required to have independent directors, they are being harnessed with numerous plebiscites that are actually harming holding them back, he said. And they are accountable to only one constituency, the shareholders. This means that efforts to adopt environmental, social, and governance practices at companies always take a back seat to the shareholders if they are not sensitive to these issues.
Work-Life Balance On Upswing
Workers’ abilities to juggle the demands of the office and home are on the upswing, with those in charge greatly aiding the cause, says research from Robert Half Management Resources. Its survey shows more than one-third of Canadian professionals (37 per cent) said their work-life balance has improved from three years ago. Nearly nine in 10 respondents (87 per cent) reported their manager is somewhat or very supportive of their efforts to achieve this balance and 64 per cent said their boss sets a good or even excellent example. To help their teams achieve work-life balance, managers should talk to staff about their objectives and what can be done to help. Managers also need to show them the way as if they are sending eMails at all times of the day and night, staff will figure they must do the same. Employers should also regularly and broadly communicate options available to workers.
Global Equities Considered Overvalued
A record number of money managers think global equities are overvalued, says the Bank of America Merrill Lynch’s monthly fund manager survey. A net 44 per cent of managers this month said global equity markets are overvalued, up from a net 37 per cent in May. Broken out by region, a record net 84 per cent of survey respondents said this month that the U.S. is the most overvalued region for equities, compared to a net 82 per cent last month. On the flip side, a net 18 per cent and 48 per cent, respectively, said that European equities and emerging markets equities are undervalued, compared to a net 20 per cent and 44 per cent in May.
SHARE Offers Two Courses
SHARE’s pension leadership courses will feature pension investment and governance basics and a trustee responsible investment master class. Designed for new trustees and as a refresher in basic pension investment and governance, a three-day course will cover the Canadian retirement system, pension law and trustee duties, investment basics, plan funding, the role of the actuary, and capital stewardship from a union perspective. The trustee master class provides experienced trustees with the opportunity to explore strategies for embedding responsible investment into pension fund governance and investment oversight. It takes place October 10 to 12 in Toronto, ON. For information, visit www.share.ca
Canadian Economy Humming Along
The Canadian economy is humming along as the country nears its 150th birthday, says RBC’s ‘Economic Outlook’ quarterly report. Consumer spending, housing starts, and a strong turnaround in business investment are largely responsible for the continued momentum that has built on the robust gains in the second half of last year. It expects real gross domestic product to grow by 2.6 per cent in 2017 and 2.1 per cent in 2018. Continuing an eight-year trend, consumers are expected to provide a large lift to the economy in 2017. With business investment on the rise and government spending on infrastructure ramping up, it projects the economy will grow at nearly double the average pace of the prior two years. “Canada’s economy is on track to post its strongest gain in three years”, says Craig Wright, senior vice-president and chief economist at RBC. “While we don’t discount the risk of a slowdown resulting from the pending renegotiation of NAFTA or the expected cooling of the housing market, we remain confident the economy will continue to grow at an above-potential pace for the remainder of this year.”
LifeLabs Offers Pharmacogenetic Testing
LifeLabs has partnered with GenXys Health Care Systems to offer Canadians a personalized medicine service that helps their physicians prescribe medications based on each patient’s specific medical and genetic profile. The pharmacogenetic data collected identifies 60 genetic variations that affect how a patient metabolizes and responds to medications. Prescribing the right medication for an individual is complex and the wrong medication or an incorrect dose can have serious health consequences for patients. In Canada, adverse drug reactions (ADRs) cause 10,000 to 22,000 deaths and cost the Canadian healthcare system over $13 billion per year.
Discrimination Claims Dismissed
Claims from three retired female Mounties who argued that elements of the RCMP’s pension plan are outdated and sexist have been dismissed by the Federal Court. The three had decided to work part-time temporarily for the national police force after having children to accommodate child care arrangements while doing shift work. When they returned to their full-time jobs, they learned their part-time work was not considered pensionable service and they would not be permitted to make doubled-up contributions to buy back the time they had not worked. Justice Catherine Kane decided the women did not lose pension benefits because they were women or parents, but because they chose to work part-time. She agreed that while the majority of Mounties who work part-time are women with young children, she said they also benefited from spending more time with their children and less stress in trying to find child care. As for the overall impact on their pensions, she found it would be reduced, on average, by five per cent but that “it is difficult to conclude that the impact is necessarily adverse.”
Use Of Professionally Managed Funds Grows
By 2021 three-quarters of participants in its record-keeping plans will be solely invested in professionally managed options ‒ target-date funds, managed accounts, or balanced funds, says the Vanguard Group. Its annual report, ‘How America Saves 2017,’ shows that at the end of 2016, 46 per cent of participants invested in a single target-date fund, three per cent had a balanced fund, and four per cent invested solely in a managed account. Only 17 per cent of participants were invested solely in one of these options in 2007. “These diversified, professionally managed investment portfolios dramatically improve portfolio diversification compared with participants making choices on their own,” says the report.
Duchesne Has New Role
Treatment Cannot Be Divorced
Employers must remember that the treatment of a disability cannot be divorced from the disability, so they will have to allow the use of medical marijuana in the workplace if authorized, says Calley Greenberg, legal counsel at Canopy Growth Corporation, the parent company of Tweed, Mettrum and Bedrocan, licensed producers of medical cannabis. Speaking at the Employee Assistance Program Association of Toronto (EAPAT) session ‘Marijuana In The Workplace’ with Amanda Daley, its vice-president, medical, she said employers should build accommodation into their business model instead of taking a one-off approach. This means they shouldn’t wait, for example, to provide accommodation for visually impaired employees. They should have the systems already in place. The same is true of medical marijuana. She also advised employers to develop medical marijuana usage policies which set out, for example, where to self-medicate in the workplace. Daley said Canada has had a formal medical marijuana program since 2001. In 2013, there were about 40,000 patients in the program and by 2024 this is expected to reach 400,000. It is used for pain most commonly and that is where most of the research has been done. Others use it to treat, anxiety, post-traumatic stress disorder, and nausea resulting from chemotherapy treatments for cancer. She called it a growing topic in the benefits carrier area and the issue now is how to cover it under a drug plan since it does not have a DIN (drug identification number).
Technology Shapes Products
The Benefits and Pensions Monitor Meetings & Events ‘Technology and Healthcare Plan Innovation’ session will look at how innovations are shaping insurance product coverage and the implications for plan members and sponsors. It takes place September 14 in Toronto, ON. For information, visit Technology And Healthcare
Hesitation Has Detrimental Effects
The hesitation by employees suffering from mental illness to come forward can have detrimental effects both for the employees who are suffering and for the organization as a whole, says Michael Held, the chief executive officer and founder of LifeSpeak, a digital platform that offers employees around-the-clock-access to a wide range of topics related to total well-being. In the article ‘Technology To Improve Mental Health In Workplace’ at the Benefits and Pensions Monitor website, he says every week, 500 000 Canadians miss work due to mental illness. However, the great thing is most Canadians own a computer, smartphone, and/or tablet so offering access to quality mental health support on these devices increases the likelihood that they will use the programs their employers provide.
Workers Use New Skills To Handle Stress
Workplace stress is on the rise and American workers are actively addressing it by learning new skills, says a Udemy report. ‘Workplace Confidential: The Real Story Behind Stress, Skills, and Success in America’ found more than half (52 per cent) of full-time employees in America feel more stressed today than they did one year ago. Additionally, 58 per cent turn to company-sponsored skills training to combat this epidemic. U.S. workers are stressed all or most of the time at work because of the current political climate (50 per cent) and fear of losing jobs to artificial intelligence or new technology (43 per cent). They are looking to acquire new skills on their own time or through company-sponsored programs to de-stress and position themselves for long-term success. A significant segment (42 per cent) have even invested their own money in professional development. The top form of stress relief they use today is company-provided training and professional development programs (58 per cent), followed by meditation and/or physical activity (54 per cent).
Private Markets Acknowledge ESG
The private markets industry is increasingly acknowledging the importance of investing with environmental, social, and governance issues in mind, but the majority have difficulty translating these intentions into formal policy implementation, says a survey by Makena Capital Management. It found a key trend is that the managers with the most robust processes are in the highest risk areas, such as natural resources and private equity where the possibility to invest in ESG-averse opportunities such as oil and gas, mining, or gun manufacturers are the greatest risk areas. Another was that private markets managers are more likely to have established ESG practices than public managers, particularly in Europe. As well, it found a direct relationship between assets under management and the extent to which firms have dedicated resources for ESG practices. Often, larger firms are able to dedicate more resources to ESG due to their resources and long-term perspective. Meanwhile, a lot of smaller firms are run by younger leaders who see the inherent value of ESG, but don’t necessarily have the resources.
Benefits Alliance Enhances Website
The Benefits Alliance Group now has an enhanced, progressive website at http://www.benefitsalliance.ca/. This initiative will soon by coupled with an active social media presence. The Benefits Alliance is a national alliance of independent employee benefits advisors. It is comprised of 34 member firms with more than 150 advisors administering over 7,200 plans with $700 million of group insurance premium and over $3.1 billion in retirement plan assets.
Williamson Has New Role