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March 8, 2019


Physical Workers Retirement Confident

Physical workers are more likely than non-physical workers to say they are very/extremely confident (31 per cent versus 23 per cent) about achieving a comfortable retirement, says a report derived from the ‘2018 Aegon Retirement Readiness Survey.’ The report notes that physical workers are broadly positive about retirement, with 66 per cent associating this phase of life with positive terms such as leisure (38 per cent), freedom (34 per cent), and enjoyment (28 per cent). However, many also associate retirement with negative ideas such as ill health (20 per cent), poverty (14 per cent), and being tired (12 per cent). Overall, physical workers feel more ready for retirement than non-physical workers. This retirement confidence results in better engagement with retirement benefits. As well, “Working past age 65, which is traditionally considered retirement age in many countries, is uncommon among physical workers ‒ only five per cent are 65 or older,” it says.

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Single Payer System Necessary

When one million Canadians must choose between taking a needed medication or going without heat or food, the federal government must create a single payer system that covers everyone for the cost of medically necessary drugs, says the Registered Nurses’ Association of Ontario (RNAO). It says this is why a federal advisory panel must go further than the interim recommendations it made Tuesday that would neither create equitable access to medication nor tame drug costs whose growth is not sustainable. It agrees with the chair of the federal panel, Dr. Eric Hoskins, who, as Ontario’s health minister, said success with national pharmacare “will hinge not just on continuing the conversation, but political courage.” While the panel was right to ask the government to develop a national drug formulary, invest in technology needed to roll out pharmacare, and create an agency to negotiate drug prices and evaluate the effectiveness and cost-efficiency of drugs, these, while necessary, aren’t sufficient. The next steps, RNAO says, must be grounded in evidence that proves a public, single-payer system is more equitable and cost-effective than one that allows insurance companies to determine who is covered and who is not. That public system must create universal coverage of medically necessary drugs via a single-payer system without user fees or other costs to Canadians; implement full coverage immediately; tame drug costs by creating a national agency to negotiate prices and resist excessive patent protection; and ensure appropriate prescribing.

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RRSP Use Unchanged

The number of RRSP contributors in Canada was basically unchanged between 2013 and 2017, says Statistics Canada’s ‘Selected characteristics of tax filers with Registered Retirement Savings Plan (RRSP) contributions.’ In numeric terms, the number has hovered around 5.95 million reaching a high of 5.98 million in 2015. In percentage terms, 24 per cent of registered tax filers contributed to an RRSP in 2017 and 2016, up from 23 per cent the three previous years. Total RRSP contributions rose from $37.4 million in 2013 to $42 million in 2017 with a median contribution of $3,000 prior to 2017 and $3,030 that year.

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Indexes Need Closer Attention

An investor-focused trade group is calling on investors and U.S. regulators to pay closer attention to indexes. A report from Healthy Markets, an investor-focused non-profit organization whose members include several large public pension funds, says “while benchmark-linked investments have flourished across a wide range of assets, so too have their risks.” The U.S. regulatory framework “is ill-equipped to address the risks and conflicts of interest posed by benchmark-linked investing,” says ‘Benchmark-Linked Investments: Managing Risks and Conflicts of Interest.’ While investors might view benchmark-linked investing as a relatively easy way to gain unique financial exposures, they have not generally recognized that returns might be affected by conflicts of interest and insufficient data in markets where products “that have been manipulated are in the hundreds of trillions of dollars.” Benchmark-linked investment products can reduce complexity and transaction costs, but “also introduce significant risks for investors and the markets overall.” It calls on U.S. to not shy away from ensuring that financial products within their jurisdiction are linked to benchmarks that are consistent with basic standards designed to mitigate risks and conflicts of interest.

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Virtual Health Solution Offered

TELUS Health and Babylon are together launching ‘Babylon by TELUS Health,’ a future-forward virtual healthcare solution that promises to revolutionize how Canadians take control of their own health from the convenience of a smartphone. It will empower Canadians with access to healthcare support and information day and night. The app also improves the efficiency of communication with doctors to help drive better health outcomes for all Canadians. At launch, British Columbians will be the first to get access to the app’s one-on-one video consultation feature, allowing them to speak directly and privately with a BC-licensed family doctor. This video consultation will be covered by the patient’s BC provincial medical services plan. It can also be used to book an appointment with a doctor through the app in seconds; access doctor consultation notes and video consults for quick reference and/or sharing; manage prescription details and preferred pharmacy for easy prescription pick up; and get referrals for diagnostic tests or specialists when needed.

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Elections Have Potential Impact

Elections in Southeast and South Asia make 2019 a busy year with potential impacts for investors, says Sriyan Pietersz, an investment strategist at Matthews Asia who specializes in the ASEAN region. This year, there is a general election in Thailand, presidential and parliamentary elections in Indonesia, a parliamentary election in India, and mid-term elections in the Philippines, he says in ‘Four Key Elections in Asia to Watch.’ In Thailand, the election should support a transition back to a democratic regime that may return the country to a position of greater legitimacy among its global peers. In Indonesia, history will be made as presidential and legislative elections will be held for the first time on the same day setting in motion a complex process. The candidates are running on similar platforms of infrastructure spending and economic reforms aimed at improving the ease of doing business. In India, the general election presents investors with a challenging outlook as concerns are growing over the impact of a hung election or the prospects of policy gridlock under an extended and brittle coalition. There has been an increase in disposable income of lower income segments which is likely to drive consumption spending. In the Philippines, the overall impact of the midterm elections is likely to be positive, albeit limited compared to a presidential election. The primary effect is likely to be increased consumption due to election-related spending and additional liquidity in the financial system, he says.

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Data Transfers Brexit Worry

The issue of data transfers is one of the top three worries around Brexit for UK financial services firms, says a poll commissioned by the EY consultancy. It has warned that firms need to ensure they do not breach data rules in the event of a no-deal Brexit or risk a fine of up to four per cent of turnover or €20 million, whichever is the highest. A no-deal Brexit, the firm says, would mean personal data cannot be sent from the EU to the UK unless firms have taken specific mitigating action as the European Commission has said it would not provide immediate data adequacy for the UK in the event of a no-deal. EY is launching a guide for financial services firms around last minute preparation for a possible no-deal Brexit.

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OPTrust Adds Green Bonds

OPTrust has built on its existing Green Bond holdings with a $100 million investment in Ontario government Green Bonds. This brings its total Canadian Green Bond holdings to roughly one per cent of total assets under management. The government uses Green Bonds as a tool to help finance transit and energy efficiency projects. It is currently the largest issuer of Canadian dollar Green Bonds.

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Strategic Beta Provides Fine-tuning Exposures

Strategic beta products offer advisors the opportunity to fine-tune investment exposures. However, they require increasing intellectual capital to select amid an abundance of options, says research from Cerulli Associates. A key challenge for strategic beta strategies is the difficulty that advisors face in interpreting them. Cerulli believes that the increasing expertise required to understand the products, and key discrepancies in how they are positioned, hinder product use. It found only 21 per cent of advisors report using strategic beta products ‒ a smaller portion than would be expected given the wide availability and product development focus. “It is likely that the ambiguity about factors and what they are intended to accomplish is challenging strategic beta adoption,” says Daniil Shapiro, associate director at Cerulli. “In examining how issuers position strategic beta exchange traded funds (ETFs), it finds that 68 per cent of issuers often present the products as providing specific factor exposures, while 50 per cent state that they position the ETFs as generating alpha. Advisors, meanwhile, report using strategic beta products based on their desire for key outcomes, particularly downside risk protection and reducing portfolio volatility.” Almost three-quarters (71 per cent) of advisors report that not knowing whether the strategies are meant to produce alpha or outperform is a significant or moderate reason for not using them, while another 67 per cent state the same about lack of familiarity with the strategies.

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Gender Diversity Clear Issue

Gender diversity in private equity is becoming a more common topic, yet almost half of female respondents and a quarter of the men felt that there has been “little or no change,” says a survey by investment bank Investec and asset manager consultant MJ Hudson. Gender imbalance at the top of the industry is a clear issue, it says, with numerous causes cited for it. “There is now, however, a growing feeling among many that, fully cognizant of the long road ahead, the first steps are finally being taken,” it says.

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Canadian ETF Inflows Increase

Canadian ETFs had net inflows of $1.3 billion in February, a monthly increase of 0.8 per cent led by international equity and fixed income, says a National Bank report. International equity ETFs had flows for the month of $639 million, with both emerging market and developed market equities enjoying sizable inflows. Fixed income ETFs had flows of $467 million. In contrast, Canadian equity ETFs suffered an outflow of $390 million, led by broad-based financial and energy sector ETFs. Year-to-date by sector, defensives such as utilities, real estate, and healthcare have attracted assets, while cyclicals such as financials have seen withdrawals. For the month of February, seven firms introduced 23 ETFs, bringing the number of ETFs in Canada to 813.

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Emerging Market Investment Hits Record Levels

Private capital fundraising and investment in emerging markets reached record levels in 2018, says a report by EMPEA. Global investor interest in emerging Asia accounted for much of the increase, while private capital opportunities in Latin America and Africa improved, it says. Overall, private capital vehicles in all emerging markets raised $90 billion and invested a disclosed $70 billion. That represents year-over-year increases of 39 per cent and 27 per cent, respectively. Nearly half of the $70 billion in investments were in consumer discretionary, consumer staples, and healthcare sectors. Of the $90 billion raised worldwide, China accounted for $35 billion, driven by investor interest in Chinese technology-enabled, consumer-oriented businesses. Capital raised increased 92 per cent for Latin America and 22 per cent for Africa.

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Eolia Acquisition Completed

The Alberta Investment Management Corporation (AIMCo) has completed the acquisition of over 90 per cent ownership in Eolia Renovables de Inversiones, S.C.R., S.A (Eolia) from funds managed by Oaktree Capital Management, L.P., a global alternative investment management firm, and other minority shareholders. Eolia is a leading independent power producer in the Spanish renewable energy sector, engaged in the development, construction, and operation of wind farms and solar photovoltaic plants. The company currently manages a 669 MW portfolio of renewable energy assets with long-term contracted revenues under the Spanish renewables regulatory regime and has a pipeline of development opportunities in Spain.

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Hensley Joins IMCO

Christian Hensley is senior managing director, public equities and credit, at the Investment Management Corporation of Ontario (IMCO) effective April 9. He is a former executive with the Canada Pension Plan Investment Board (CPPIB), most recently as managing director and head of relationship investments. Prior to this, he spent 11 years in the private equity and growth capital industry at Charterhouse Group and Planier Capital.

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Session Looks At Case Management and Pain

‘Navigating Pre Authorization Criteria and Patient Support Through Case Management and Access Programs’ and ‘Pain Management in Benefit Plans: The Market, The Problems and The Solutions’ will be discussed at the next Benefits Breakfast Club session. A panel will explore pre authorization criteria and how patient support (PSP) and access programs work. As well, developments in effective pain management will be discussed. It takes place March 28 in Burlington, ON. For information, visit BBC

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March 7, 2019


National Drug Agency Proposed

A national drug agency to oversee national pharmacare would be created if recommendations from the Advisory Council on the Implementation of National Pharmacare are adopted. Its interim report also calls for a national formulary to harmonize coverage across Canada and investment in data on prescription drugs and information technology systems. “Canadians should not have to choose between paying for prescription drugs and putting food on the table,” says Ginette Petitpas Taylor, the federal health minister, and the government is committed to exploring a national pharmacare plan that leaves no Canadian behind. The National Institute on Ageing (NIA) says these recommendations are a solid first step to finally getting Canadians much-needed pharmacare. The three recommendations lay the groundwork for the ultimate plan expected to be announced in June. A national formulary is critical to ensuring that all Canadians have access to a common list of drugs at a common price, it says, and a national agency will be required to co-ordinate amongst provinces which is not possible without a robust data system. The Canadian Life and Health Insurance Association welcomes the interim report. It “is an important contribution to the current discussions on how to ensure access to affordable prescription medicines for all Canadians,” says Stephen Frank, its president and CEO. “Prescription drug reform requires a collaborative effort among insurers, provincial, and territorial governments and the federal government with improvements that ensure all Canadians can access affordable prescription medicines “no matter where they live and work in Canada.” In its submission to the council, the life and health insurance industry called for drug coverage for everyone, the protection of private health benefit plans, affordability for consumers and taxpayers. However, a federal drug agency and limited list of prescription medications alone will not ensure universal access to pharmacare, says Unifor, Canada’s largest union in the private sector, representing 315,000 workers in every major area of the economy. “Canadians need transformative change to address the critical issues of an ageing population and to guarantee the access, value, safety, and, above all, the public ownership of health services,” says Jerry Dias, Unifor national president. “The majority of these evolving issues can be addressed through a universal pharmacare plan.” The union says Canada is the only developed nation in the world with a universal healthcare program that does not include a universal prescription drug plan. Instead, its patchwork of providers has resulted in the second highest drug costs globally, right behind the United States. The final report on pharmacare is due this spring.

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Aon Ends Willis Watson Towers Pursuit

Aon plc does not intend to pursue the acquisition of Willis Towers Watson. It was required to issue a statement after reports of its interest in Willis Towers Watson, an Irish company which is subject to Irish regulatory requirements. As a result of media speculation, those regulations required Aon to make the disclosure at a very early stage in the consideration of a potential all-share business combination. It says that consistent with its stated focus on return on invested capital, the firm regularly evaluates a variety of potential opportunities within and adjacent to its industry. Aon had considered such a possibility with regard to Willis Towers Watson.

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PRI Addresses Fundamental Legal Questions

The Principles for Responsible Investment (PRI) has launched a project to address ‘fundamental legal questions’ surrounding the consideration of investing activity’s impact on sustainability. It is collaborating with the United Nations Environment Programme Finance Initiative (UNEP FI) and the Generation Foundation on ‘A Legal Framework for Impact’ project. The organizations say assessing and accounting for the sustainability impact of investment decisions needs to become a core part of investment activity within the next decade. The project will involve preparing and publishing legal analysis as well as practical recommendations for investors seeking to make “sustainability impact” a core part of their activity. The PRI says investors are increasingly considering “impact duties” such as decarbonization targets, gender equality, or the impact of their investments on wider society. However, there are fundamental legal questions including whether investors are legally required to integrate the sustainability impact of their investment activity in their decision-making processes or whether there are any legal impediments to investors adopting “impact targets.”

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Minor Changes Could Remove Comprehension Barriers

Barriers to comprehension of financial information do exist. However, relatively minor changes to language and graphics can have a significant and positive effect on investor understanding and confidence, says Paul Bourque, president and CEO of the Investment Funds Institute of Canada (IFIC). Testing for its study with BEworks ‒ ‘Behavioural Economics Applied to Enhance Disclosure Practices and Investor Outcomes’ ‒ shows the enhanced statements were more effective at conveying complex information than control statements and also led to a higher subjective understanding and were read more thoroughly than the control statement. Enhanced statements with goal-framing also proved effective in having investors state a willingness to increase future savings. However, in an unexpected finding, the control statement was more effective at conveying basic information.

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Accident Victim Learned Self-advocacy

Andrew Lawlor, creative director at Livewire Communications, grew up thinking that if doctors or nurses told you to do something, you did it ‒ an attitude which might be the result of Canada’s universal healthcare system. However, his life changed forever after a speeding car collided with his motorcycle costing him his leg, an eye, the full use of one hand, and more than 40 broken bones. Speaking at the Canadian Group Insurance Brokers’ ‘Humans Behind the Claims,’ he said one lesson he learned is self-advocacy. Patients just can’t accept what they are told. They need to learn to ask questions, make their own recommendations, and advocate for themselves. He also learned that Canada’s healthcare system isn’t free as many believe. If he had not had a good employee benefits program, he would have faced, for example, a $123,000 prosthetic for the leg he lost. He said he was lucky as his accident was declared catastrophic right from the start so the police investigated it more thoroughly. He said the system is good because everything works as it should and he was provided with everything he needed, albeit maybe not as quickly as he hoped. He also cautions he was like many other Canadians and didn’t pay enough attention to benefits seminars at work or filling out forms. He didn’t pay close attention until he needed it. Advisors have an important role to play, says Bill Zolis, a senior employee benefits consultant, at Penmore Callery Group. They need to be where they are needed and often have to be a bridge between LTD administrators and insurance companies who often don’t see the people behind the claims, just the contract with the employer or a brief medical opinion. They also need to tell members of group plans what can happen if they don’t have LTD or life insurance. Many employees just don’t see the need unless the “hearse is backed up to door.”

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Strategic Income Funds New Era

Strategic income funds are a new era for fixed income investing, says Stephen Kearns, managing director at Guardian Capital. Speaking at Alternative IQ’s ‘CHFA Winners Showcase Investor Conference,’ he said for the last 35-plus years fixed income investors have seen falling yields and rising risk. Currently, interest rates are low, although unlikely to get lower, making it hard to deliver inflation adjusted returns. As well, the average duration for bonds is really extended meaning the average investor is taking a lot of risk in traditional core funds without a lot of return. These strategic funds address the current low return/high risk environment for income seeking investors. They are income focused and not mandated to own any specific sector. As well, uncorrelated strategies are used to enhance return and reduce volatility. Bryan Nunnelley, managing director of Crystalline Management, said they are getting questions from investors about what to do as the current market cycle is getting long in the tooth. They are looking for true diversification by adding uncorrelated and low volume strategies which arbitrage funds can provide as they offer almost complete elimination of market risk and most of company specific risk.

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AI Used As Anti-fraud Tool

Green Shield Canada (GSC) and HBM+ (its health benefit management solutions provider division) are staying a step ahead of health benefits fraud with a multi-layered strategy centred on artificial intelligence (AI) and housed under its ‘Claim Watch’ banner. While today’s range of claims data ‒ which comes in a huge volume in all forms and from all directions ‒ can be extremely time-consuming to analyze, the new AI platform not only finds and compiles data at tremendous speeds, but also identifies patterns and less obvious outliers at a deep enough level to unearth suspicious activity earlier than in the past. Brent Allen, GSC’s vice-president of service operations, says “In the past, preventing and detecting fraud involved manual processes … essentially the focus was on following a paper trail. We were trying to find a needle in a haystack. Fast forward to today and our AI platform is a game-changer in bringing together all our data on claims, health providers, and plan members to form instant insights. The richness of our data is a true differentiator in our industry and that haystack quickly becomes less daunting with an AI-powered microscope.” The AI platform is just a part of ‘Claim Watch.’ All claims are paid on the Advantage system so data flows through a single system (and established claims management policies) to the AI platform without being outsourced. A provider registry ensures that the applicable credentials and licences are in place for any provider submitting claims online via the providerConnect portal.

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Use, Don’t Fear, Technology

Despite the fears of technology replacing humanity, group insurance advisors should use it and not be afraid of it, says Dave Patriarche, owner of Mainstay Insurance and head of the Canadian Group Insurance Brokers. Speaking at its ‘Humans Behind the Claims’ session, he said there is a lot of talk about replacing people, but consumers do not want to, for example, use technology to replace their financial advisors. However, he said advisors do need to do a better job of connecting with their clients. They can do this by looking past the technical aspects of their business and remember it is about telling stories to explain how benefits programs work and to educate. While there is concern over whether the future will be bright or bleak, what gives him hope is the great relationships he has seen in the industry. These don’t change because of consolidations or acquisitions because it is not about size or the products sold, it is about the people and the passion they have for their clients. In fact, he said one of the downfalls of consolidation is that larger corporations often start culling their clients, getting rid of those that are too small or high maintenance. For advisors, this means they can focus on building their businesses one client at a time.

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Pension Reduction Prompts Class Action

A class action has been filed in the state of Indiana against the U.S. Social Security Administration claiming that a reduction of U.S. retirement and disability payments for those collecting benefits from Canada as well is unlawful. Dwight D. Dee, of Miller Thomson LLP, says persons who have lived and worked for extended periods of time in both Canada and the United States can often be eligible to receive benefits under both government pension programs. As an administrative practice, however, the U.S. Social Security Administration has reduced U.S. payments to such persons on the basis that they also receive benefits under the Canadian pension system. The heart of the issue is whether the reduction of U.S. pension and disability benefits to individuals who also receive the same benefits in Canada is lawful. Generally, the plaintiffs argue that the wording in the U.S. Social Security Act specifies that employment or self-employment benefits are not to be subject to reduction for citizens or residents of countries with which the United States has social security agreements. The services of persons who worked in both countries and contributed to both countries’ social systems are recognized as equivalent to employment paid work in either country and should be exempt. They also claim that the Canada Pension Plan and the Quebec Pension Plan are based on earnings and residence and are of general application, therefore they should be excluded from any reduction. Canada and Quebec do not apply the same deduction to those receiving both Canadian and U.S. retirement benefits.

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Venture Supports Women-led Businesses

Scotiabank and Disruption Ventures have announced a partnership that will provide women with support to take their business to the next level and CI Financial Corp. has made a $2 million investment in Disruption Ventures I Limited Partnership, a venture capital fund that finances businesses founded or led by women. “Research shows that women-led businesses are highly productive, yet face many obstacles in getting funded,” says Sheila Murray, president of CI. ” By investing in female entrepreneurs, we are proudly supporting an overlooked yet dynamic group and helping to foster an innovative and prosperous Canadian economy.” The Scotiabank partnership is part of its omen initiative, which helps women with access to capital, support from senior business leaders, and education tailored to their needs. Scotiabank has committed capital to Disruption Ventures and will assist with marketing initiatives, drive awareness of the partnership, and offer educational content to support women entrepreneurs. Disruption Ventures will proceed with making initial investments and continue to fundraise to reach its objective in 2019, at which point it will be the largest private, independent, and women-only fund in Canada. Only two per cent of venture capital dollars in the U.S. were allocated to female-founded companies in 2017. However, a study by Boston Consulting Group that year found that women-founded start-ups generated 78 cents in revenue for every dollar of funding, versus 31 cents for those founded by men.

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CIT Target Date Solution Assets Grow

Mutual fund and collective investment trust (CIT) target date solutions reached $1.77 trillion in assets at the end of 2018, a 1.1 per cent increase from $1.75 trillion the year before, says Sway Research. CIT-based solutions began the year with $638 billion and grew by 6.1 per cent to reach $677 billion. Mutual fund-based solutions, on the other hand, declined by 1.9 per cent, from $1.11 trillion to $1.09 trillion. Poor stock market returns in 2018 and ongoing movement among plan sponsors away from higher-cost mutual fund target date solutions to lower-cost CITs is part of the reason for the growth. Target date series that invest in passively managed underlying funds reached 53.3 per cent of target date solutions, up from 51.2 per cent in 2017 and 47 per cent in 2015. Those series that invest in actively managed underlying funds saw their market share fall to 38 per cent, down from 41.7 per cent in 2017 and 46.1 per cent in 2015. Hybrid target date series that invest in both actively and passively managed funds saw their market share rise to 8.6 per cent, up from 7.2 per cent the year prior and seven per cent in 2015.

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Fund Using Developing World Strategy

Artisan Partners is offering an Ireland-domiciled UCITS thematic fund managed in line with its developing world strategy to institutional investors in Canada on a private placement basis. The strategy was started July 1, 2015, and had $1,993 million in assets under management as of December 31, 2018. The developing world fund is the third strategy added to its UCITS complex in the last 12 months and the eighth fund overall. The developing world fund is a high value-added strategy in an asset class that allows active managers to differentiate themselves. Artisan manages $96.2 billion in assets under management including $1.8 billion in Canada across separate account and pooled fund mandates.

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Toupin Joins Morneau Shepell

Philippe Toupin is vice-president, retirement solutions at Morneau Shepell. Based in Ottawa, ON, he will be responsible for a portfolio of clients and growth opportunities in this region. Prior to this, he held several senior roles, including vice-president, development, at Optimum Holdings, vice-president roles at Manulife and Standard Life, and senior consulting roles at another large actuarial consulting firm.

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Canadian Benefits Introduced

The International Foundation of Employee Benefit Plans’ ‘Certificate in Canadian Benefit Plans’ provides an introduction to Canadian employee benefits, pensions, and human resource practices for those working directly with a Canadian plan or are employed by a U.S. company with affiliates in Canada. Sessions will look at Canadian drug benefit practices, the Canadian retirement system, and compensation and HR practices It takes place June 10 to 12 in Chicago, IL. For information, visit Canadian Benefits

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March 6, 2019


Wellbeing Replaces Wellness

The new social contract with employees calls for investment in people to attract and retain them and employees who see the value of and “buy-in” to the offer, says Ruth Hunt, principal, engagement practice and global wellbeing survey lead at Buck. This results in more holistically healthy and engaged employees and enhanced employee commitment and output which results in greater business results, she said at its ‘Global Survey of Workplace Wellbeing’ session. The top wellbeing priorities of employers do differ around the world. However, the common denominator is stress. Across the globe it ranks as a leading concern and research has shown that stress has downstream impacts as it increases the risk of heart conditions, strokes, high blood pressure, and arthritis. As well, financially stressed employees spend three or more hours each week distracted. She said the focus is changing from wellness ‒ which conjures up images of fun runs and t-shirts ‒ to wellbeing which is “not your grandfather’s wellness,” she said. Wellbeing requires employers to address the physical and financial needs of employees. It is based on a value proposition that places a culture of wellbeing as a top aspiration and uses technology like predictive analytics to identify issues earlier. And while it should be measured, only 50 per of organizations measure the return on investment in wellbeing. Yet, the value of investment seems intuitive for many, said Hunt.

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UK Regulator Targets Dividends

The UK’s Pensions Regulator is promising a much firmer stance on the ratio of dividend payments to defined benefit scheme contributions. In its annual funding statement, it says weaker employers should pay more into their schemes than to shareholders, while companies that are unable to support their schemes should not be paying dividends at all. If a company pays dividends greater than the amount paid to its pension scheme, the regulator says it would “expect a strong funding target” and a short deficit recovery period.

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Fill-the-gaps Pharmacare Approach Most Prudent

In advance of the federal government’s Advisory Council on the Implementation of National Pharmacare releasing its final report this spring, an increasingly prevalent view is that program reform should use a fill-the-gaps approach to universal coverage, rather than a first-payer approach, says a Telus Health ‘Benefits Hub.’ One strong indication comes from the House of Commons Standing Committee on Finance which has released its annual report of pre-budget recommendations. ‘Cultivating Competitiveness: Helping Canadians Succeed’ advises the federal government to allocate funding to “Build on the existing drug coverage enjoyed by millions of Canadians and follow a close-the-gap approach to pharmacare to ensure that all Canadians have access to prescription drug coverage, in addition to examining ways to provide catastrophic drug coverage to Canadians.” Moreover, the committee’s recommendation this year indicates a change in mindset when compared to last year’s pre-budget recommendation, which leaned toward a first-payer model. At that time, the committee suggested that the federal government “work with the provinces/territories to introduce a pan-Canadian prescription drug program.” Vishal Ravikanti, manager, pharmacy consulting for health benefits and payment solutions, at TELUS Health, agrees that a fill-the-gaps approach would be the most prudent course should a national pharmacare agenda take sustainable root. “A fill-the-gaps approach would be much easier to navigate and much more cost-effective for the public payer,” he says.

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WSIB Has Cannabis Framework

The Ontario Workplace Safety and Insurance Board (WSIB) now has a framework for entitlement to and approval of medical cannabis, says an Eckler ‘GroupNews.’ Until now, the WSIB has been handling medical cannabis coverage on a case-by-case basis. The policy, which came into effect March 1, sets out the five conditions for entitlement to medical cannabis. They are neuropathic pain; spasticity resulting from a spinal cord injury; chemotherapy-induced nausea and vomiting; loss of appetite associated with HIV or AIDS; and pain and other symptoms in palliative care. In addition to these conditions, the WSIB will consider entitlement to medical cannabis if the worker has previously tried conventional treatments for his/her condition; has received a clinical assessment for medical cannabis treatment; and if benefits of medical cannabis treatment outweigh the risks. The WSIB will review the policy within two years and adapt it to any significant changes in the clinical cannabis environment. Eckler says this policy may lead to more claimants being approved for medical cannabis coverage under the WSIB. The impact on each employer will depend on its claims experience and rate group, as well as whether it is a Schedule 1 employer (which operates under the WSIB’s collective liability insurance principles) or a Schedule 2 employer (which is individually responsible for the full cost of accident claims filed by its workers).

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Turbulent Conditions Drive ETF Growth

Allocations to exchange traded funds (ETFs) by European institutions currently investing in them increased by 50 per cent in 2018, totaling 15 per cent of total assets among the 127 institutional ETF investors, says Greenwich Associates ‘2018 European Exchange-Traded Funds Study.’ ‘In Turbulent Times, European Institutions Turn to ETFs’ says growth was driven in large part by volatility as European institutions in 2018 repositioned their portfolios for a turbulent investment environment centred on possible ECB rate hikes and a host of geopolitical risks. As well, their search for low-cost beta continued as assets were shifted from active management to index strategies last year. This shift increased asset flows into ETFs, the preferred vehicle for index exposures for 84 per cent of study participants. Finally, European institutions are integrating environmental, social, and governance (ESG) standards into their investment process and are using ETFs as their vehicle of choice for ESG exposures. “Our data suggests that last year’s robust growth in ETF investments by European institutions occurred not in spite of the turbulent conditions, but because of them,” says Andrew McCollum Greenwich Associates managing director and author of the study. (A roundtable discussion between industry experts on ETFs in Canada today will be featured in the April issue of Benefits and Pensions Monitor. For information, contact Mike Hughes at 416-494-1066 or mhughes@powershift.ca)

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Factors Show Stark Mismatch

Factors used in investment practice show a stark mismatch with factors that have been documented by financial economists, says a study from Scientific Beta highlighting the dangers of not adhering to academic consensus when it comes to factor investing. ‘The Risks of Deviating from Academically Validated Factors’ says commercial factors are based on complex composite definitions that offer maximum flexibility. Providers use this flexibility to seek out the factors with the highest performance in a given dataset. However, such practice allows spurious factors to be found. Spurious factors work well in a small dataset, but will be useless in reality, it says. Therefore, many factors that appear in popular investment products and analytic tools are likely false. And while many providers claim their factors are grounded in academic research, the factor definitions should have been used and validated across different independent studies and a risk-based explanation should support the existence of the factor. Without these assurances, there is no reason to assume the persistence of the factor.

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More Green Capital Needed

While 17 per cent of current investment by large public corporations is already green, there’s an urgent need to mobilize even more capital to help build a lower-carbon and more sustainable economy, says a report by Corporate Knights Research and the Climate Bonds Initiative. It says while less than five per cent of 2017 corporate green investments were financed via certified green bonds, they have the potential to play a much larger role. “It’s heartening to know that so much of global corporate capital flows already support carbon reductions and a cleaner and more circular economy,” says Toby Heaps, CEO of Corporate Knights. “And it’s not surprising, since the green economy is growing much faster than the regular economy, we’re still falling far short of the green investment needed to put the global economy on track to meet the UN Sustainable Development Goals.” To reach ‘SDG alignment’ which must include urgent action to combat climate change, it estimates that total corporate capex and R&D spending needs to be boosted from $3.6 trillion to $3.8 trillion annually, while the green component of that investment needs to rise from $611 billion (17 per cent of the total) to about $1.07 trillion (28 per cent of the total). Over 87 per cent ($399 billion) of the additional annual green investments required arise in the most transition-exposed sectors (energy, utilities, automotive, steel, and cement). While large, the incremental investment requirement identified in the report is modest in proportion to the estimated $117 trillion in assets under management and loan books held via publicly traded financial corporations.

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Income Volatility Linked To Financial Knowledge

Income volatility is linked to lower levels of financial knowledge and capability, often leading people to conclude that they have no personal control of their fiscal situation, says research from the Chartered Professional Accountants of Canada (CPA Canada). While the link is intuitive, prior to this study, there was little research into the prevalence of income volatility in Canada and its correlation to financial behaviours, it says. ‘The Perils of Living Paycheque to Paycheque: The Relationship Between Income Volatility and Financial Insecurity’ shows more than a third of Canadians report volatility in their monthly incomes, whether it’s the source of the money, the amount they’ll be receiving, or both. It also shows that those precarious and uncertain income flows put people at greater risk of financial calamity and make it harder to effectively use common mitigating strategies like budgeting and saving. Income volatility is not new. Some of the oldest occupations, such as fishing or farming, traditionally have unpredictable earnings and widely differing income flows throughout the year. However, workplace shifts towards short-term, task-oriented employment – the ‘gig’ economy – make it increasingly hard for many people to know where their next paycheque is coming from and how much that payday will bring. The study shows people with volatile incomes have trouble keeping track of money and planning ahead, making it more difficult to make ends meet than for people who, while they may have lower incomes, know what they are getting and when. It suggests public policy planners, financial institutions, and those engaged in financial literacy education will need to develop new creative approaches to help assist those facing unstable incomes flows.

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‘Liquid Alts’ Fastest Growing

Liquid open-ended alternative funds have become the fastest growing asset classes in the UK and European-domiciled cross-border fund market since the 2008 global financial crisis, says Morningstar’s ‘Cross-Border Liquid Alternative Fund Landscape 2019’ study. It shows that the number of such funds, known in the trade as ‘liquid alts,’ has risen by 76 per cent over the last 10 years to 2,663. Assets in such funds increased tenfold over the decade to €420 billion. The report also found that European cross-border investors’ demand for alternatives now exceeds interest found in the U.S. mutual fund market, where investors’ regard for the asset class started to diminish in 2016 because of the lacklustre performance of alternative products as well as rising interest rates in the U.S. which allowed investors to get a more decent yield from bonds. Fees remain the main factor hampering the appeal of liquid alternatives as they directly eat into investors’ performance to dramatic levels as a percentage of net returns.

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Caisse Invests In Edelweiss Arm

Edelweiss Group says the CDPQ Private Equity Asia Pte. Ltd., a wholly owned subsidiary of the Caisse de dépôt et placement du Québec, has signed an agreement to invest in Edelweiss Financial Services’ non-banking financial company arm, ECL Finance Ltd. The planned investment by CDPQ would contribute towards establishing a large and diversified credit platform in India. The agreement with the Caisse will enable ECL to capitalize on opportunities in the credit market and confirm the capability of the group to capture opportunities in the non-banking financial company space. The Edelweiss Group is a diversified financial services company providing financial products and services to a corporations, institutions, and individuals in India.

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Brown Leads LAPP

Christopher A. Brown is president and chief executive officer at the LAPP Corporation. He was previously president and chief executive officer of its predecessor organization, the Local Authorities Pension Plan (LAPP). Prior to that, he was a partner at Blake Cassels Graydon.

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Social Impact Bonds Explored

‘The Invisible Heart – A Documentary About Social Impact Bonds’ is being offered by the ‘Social Entrepreneurship Experts Speaker Series at Rotman.’ It will feature a screening of the documentary and a fireside chat with Nadine Pequeneza, the founder and president of HitPlay Productions and director, writer and producer of the documentary. Set in Canada, the U.S., and the UK, it  examines social impact bonds, a marriage between government services and private sector investments which attempts to solve problems ranging from crime to homelessness. It takes place March 13 in Toronto, ON. For information, visit Invisible Heart

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March 5, 2019


Benefits Fraud Focus Of Month

Each year, insurance companies lose hundreds of millions of dollars to fraudulent health and dental claims, says the Canadian Life and Health Insurance Association (CLHIA). This fraud costs all Canadians through higher premiums, but can also result in serious criminal consequences. As part of ‘Fraud Prevention Month’ this March, the life and health insurance industry is supporting Canadians in the fight against workplace benefits fraud. It is raising consumer education and awareness around health and dental benefits fraud through the ‘Fraud=Fraud’ campaign. The goal is to help Canadians recognize fraud, understand how to avoid becoming involved in fraudulent activities, and increase awareness that fraud is a crime with real consequences. Benefits fraud occurs when an individual intentionally submits false or misleading information about the health or dental benefits they received under their employer’s benefit plan. “Benefits fraud is becoming more widespread, in part because, as we’ve found in our research, many don’t understand that it is a crime,” says Stephen Frank, president and CEO of the CLHIA. “Most people think, if you are caught, you would just repay the money. In fact, the consequences are bigger than that and can include the loss of your job and, in some cases, ending up with a criminal record and jail time.” A survey conducted by Environics Research for the CLHIA found 75 per cent of Canadians incorrectly believe that the only punishment for benefits fraud is having to pay higher premiums or be forced to reimburse claim payments. Resources to identify and report benefits fraud are available at Fraud=Fraud.

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Fragility Determines Planning

There are dramatic differences when it comes to retirement planning behaviour by levels of financial fragility, says a report from the Society of Actuaries (SOA). ‘Aging and Retirement: Financial Fragility Across the Generations’ defines financial fragility as vulnerability to a financial crisis and having a negative outlook of personal finances. Those with high fragility are much more likely to have short planning horizons and to prioritize everyday bills over retirement or emergency savings. Debt, especially credit card debt, is a major barrier, with 94 per cent of those with high fragility holding some form of debt and 56 per cent reporting credit card debt. Six in 10 of those with high fragility can only plan paycheck to paycheck, while this is only the case for 20 per cent with moderate fragility and just five per cent of those with low fragility. On the other end of the planning spectrum, only six per cent with high fragility plan for the rest of their lives compared to 10 per cent of those with moderate fragility and 29 per cent of those with low fragility. While almost all of those with high fragility are prioritizing being able to afford everyday bills, those with low fragility are prioritizing saving for the future, including for retirement (67 per cent).

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U.S. Institutions Global Leaders In ETF Use

U.S. institutional investors are the global leaders when it comes to exchange-traded fund (ETF) investing, says Greenwich Associates. Its ‘ETFs: U.S. Institutions’ New Tool of Choice for Portfolio Construction’ shows institutional investments in ETFs increased significantly in the United States in 2018. Average allocations by institutions currently investing in ETFs jumped to 24.8 per cent of total assets, up from 18.5 per cent in 2017. This percentage tops allocations among institutions in Canada, Europe, Asia, and Latin America. Last year’s strong growth was actually driven in large part by a confluence of events ranging from interest-rate hikes and fears of recession to trade wars and Brexit which had institutions laser-focused on risk management in 2018, it says. As they repositioned their portfolios to address these risks, many U.S. institutions used ETFs to implement specific changes. Study participants say they chose ETFs for an ease of use that allowed them to quickly and seamlessly integrate new exposures into strategies across portfolios and asset classes. As well, they continued shifting assets from active management to index strategies and they continue to expand the list of portfolio functions in which they are applying ETFs. The spread of ETFs is being fueled in large part by versatility that allows them to serve a broad range of strategic and tactical purposes and by their role as institutions’ preferred vehicle for factor-based/smart beta and other specialized exposures. (A roundtable discussion between industry experts on ETFs in Canada today will be featured in the April issue of Benefits and Pensions Monitor. For information, contact Mike Hughes at 416-494-1066 or mhughes@powershift.ca)

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MEPP Funded Status Decreases

The funded status of the Segal Group’s model multi-employer pension plan (MEPP) decreased by seven percentage points to 95 per cent during the fourth quarter of 2018. Over the quarter, assets decreased four per cent and liabilities increased three per cent. “The Canadian equity market continued to decline during the quarter,” says Ruo Tan, president of Segal Rogerscasey Canada. “The U.S. equity market also had a negative quarter and international equity markets had a poor result as well.” The benchmark discount rate used to develop MEPP liabilities decreased by approximately 11 basis points in the quarter.

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Buffett Looks At Drag On Returns

Warren Buffett thinks pension funds and endowments should cut out consultants, outside managers, and others he deems a drag on returns. In his Berkshire Hathaway annual letter, he says he bought his first stock 77 years ago: three shares of Cities Service for $114.75. “If my $114.75 had been invested in a no-fee S&P 500 index fund, and all dividends had been reinvested, my stake would have grown to be worth (pre-taxes) $606,811 on January 31, 2019,” he says. “That is a gain of 5,288 for 1.” A $1 million investment by a tax-free institution such as a pension fund or college endowment would have grown to “about $5.3 billion.” However, if that hypothetical institution had paid only one per cent of assets annually to various ‘helpers,’ such as investment managers and consultants, its gain would have been cut in half, to $2.65 billion. Management fees is an issue that institutions are regularly grappling with, he says, as many money managers will either underperform the S&P or match it by investing in index funds.

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Tenure In Workplaces Falls

The percentage of U.S. wage and salary workers ages 20 or older that had one year or less of tenure with their current employer increased from 17.4 per cent in 2010 to 20.5 per cent in 2018, says EBRI’s ‘Trends in Employee Tenure, 1983-2018.’ It says the median tenure of all wage and salary workers ages 25 or older fell from 5.5 years in 2014 to five years in 2018, a time period in which the unemployment rate reached historical lows. “The labour market has a strong impact on median tenure and the distribution of the amount of tenure workers have at a particular point in time,” says Craig Copeland, a senior research associate at EBRI and author of the study. “During a strong labour market, median tenure tends to decrease as new hires increase. In a weaker market, median tenure moves upward as there are fewer new hires and workers remain at their jobs as other opportunities are less available.”

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Regulatory Burden Existential Concern

Regulatory burden represents an existential concern for many of the Portfolio Management Association of Canada (PMAC) member firms who collectively manage assets in excess of $1.8 trillion for private and institutional client portfolios. Its industry, regulation, and tax committee, in a submission to the Ontario Securities Commission (OSC) to assist in the formulation of priorities for the OSC’s regulatory burden reduction taskforce, says ultimately, higher regulatory burden and compliance costs facing portfolio managers have a negative impact on their end investors as well as on Canadian capital markets.

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Unlisted Natural Resources Market Grows

The unlisted natural resources market has grown tremendously over the past decade as the ecosystem of fund managers and investors has expanded, says the ‘2019 Preqin Global Natural Resources Report.’ Assets under management have grown rapidly, rising from $175 billion at the end of 2009 to $668 billion as at June 2018. The industry has the potential to grow further in the coming years and while energy funds currently dominate activity, other strategies offer investors non-correlated returns and portfolio diversification – the primary reasons that most investors cite as advantages of natural resources funds.

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Bravura Contract Extended

Bravura Solutions’ contract with global third-party administrator, JPMorgan Chase & Co., has been renewed for an additional five years. J.P. Morgan will continue to work with Bravura to provide transfer agency services via the GFAS platform and automated end-to-end STP messaging support through Bravura’s Babel system. GFAS is a multi-jurisdictional and multi-currency global platform that supports the administration of both offshore and onshore funds. Extending its existing 20-year transfer agency partnership, J.P. Morgan will continue to use GFAS as its core transfer agency platform to support third-party funds administration operations in Luxembourg and Dublin. Bravura Solutions Limited is a provider of software solutions for the wealth management, life insurance, and funds administration industries.

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Taylor Joins TRG

Brenda Taylor is a client representative, employee benefits, at TRG Group, a division of Hub International. Previously, she was a sales consultant, group life and health, for RBC Insurance and an account executive, business development ‒ BC, group retirement savings, at Desjardins Financial Security.

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Aging Workforce Risks Examined

‘Managing your organization: potential risks and solutions for an aging workforce’ will be the topic of a CPBI Ontario Signature Series. It will feature panels on retiree benefits in the face of escalating costs and changing priorities and on the challenges faced by pension plan administrators and sponsors in communicating with an aging workforce. Panelists are Rachel Arbour, assistant vice-president, plan services at the Healthcare of Ontario Pension Plan (HOOPP); Hatem Belhi, director, pension, payroll, and employee benefits at the city of Toronto; Janice Holman, a principal at Eckler; Holly Reid, a partner at Blakes; and Sherry Shaw, vice-president, benefits and health, at Accompass. It takes place April 9 in Toronto, ON. For information, visit Aging Workforce

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March 4, 2019


Quebec Groups Want Universal Drug Plan

Several Québec labour and civil society organizations are urging the federal government to implement a real public, universal drug insurance plan. The groups ‒ FTQ, CSN, CSQ, APTS, TRPOCB, FIQ, and the Union des consommateurs ‒ say Ottawa would be making a mistake by wanting to reproduce the hybrid model in Québec, where the existence of private and public insurance plans has caused spiralling costs and profound inequities. The public drug insurance plan set up by the Québec government is only accessible to citizens without access to a group insurance plan at work and the co-existence of a public plan among several private plans deprives the province of a bargaining tool with the pharmaceutical companies. It says studies show that the implementation of a drug plan that is completely public and universal can lower the cost of medications by 20 to 40 per cent. This can represent savings in the range of $1 to $3 billion for all of society, just in Québec. While median expenditures in medications per resident is $603 for the OECD countries, the expenditures per resident for medications in Québec are $1,087, pointed out the organizations.

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Great-West Expands Cannabis Coverage

Great-West Life has expanded its coverage of medical cannabis to include an agreement with Shoppers Drug Mart Inc. to deliver its medical cannabis coaching program. Its optional medical cannabis coverage is part of its pay-direct drug plans which represent the vast majority of its drug plans. Bobby Currie, pharmacist and manager of drug strategy for Great-West Life, says the insurer has offered medical cannabis coverage through healthcare spending accounts since 2009. Since medical cannabis is not available in retail pharmacies, Currie says the program will co-ordinate delivery to the plan member’s home and offer case management support via check-ins, counselling, education, and support by phone and eMail. The expansion also allows for eligible plan members in Ontario to have their claims submitted by the coaching program using their pay-direct drug cards. Great-West Life has set access controls to help ensure plans remain sustainable, including pre-determined conditions, a range of annual maximums capped at $5,000, coverage criteria, and eligibility guidelines to help ensure appropriate use.

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Early PGx Results Favourable

Early results of pharmacogenomic testing pilots are favourable, but insurers are still waiting for final indicators to determine the impact on future drug plan options, says a Telus ‘Health Benefits Hub.’ Several of Canada’s insurers are exploring the feasibility of pharmacogenomic (PGx) testing in guiding prescribing decisions and medication use. For example, Manulife’s pilot will wrap up in the fall, but already the insurer is noting changes in 51 per cent of prescriptions after PGx testing. But while a significant proportion of physicians have been interested or very interested in PGx test results, there are still those who are skeptical or have no opinion. It’s not surprising then that not all PGx tests are leading to further discussions between patients and prescribers. Sun Life Financial, which was the first insurer to launch a pilot in 2017 as part of the IMPACT study, notes that patients being treated for depression experienced an average of 31 per cent improvement in symptoms when physicians followed the recommendation of the test. Equitable Life’s partnership with GeneYouIn’s Pillcheck looks at the impact of PGx in managing disability cases due to mental health. Martin Chung, Equitable’s assistant vice-president of strategic health management, says while receptivity to a more tailored approach to pharmacotherapy has been encouraging, it’s too early for definitive outcomes. “We want a clear view of the pros and cons,” he says, adding that with mental health in particular, it’s not about curing the disease, but rather managing it optimally to support earlier return to work and prevent recurrence of disability. Meanwhile, Great-West Life’s pilot, launched in early 2018 with GeneYouIn’s Pillcheck as its provider, remains focused on individuals experiencing mental health or pain issues. So far the results are showing that physicians treating those with complex PGx profiles may have greater difficulty finding the most effective treatments.

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PfAD Wording Needs Minor Changes

Minor wording changes would clarify the Ontario Provisions for Adverse Deviation (PfAD) calculation and remove the potential inadvertent penalty for investing the pension fund’s assets in a manner which the administrator might otherwise deem a prudent approach in managing investment risk and diversifying sources of return, says the ACPM (Association of Canadian Pension Management). In its comments to Ontario’s ‘New Funding Rules for Defined Benefit Pension Plans: PfAD Calculations,’ it says some specific wording affects pension plan sponsors and administrators. It does agree that the PfAD calculation should be based on the plan’s asset mix (or target asset mix) and that a riskier asset mix should naturally require a higher PfAD. “Using that logic and an understanding that fixed income investments generally correlate well with pension liabilities, equity investments should require a higher PfAD than fixed income investments,” it says. However, in one subsection the wording is causing what appears to be in unintended result. FSCO is taking the position that this wording causes any non-investment grade fixed income investment to taint all fixed income investments, resulting in their treatment as equity investments. It is also unclear under which category infrastructure assets should fall into under. Since they have a number of characteristics that are similar to real estate, it would make sense to treat them similarly for purposes of the PfAD calculation.

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Disparity Exists In Health Treatment

The Canadian Mental Health Association (CMHA) policy paper on mental healthcare recommends equal treatment and funding for mental health as for physical health, says an Eckler GroupNews. ‘Mental Health in the Balance: Ending the Health Care Disparity’ calls on the government of Canada to introduce legislation to address mental healthcare and bring it into balance with physical healthcare in the country. A survey by CMHA found 85 per cent of Canadians reported mental health services in Canada are among the most underfunded services in the healthcare system and 86 per cent agree funding for mental health should be at the same level as funding for physical health. Every year, one in five Canadians struggles with mental health issues. By age 40, about half the population will have (or have experienced) mental illness. In addition to increased funding, it calls for improved co-ordination, treatment, research, and access to mental healthcare support, as well as better decision-making on effectively spending healthcare dollars. The potential cost of mental illness in the workplace could be significant for plan sponsors, says Eckler, as it stems from various sources including indirect costs of absenteeism and lost productivity, as well as direct benefits plan costs such as the increased use of psychology, counselling, and therapy services).

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SSQ Partners On Flight Insurance

SSQ Insurance is partnering with Late Flight Claim Inc. to provide its community of insureds with a compensation solution in the event of a cancelled, delayed, or overbooked flight. FlightClaim is a Canadian company whose mission is to inform travellers of their rights and defend them against major airlines by offering fast, risk-free options that are free of charge until compensation is obtained. SSQ  will provide FlightClaim.ca’s services through its assurancevoyages.ca travel insurance subsidiary. Eventually, these services may be added to other travel insurance products offered by SSQ Insurance.

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Transition To Northern Trust Complete

Knowledge First Financial, a Canadian registered education saving plan (RESP) company with more than 500,000 customers and assets under management of more than $6 billion, has completed its transition to Northern Trust for asset servicing. Northern Trust will provide Knowledge First Financial with global custody, performance, risk and analytics, and compliance monitoring services.

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ESG ETFs Inflows Increase

Environmental, social, and governance (ESG) ETFs and ETPs listed globally gathered net inflows of US$730 million during January, says ETFGI. Total assets invested in ESG ETFs and ETPs increased by 9.97 per cent from US$22.47 billion at the end of December to a record US$24.71billion. Europe domiciled ESG ETFs/ETPs account for 56 per cent of assets, while those in the U.S. account for 36 per cent. (A roundtable discussion between industry experts on ETFs in Canada today will be featured in the April issue of Benefits and Pensions Monitor. For information, contact Mike Hughes at 416-494-1066 or mhughes@powershift.ca)

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Unlisted Infrastructure Has Strong Year

Unlisted infrastructure had a strong 2018, says the ‘2019 Preqin Global Infrastructure Report.’ It says funds secured a record amount of capital and assets under management to hit an all-time high of $491 billion and this growth does not look set to slow in 2019 as a large proportion of investors are planning to increase their allocation to the asset class. While distributions to investors have been strong and growing, they have not exceeded capital calls – signs that the industry has room to grow. Seeking to capitalize on this potential, there are a record number of fund managers bringing funds to market at the start of 2019, targeting a record amount of capital. Looking ahead, the industry is facing challenges posed by increased competition and higher asset valuations. Investors are looking towards higher-risk, higher-return strategies in search of yield, and fund managers report that asset pricing is higher and opportunities are harder to find.

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Darakjian Joins CAAT

Mary Darakjian (CPA, CA) is director of pension implementation at the CAAT Pension Plan. Most recently, she was director of finance and special projects at Michael Garron Hospital (formerly Toronto East General Hospital). Prior to that, she was head of pensions at the TTC Pension Fund Society.

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Plan Consolidation Examined

In light of the recent trend towards plan consolidation, including the possibility of single-employer plan mergers with jointly sponsored pension plans, the ACPM Ontario Regional Council will provide an opportunity to get the inside track on various aspects of plan consolidation. ‘360⁰ Review: Plan Consolidation’ will feature Chris Kautzky, managing director at Aon Hewitt Investment Management Inc.; Eric Menzer, global head of pension and fiduciary solutions at Manulife Asset Management; and Rachel Arbour, assistant vice-president, plan services, at HOOPP. They will share their experiences with respect to selecting the right approach to consolidation, getting member buy-in, and navigating the regulatory landscape. It takes place April 3 in Toronto, ON. For information, visit Plan Consolidation

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