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October 17, 2019


Proposals Compound Existing Disadvantages

The March 2019 federal budget proposals to expand retirement income security options relating to advanced life deferred annuities (ALDAs) and variable payment life annuities (VPLAs) will have limited effect and will only be accessible by participants in very large defined contribution pension plans, says the Canadian Life and Health Insurance Association (CLHIA). As a result, the proposals compound existing disadvantages for the self-employed and employees of all but the largest sponsors of DC pension plans and for individuals who save for retirement through pooled registered pension plans (PRPPs) or outside of pension plans. This limitation is particularly important as the largest cohorts of Canadian baby boomers will reach age 65 in 2022-2023. Absent access to these new retirement income options, there is a significant risk that those individuals will alter their economic activity and consumption in order to preserve capital against uncertain life expectancies, creating potentially significant drag on Canada’s economic growth, it says. In order to achieve equity of access among Canadians as well as to provide the needed scale and cost effectiveness, the VPLA measures need to include pooling between plans for members of all DC pension plans and be extended to annuitants under registered retirement savings plans (RRSPs) and registered retirement income funds (RRIFs), members of deferred profit sharing plans (DPSPs), and, ideally, to holders of tax free savings accounts (TFSAs), in recognition of the increasing consumer use of TFSAs as retirement focused savings instruments. Absent such expansion, it is unlikely that these proposals will have a materially measurable impact on retirement income security.

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Changing Retirement Age Would Provide Flexibility

There is no right answer to what the retirement age should be, but there are ways to give Canadians more flexibility and higher lifetime retirement income, says Joe Nunes, co-founder and executive chairman of Actuarial Solutions Inc. Speaking at the Association of Canadian Pension Management (ACPM) session, ‘Decumulate or Bust? Fresh Perspectives on Retirement Income,’ he said the right age may be different for different people. However, with people living longer, the retirement period will be longer. At the same time, many people are legitimately working beyond 65. This lends itself to increasing the retirement age for pension plans. Nunes was part of the team at the Canadian Institute of Actuaries (CIA) that worked on the report, ‘Retire Later for Greater Benefits, Updating today’s retirement programs for tomorrow’s retirement realities.’ The report recommends that governments consider updating retirement ages to reflect that Canadians are already working past age 65 and the expectation that this trend will increase in the coming years. By changing the retirement age, instead of people waiting for the same benefit, they can get more benefit later. “We’re not trying to take money away from people, we’re just trying to move the money to later in life,” said Nunes. As an example of how retirement income can change with different retirement age, if a Canadian chooses to retire at age 67 instead of 65, they will receive 16.8 per cent more CPP/QPP benefits upon retirement under the current system. OAS benefits would increase by 14.4 per cent by retiring at 67 instead of 65. As for registered pension plans and RRSPs, later retirement options would give more flexibility to Canadians for managing their retirement savings. By increasing the retirement age, Canadians can decide to take their benefits later to receive higher lifetime retirement income.

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DC On Cusp Of Change

The defined contribution pension plan industry is on the cusp of significant change, says the Thinking Ahead Institute. Its research asserts that DC version 2.0 is now emerging and behind this lies another generation of plans ‒ version 3.0, which will be characterized by hyper-customization and integrated whole-of-life wealth management. This means retirement plans need to move beyond their role as tax-effective savings vehicles and become more tech-savvy, customized to the individual, cost-effective, and better governed. “The need for change has been clear for a long time,” says Bob Collie, head of research at the institute. “Even 10 years ago, we talked of a version 2.0 of DC that was built around the purpose of providing income throughout retirement. It’s only recently that real progress has started on this front. But momentum has been building and we expect things to develop quickly from here.” Even though each DC market is driven by local considerations, global themes did emerge. These include the increased focus on retirement income, the drive to scale, and a redefinition of the employers’ role.

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Value Stocks Remain Attractive

In Canada, value stocks remain attractive from a valuation standpoint compared with more expensive growth stocks, says HSBC Asset Management’s ‘Canada Outlook.’ Corporate profits in Canada are expected to be moderate, but still positive going forward, and the relative attractiveness of equities versus government bonds remains compelling. Given the current weakness of the business cycle, and the uncertainties about the economic outlook, it may seem tempting to recommend reducing allocations to risky assets like equities. However, what are perceived to be ‘safe’ assets ‒ in particular government bonds ‒ have seen yields drop recently based on the expectation that central banks will ease monetary policy further to support the economy. This has widened the valuation gap between bonds and equities. Hence, equities are attractively priced relative to bonds. Within fixed income, corporate bonds still have a higher return potential over government bonds. Within the government sector, provincial bonds are preferred over Government of Canada bonds because of their higher potential for returns.

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Ivanhoé Cambridge Controls easyHotel

Ivanhoé Cambridge, a real estate subsidiary of Caisse de dépôt et placement du Québec, and ICAMAP, a real estate fund manager, acting through the ICAMAP Fund, now control 68.8 per cent of easyHotel’s share capital following a successful recommended mandatory cash offer. easyHotel is the ‘super-budget’ hotel chain that was created in 2004 by Sir Stelios Haji-Ioannou, the founder of easyJet. easyHotel is the pan-European owner, developer, operator and franchisor of branded hotels. Its strategy is to target the super budget segment of the hotel industry by marketing “clean, comfortable, and safe” hotel rooms to its customers. It has an estate of 39 hotels with 3,672 rooms, comprising 27 franchised hotels (2,332 rooms) and 12 owned hotels (1,340 rooms).

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Edmands Heads Alliance

Jim Edmands is president of the Benefits Alliance Group. He has held executive positions with several large insurance companies and in the sports and entertainment business. He will be responsible for new business development nationally, as well as maintaining service relationships with the group’s current partnerships.

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Sources Of Alpha Identified

Reliable sources of alpha and taking environment, social, and governance (ESG) integration to the next level will be among the areas covered at the Benefits and Pensions Monitor ‘Pension Investment Trends’ session. David Onyett-Jeffries, of Guardian Capital, will explore the necessary building blocks for strategies designed to unlock reliable sources of Alpha, thereby driving market-leading performance and embedding downside protection. Margaret Childe, of Manulife Investment Management, will explain how institutional investors are taking ESG integration to the next level – climate risk scenario analysis at both the micro and macro level ‒ in an effort to better measure portfolio impact. It takes place November 14 in Toronto, ON. For information, visit Pension Trends

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October 16, 2019


More Assets Committed To ESG

Institutional investors in Canada, the United States, and the United Kingdom who apply environmental, social, and governance (ESG) principles are committing more of their assets to this approach than ever before, says the ‘2019 RBC Global Asset Management (RBC GAM) Responsible Investing Survey.’ Moreover, these investors are adopting an ESG-based approach specifically because they view it as a way to enhance returns and mitigate risk. The survey revealed that in key markets, institutional investors are shifting more of their assets to an ESG-based approach. Regionally, the percentage of survey respondents who report using ESG principles ‘significantly’ as opposed to ‘somewhat’ rose slightly in the U.S. (up about three per cent from 2018), more significantly in Canada (up over five per cent), and especially rapidly in the UK (up 30 per cent). This group of adopters is also more convinced of the tangible value that an ESG-based approach provides to their portfolios. Mitigating risk and enhancing returns is now the number one reason institutional investors are incorporating this approach, with 53 per cent of respondents citing it this year. It also suggests that the responsible investing market is showing signs of maturing. After two consecutive years of rapid growth in the adoption of ESG investment strategies, this growth slowed in 2019. The percentage of institutional investors who said they use ESG principles as part of their investment approach and decision-making process remained relatively flat compared to last year, at 70 per cent. However, on a regional basis, the percentage of institutional investors in the UK and Canada who ’significantly’ or ‘somewhat’ adopt ESG factors continued to tick upward, reaching 97 per cent and 80 per cent, respectively. In the U.S., ESG adoption was flat versus 2018, at around 65 per cent. “This new data confirms that while the multi-year trend of rapid increases in ESG adoption by institutional investors may be tapering off, the vast majority of these asset owners are still committed to using ESG principles in their investment process,” says Melanie Adams, vice-president and head of corporate governance and responsible investment at RBC GAM. “It is also noteworthy that institutional investors in the U.S., Canada, and the UK, who already significantly incorporate ESG into their investment decision-making are more convinced than ever that this approach helps lower risk and increase returns, and these investors are committing a larger percentage of their portfolios to an ESG-based approach.”

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Organizations Need To Be ‘Age-Ready’

Organizations that actively leverage their older, experienced workforce will be best-positioned for the future of work, says Mercer’s ‘Next Stage: Are You Age-Ready?’ It says the importance of being “age-ready” is underscored for both businesses and economies by the impact of the twin forces of a rapidly aging labour force coupled with an uncertain global economic growth rate. “With labour force size, participation rate, and productivity so closely tied to business and economic growth, the experienced workforce is a source of talent and competitive advantage that employers need to embrace now,” says Pat Milligan, senior partner and global leader of its multinational client group. “To be “age-ready,” however, requires a thoughtful and careful analysis of this workforce segment as well as a change in mindset as to how experienced workers truly add value to organizations. Experienced workers contribute value, often well beyond the traditional measures of individual performance tracked by most employers, in a number of ways including lower costs because they are less likely to leave; increased productivity of those around them through knowledge sharing; and by enabling innovation and strengthening customer connection. Yet for many employers, experienced workers are largely ignored or misperceived in their strategic workforce plans. According to the World Economic Forum’s 2016 ‘Future of Jobs’ report, only four per cent of respondents said they planned on investing in experienced workers as part of their workforce strategy. This urgency for employers to address their experienced worker strategy since by 2040 the average life expectancy is predicted to be 80 years, up from 56 in 1966 and 72 in 2016. As a result, many people are working longer for a variety of reasons, including financial necessity, purpose, and social/intellectual engagement. It offers a number of ways to optimize an experienced workforce such as developing and implementing people and careers strategies that embrace the experienced workforce; understanding the impact an organization’s retirement plan design has on the trajectory of retirement readiness and labour flow; examining and tackling how ageism might manifest in an organization in pay, bonuses, performance, promotion, and recruitment statistics through a lens focused on aging; and developing a lifelong learning attitude that positions people to embrace jobs of the future.

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FSRA Committees Study Plans Challenges

The Financial Services Regulatory Authority of Ontario (FSRA) will study challenges facing the pension space. It is creating four standing technical advisory committees which will each focus on one of four pension plans: defined benefit single-employer plans, defined contribution plans, multi-employer plans, and public sector plans. The committees will advise the FSRA on proposed regulatory guidance regarding pensions and identify issues with existing legislation. It is looking for committee members based on their pension knowledge, areas of expertise, and level of experience. Each committee would have representation from unions, plan members, and retirees. Committee members will serve two- or three-year terms and will meet at least twice a year. The deadline to apply is November 1. More information is at Pension Committees

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Growth Positive But Lower Than Potential

The global economy is moving into a period of protracted weakness in which growth is likely to remain positive, but significantly lower than potential, says the ‘AB Global Economic Outlook October 2019.’ Central banks are alive to the risk that weak growth might turn into a deeper and more damaging downturn. As a result, the U.S. Fed and ECB have eased policy in recent weeks and more of the same is expected over the coming year. One of the keys to the 2020 outlook is policy effectiveness, it says. While Chinese policymakers should be able to prevent a destabilizing slowdown in growth, hopefully, the Fed can do likewise. More worrisome are Europe and Japan where monetary policy “may already have run out of road.” While many see fiscal policy as the answer, and it has long thought that’s where the world is headed as it grapples with high debt and weak secular growth and inflation, for now there is concern over whether the fiscal response will be aggressive enough or broad enough to change the business cycle for the better.

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CPPIB Invests In Axel Springer

The Canada Pension Plan Investment Board (CPPIB) will invest, through its wholly-owned subsidiary CPPIB Europe S.à r.l, alongside funds advised by KKR, in Traviata I S.à r.l., a holding company that is conducting the voluntary public tender offer for the shares of Axel Springer SE. Axel Springer is a media and technology company that is active in more than 40 countries, providing information across its diverse leading classifieds portals (StepStone Group and AVIV Group) and media brands (among others Bild, Welt, Business Insider, Politico Europe). Over the last several years, it has transitioned from a traditional print media company to Europe’s leading digital publisher.

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Tsotsos Heads Institutional

William (Bill) Tsotsos (CFA) is head of institutional for Franklin Templeton Canada. An industry veteran with more than two decades of financial services industry experience, prior to joining the firm he was senior vice-president and head of Canada for BrightSphere Investment Group (formerly Old Mutual Asset Management). He was also previously a managing director at Baring Asset Management, where he led business development, consultant relations, and client service in Canada.

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Water Risks Addressed

‘The Investment Case for Addressing Water Risks and Opportunities’ will be the focus of a ‘Responsible Investment Week 2019’ session. MacEwan University’s Social Innovation Institute, in partnership with Alberta Investment Management Corporation (AIMCo) and the Net Impact Edmonton Professional Chapter, are hosting a panel discussion to explore how investors are exercising their voice within the global financial system to effect positive outcomes for all. It takes place October 29 in Edmonton, AB. For information, visit Water Risks

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October 15, 2019


Recession Unlikely Until 2021

A global recession is unlikely to take hold until 2021 or later, says an ‘HSBC Asset Management Canada Outlook.’ It says when stock markets advance, even in the face of negative news, analysts refer to it as ‘climbing a wall of worry.’ The ability of today’s markets to climb a wall of worry suggests investors are confident that negative headwinds will be overcome at some point. However, there are notable caveats. Despite some mildly positive developments in the ongoing U.S.‑China trade tensions, this simmering conflict will remain a drag on growth for the foreseeable future. Political developments also have the potential to push positive news to the sidelines. Uncertainty surrounding the efforts to impeach President Donald Trump could take centre stage in the fourth quarter and the growing odds of a hard no-deal Brexit also remain cause for concern. ‘HSBC Nowcast,’ its proprietary measure of global economic activity, has steadily declined since the beginning of 2018, from a peak of 4.6 per cent annualized growth in January 2018 to 2.2 per cent in July 2019. While recent weakness in economic data – combined with volatile stock markets and a temporary inversion of the yield curve – has raised concerns among investors about the risk of a U.S. or global recession, the current global growth rate is at about the same level as during 2016 when recession fears last flared up and there isn’t enough negative data to support forecasts of an impending recession.

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Active Managers Fail In Emerging Markets Debt

Active managers are failing to beat their benchmarks in emerging markets debt ‒ an area abundant with mispriced securities, bad data, and opaque counterparties ‒ and an area where they believe they shine, says a report from Willis Towers Watson, It found less than half of managers have delivered returns above benchmarks over five, seven, and 10-year time periods, even before fees are subtracted. Once returns are adjusted for fees and other expenses, about 20 per cent of managers beat their yardsticks for performance. It attributes the dismal performance to some fundamental strategy mistakes by managers. “What do Africa, Latin America, Central Europe, the Middle East, and Asia have in common? Very little. And yet investments in emerging market debt remain dominated by broad, generalist funds that seek to span all of these areas and require a manager to possess skill in currency, country, and companies of all sectors and a huge span of completely different investments,” says the report. “Perhaps unsurprisingly, the chance of any single manager having all of these skills is very small.”

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U.S. Catching Up With ESG

While incorporating environmental, social, and governance (ESG) factors into investment processes is more widespread in other parts of the world, U.S. institutional investors are starting to catch up, says Callan’s seventh annual ESG survey. Some 42 per cent of U.S. survey respondents said they incorporated ESG factors into their investment process this year, up from 22 per cent in 2013. Integrating ESG factors into all investment decisions also grew in 2019, with 51 per cent of institutional investors that incorporate ESG doing so, as opposed to using separate allocations, negative screening, and other approaches to ESG. The way investors define ESG is starting to come into better focus. Most consider ESG factors with every investment manager search and selection. Investors are also relying more on investment managers and consultants to help define ESG goals and implementation strategies.

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Billions To Compete Digitally

Banks and other financials around the globe will need to spend hundreds of billions of pounds on their IT systems over the next few years in order to be able to compete in the digital world, says Vincent Vinatier, manager of the AXA Investment Managers WF Framlington FinTech fund. Changing consumer behaviour has already seen a sharp jump in investment in technology by financials as they seek to stay ahead of competition from peers and new fintech businesses. The banks alone are forecast to spend $296.5B globally by 2021. Further out, the scale of the investment continues to grow, with budgets increasing for those financials that want to compete in the digital era. “The size of the issue is mind-boggling in terms of cost,” he says. “So many banks and other financials still have clunky systems and if there have been any acquisitions of other businesses in the past then there could be two or three old systems which need upgrading and merging.” From an investment perspective, this trend of increasing IT spend is a huge area of growth for many years to come and for the companies offering solutions such as white-labelled digital banking solutions, the organic growth rates are already between 10 and 20 per cent a year.

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Black Creek Creates Pooled Vehicle

Black Creek Investment Management Inc. has created a pooled vehicle for Canadian institutional investors to access their international equity strategy. Launched at the end of September, the Black Creek International Equity Focus Fund currently has two investors. The fund is a focused and concentrated collection of companies outside of the U.S. and Canada, with conscious diversification by business/industry, geography, management, and investment idea. Black Creek now offers several options for investors who seek the simplicity and cost effectiveness of pooled vehicles in the U.S. and Canada.

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CBRE Invests In Renewable Energy Company

CBRE Caledon Capital Management Inc. has signed an agreement for a $260 million structured equity investment in a U.S.-based independent renewable energy company, Pattern Energy Group Inc. It worked with Pattern Energy to structure a bespoke equity solution that provides it with attractive risk-adjusted returns in the renewable energy sector while also providing Pattern Energy with competitively priced equity capital to execute its business plan. The structured equity solution includes an escalating preferred dividend from Pattern Energy and a contingent preferred dividend tied to the performance of Pattern Energy Group Holdings 2 LP, which is a company partially owned by Pattern Energy that specializes in developing renewable energy projects. CBRE Caledon is making the investment on behalf of a fund sponsored by the firm as well as its separately managed accounts. A number of institutional co-investors are also participating in the transaction alongside CBRE Caledon.

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Foundation Earns ‘Spirit Of Hope’ Award

The Paul Hansell Foundation (PHF) is a winner of the St. Joseph’s Foundation ‘2019 Spirit of Hope Award.’ The award honours people and organizations making impactful contributions in mental health and or addictions, giving new reasons for hope. Brian Hansell, founder of the Paul Hansell Foundation (PFH) and president of Hansell Consulting Group Inc., says this is an honour for his PHF team and his community supporters. After losing his son Paul to suicide in 2010, he built a foundation in his name and began a movement that puts mental health on an equal footing with all other forms of health. The flagship initiative of PHF is the #ConvoPlate. Part art therapy and part global pass-it-forward movement, the #ConvoPlate inspires people to have conversations about mental health regularly. He believes wholeheartedly that by encouraging connected conversations at the youngest possible age the mental and emotional wellbeing of children and youth can be successfully supported.

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Compliance Issues Examined

A number of current topics in compliance and enforcement will be discussed at the ‘AIMA Canada Fall Regulatory Forum.’ Sessions will look at NI 81-102 liquid alt product launch updates, including exemptive relief highlights, regulatory burden reduction updates, and AMF and IIROC priorities. Speakers are Gabriel Chénard, and Jean-François Nadeau, senior policy analysts (investment funds branch) at AMF, and France Kingsbury, regional director, regulation, at IIROC. It takes place October 28 in Montreal, QC. For information, visit Regulatory Forum

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October 11, 2019


SSQ Studies Health And Wellness Practices

SSQ Insurance is partnering with Le Pôle Santé – HEC Montréal to study the link between health and wellness management practices in the workplace and the most common insurance claims made by employees. By participating in such a project, the insurer hopes more will be learned about the impact that corporate practices have on the health of individuals and help participating companies apply the findings to improve the health and wellness of their employees. It will be soliciting some of its group insurance plan holders. Data gathered on a voluntary and confidential basis will be used to identify promising health and wellness workplace management strategies. These will be based on each sector’s context, in an effort to curb financial, human, and social costs to improve quality of life at work as well as bolster performance and productivity. Companies who participate in the study and follow its recommendations could reap significant benefits. Currently, several million Canadians are living with a chronic illness, making it the most common category of illness.

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Onboarding Helps With Retention

There are critical components for keeping good workers right from the start ‒ ‘the Four Cs of Onboarding,’ says Express Employment Professionals. The company needs to help the employee understand the company’s mission, goals, policies, customers, organizational structure, and how their job fits into the big picture. Connections are needed to help the employee build relationships and information networks with colleagues. The new hire needs to understand the company’s culture, values, beliefs, and environment and how they thrive in that environment. Finally, the employee’s personal objectives and how they are measured and realized, as well as setting out expectations for success and advancement. Shane DeCoste, an Express franchise owner in Halifax, NS, explains that employers must have a well thought-out onboarding plan. “Onboarding is frequently overlooked as a key element of employee retention,” he says. “The labour market is tight and employers spend a lot of time and resources in attracting qualified talent. Proper onboarding protects the investment employers make by ensuring that a new employee becomes properly exposed to their new work environment, its team members, culture, and vision and values.

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Asia Steps Up Pension Reform

Against a backdrop of slowing economic growth and rapidly aging populations, Asian governments have stepped up pension reforms to boost retirement savings adequacy, potentially generating business opportunities for asset managers operating in the region, says Cerulli Associates. With retirement income security becoming a top concern for governments in the region, amending pension policies has been a common government response to address their aging and pension challenges. For example, Singapore is raising its retirement and re-employment age ceilings and in Korea, the government is mulling changing its legal definition of ‘old age’ to 70. Some Asian markets, such as Hong Kong and China, have sought to build multi-pillar pension systems. “The need to ensure the adequacy of Asian pension funds has never been more urgent, as many economies in the region face a growing possibility of a pension crisis. This is resulting in increased pressure on state pension funds to achieve higher returns,” says Della Lin, a senior analyst at Cerulli Associates.

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Health Cost Savings Measures Available

While it’s important for employers to approach their benefit strategy holistically, there are emerging cost-saving measures U.S. employers can tap into, says the 24th annual ‘Best Practices in Health Care Employer Survey’ by Willis Towers Watson. One of the main drivers of growing affordability concerns among both employers and employees is pharmaceutical spending ‒ notably, the increased cost and continued inflation of specialty pharmaceuticals. More employers are attempting to offset specialty pharmaceutical costs by influencing the site of care as the location where care is given can dramatically affect prices. As well, a growing set of employers are intrigued by the possibility of biosimilars offering a lower cost option for patients in need of expensive specialty products. Employers are nudging their employees toward higher value, appropriate care that is sourced efficiently and away from overused, potentially wasteful services by applying design features or incentives. The proportion of employers slashing out-of-pocket costs to steer employees toward proven services that produce positive health outcomes at a lower price tag will nearly triple over next few years (from 17 per cent today to 46 per cent by 2021) and more employers are increasing the out-of-pocket costs for commonly overused and sometimes unnecessary services Finally, as employers look to cut costs, they are enhancing their population’s wellbeing, mental, and behavioral health. This ranked as the top clinical area of focus over the next three years, selected by two in three employers.

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Sun Life Expands Digital Tools

Sun Life has expanded its suite of digital tools and healthcare innovations to help clients with mental health condition get back to work and live a healthier life. Its latest digital and healthcare innovations include partnering with LifeLabs Genetics and BiogeniQ to offer pharmacogenomics as part of a personalized solution. It has the potential to help clients and their physicians find an effective treatment faster. It also partnered with EQ Care to pilot vIME, a solution that helps those on disability participate in an independent examination without leaving the comfort of their own home. Clients on disability with mild to moderate anxiety or depression can take part in online cognitive behavioural therapy modules, which focus on improving their mental well-being. With weekly virtual touchpoints with a mental health professional, individuals will conveniently receive care and support.

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Caisse Invests In Scooters

The Caisse de dépôt et placement du Québec (CDP”) is making an equity investment of US$50 million in Bird Rides, Inc., the global leader in sustainable micromobility. Bird operates shared electric scooters in over 100 cities globally, offering an increasingly popular clean mobility option for short urban rides. After less than three years of existence, it has already established itself as a key shared transportation option for commuters in major cities across the globe.

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Deeper Dive Taken Into Retirement Concepts

CPBI Southern Alberta will provide a deeper dive into retirement plan concepts as well as the risks, decisions, and challenges faced by plan sponsors in Canada. ‘Retirement Plans 201 ‒ a Deeper Dive into Group Retirement Plans’ will cover areas such as essential defined benefit plan elements that plan sponsors should know; considerations for Canadian sponsors with global workforces; and tips, tricks, and trends in effective decision-making. It takes place October 24 in Calgary, AB. For information, visit Deeper Dive

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October 10, 2019


Employers Holding Line On Raises

Canadian employees hoping for larger pay raises next year may be disappointed, says a Willis Towers Watson survey. It reports Canadian employers plan to hold the line on budgeted pay raises in 2020, despite low unemployment, a tight labour market, and volatility in the economy. Some employers, however, are projecting slightly larger annual bonuses next year, while 26 per cent of organizations are reporting separate promotional budgets in their efforts to supplement employee salaries, a 35 per cent increase over last year. Salary budgets are not expected to change in 2020. The ‘2019 General Industry Salary Budget Survey’ found increases are expected to hold steady in 2020 for technical and business support employees (2.7 per cent) as well as for production and manual labour employees (2.3 per cent in both years). Professional and client management employees may receive a slightly lower increase next year (2.7 per cent in 2020 versus 2.8 per cent this year). Companies are also budgeting slightly smaller increases for executives (2.4 per cent in 2020 versus 2.6 per cent this year) and management employees (2.7 per cent in 2020 versus 2.8 per cent this year). Virtually all companies (94 per cent) plan to give raises next year, the same percentage as this year; however, more companies are formalizing their promotional increase budget.

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Great-West Partners With Teladoc

One in five (20 per cent) of Canadians believe they needed mental healthcare in the past year, yet a third of them did not get adequate help. Without that help, many face incorrect diagnoses and longer recovery periods. To address this critical gap, and in recognition of today’s World Mental Health Day, Great-West Life has launched the ‘Best Doctors Mental Health Navigator’ services from Teladoc Health. “A growing number of people are struggling with mental health issues, having limited or no access to the mental health supports they need,” says Ryan Weiss, vice-president, group customer products and experience, Great-West Life. With this service, he says “we can increase access to specialized care, which has the potential to be life-changing, especially for those who find their condition is not improving despite a current diagnosis or treatment plan. This furthers our purpose in improving the mental, physical, and financial wellbeing of Canadians and extends our long-standing commitment to championing mental health issues in the workplace.” Mental Health Navigator is a collaborative program that draws on a team of clinicians, psychologists, psychiatrists, and expert physicians to help get the right diagnosis, outline an action plan, and offer guidance through the mental health system. The service helps those seeking a diagnosis or looking for a review and second opinion on their current treatment plan to find a recommendation specific to their needs.

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Recession Paranoia Over-played

Paranoia in the market around an imminent recession is over-played, says Joseph Little, Global Chief Strategist, HSBC Global Asset Management, in his investment outlook for the remainder of 2019. While investors shouldn’t expect a return to the “Goldilocks economy” of 2017 and early 2018, “so far in 2019, investment returns have been strong across the board. Fixed income asset classes are up around 10 per cent and equity markets and alternatives have done even better. But, it hasn’t felt like a bull market environment for investors – in fact, it’s felt like the opposite,” he says. With the signals looking ominous as yield curves invert and a third of global bonds trade on negative interest rates, a “storm of uncertainty” has developed, brewing from cyclical weakness in manufacturing, political uncertainty. and a lack of ammunition from policy makers. So investors need to look at ways to navigate and ride out this storm. “It’s important to understand not just how the macro environment is evolving, but also what is being discounted by the market,” he says.

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Structure Of Populations Unprecedented

Lower fertility rates and longer life expectancies are shifting the age structure of populations toward smaller young-age cohorts and larger old-age cohorts, an unprecedented composition, says a Vanguard ‘Research and Commentary Recap.’ Its examination of some implications for the economic building blocks of population, participation, and productivity to develop expectations for the possible effects on overall GDP growth. When evaluating the effects of demographics alone, lower population growth and a higher proportion of elderly will likely have a neutral to negative impact on long-run economic growth. When considering potential second-order effects, however, a shrinking workforce, along with rising wages, can incentivize firms to increase productivity, supporting GDP growth. These demographic projections do not imply decades of persistently low growth; they can be more than offset by unexpected developments in institutional and technological factors, which are the main drivers of economic growth.

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People Leave Managers

There’s some truth to the saying, ‘people leave managers, not companies.’ About two in five professionals surveyed in Canada (39 per cent) have quit a job due to a bad boss, says research from Robert Half. “Managers set the tone for the office and have a considerable amount of influence over the daily experiences and satisfaction of their employees ‒ for better or worse,” says David King, senior district director for Robert Half. Bad bosses can cause employees to leave for a variety of reasons. Employees often need quick input and decisions from leaders to move forward with projects. Staff who can’t count on a timely reply are likely to be continually frustrated and may eventually seek greener pastures. Bosses who require constant updates and give overly detailed directions on how work should be done can exasperate employees. It also shows workers that you don’t believe they can make good decisions on their own. As well, those managers on the other end of the scale ‒ the ones who provide vague direction or leave tough decisions to other people all the time ‒ are another reason why good employees leave. Workers want a leader who leads and offers insight they may not have, not someone who just occupies an office.

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Norwegian Pension Fund Removes Canadian Energy Names

The largest pension fund in Norway has removed four Canadian energy names from its investment list and says it will no longer put money in companies that derive more than five per cent of their revenue from the oilsands. It will now exclude Cenovus Energy Inc., Suncor Energy Inc., Imperial Oil Ltd., and Husky Energy Inc. from investment consideration, along with Russia’s Tatneft PAO. It sold US$58 million worth of stocks and bonds as it reduced its tolerance threshold for companies with interests in the oilsands from 30 per cent to five per cent, matching its limit for coal investments. “By going coal and oilsands free, we are sending a strong message on the urgency of shifting from fossil to renewable energy,” says Sverre Thornes, KLP’s CEO.

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Disconnect Exists On Cyber Security

There is a growing disconnect between how prepared Canadian employees feel to deal with cyber security threats and how much training they receive, says a Scalar Decisions survey. It says while 75 per cent of Canadians feel they are prepared to handle cyber security attacks in the workplace, the majority of Canadians (60 per cent) say they have not received any form of cyber security training. From a regional perspective, employees in Atlantic Canada (82 per cent) and British Columbia (80 per cent) feel the most prepared to deal with cyber security threats, while employees in Quebec (64 per cent) and Alberta (74 per cent) feel the least prepared. “Ensuring that employees, regardless of job function, feel properly equipped, educated, and trained to deal with the unique security challenges that Canadian organizations increasingly face is imperative. Employers have a responsibility to provide resources and instill best practices in employees,” says Theo Van Wyk, chief technology officer of Scalar. “As the threat landscape continues to evolve, the lines between workplace and personal security risk blurs; training and preparation is key to help employees become better digital citizens.”

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Ruiters Joins Benecaid

Josh Ruiters is executive benefits consultant at Benecaid Health Benefit Solutions Inc. Most recently, he was a benefits consultant with People Corporation.

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Finance And Stress Discussed

An ACPM national session hosted by the Atlantic Regional Council will discuss ‘Finance and Stress: Can Plan Sponsors and Administrators ease the pain?’ With 48 per cent of Canadian workers saying they’ve lost sleep because of financial worries, the lack of financial literacy contributes to financial stress which can affect workplace performance, personal relationships, and individual opportunities for an adequate and sustainable retirement. Bill VanGorder, past chair of CARP; Nikki Keating, director of finance at Bell; and Gary Rabbior, president, of the Canadian Foundation for Economic Education; will examine the challenges of financial literacy and wellness. It takes place November 12 in Halifax, NS. For information, visit Finance And Stress

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