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February 21, 2020


CDPQ Net Assets Grow

The Caisse de dépôt et placement du Québec (CDPQ) had a weighted average return on its depositors funds of 10.4 per cent in 2019, which represents $31.1 billion in investment results. The annualized return over five and 10 years was 8.1 per cent and 9.2 per cent. Its net assets totalled $340.1 billion as at December 31, increasing $114.2 billion over five years, with investment results of $106 billion and $8.2 billion in net deposits. “We expect the next decade to be more challenging than the past one, during which all investors benefited from the longest bull market in history. In the context of a growing gap between real economic performance and market performance, and multiple indicators prompting us to be cautious, it will be important for our strategy to continue evolving while we manage responsibly and with agility,” says Charles Emond, president and chief executive officer of CDPQ. However, overall, its portfolio is built to be more stable over the long term and less vulnerable to sharp market movements, so it is well-positioned to take on the headwinds that await it, he says. Over five years, CDPQ has generated $11 billion in value added compared to its benchmark portfolio. Over 10 years, it has produced over $18 billion in value added for its depositors.

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PMPRB Strikes Right Balance

The Patented Medicines Regulations Review Board (PMPRB) proposed changes strike the right balance between reducing the high cost of prescription drugs in Canada while ensuring Canadians have access to affordable and necessary medications, says the Canadian Life and Health Insurance Association (CLHIA). Its comments on the PMPRB consultation on draft guidelines says the changes will allow the PMPRB to better protect Canadians from excessive prices. The draft guidelines are primarily intended for patentees and aim to provide transparency and predictability regarding the process as well as provide an overview of the processes patentees should be aware regarding their filing obligations. However, as a key stakeholder in the system, CLHIA believes the PMPRB needs to consider additional factors beyond those that have traditionally been used by public payers. When setting the maximum price for medications, it needs to consider that a drug might help someone return to support productivity or improve mental health. These factors have not traditionally been given sufficient weight in health technology although the public health system may benefit from, for example, a reduction in hospitalization.

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ESG Indicators Provide Insights

Sustainalytics has launched a set of environment, social, and environment (ESG) indicators designed to fulfill the needs of institutional investors looking to develop ESG insights. ‘Sustainalytics’ ESG Data’ can be used for security selection, portfolio construction, risk and scenario analysis, and to meet disclosure requirements. The proliferation of sustainable investment assets means investors are becoming more sophisticated in their use of ESG information and want a robust ESG dataset to generate ESG insights. Sustainalytics’ ESG Data offers coverage on 11,000 companies across 138 sub-industries using 220 ESG management, corporate governance, and event indicators covering a variety of themes.

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Fixed Income Competition Fuels Innovation

Fixed income dealers’ response to long-term challenges facing the industry could be working to the advantage of global investors, says Greenwich Associates. As most banks around the globe face pressure to increase profitability, they are increasingly competing among a small set of dealers, new liquidity providers and, to some extent, electronic trading platforms for a share of existing clients’ volumes and revenues. That competition is fueling innovation by banks seeking an edge over rivals and benefiting investors in the form of new and better digital products and tools. It says developments transforming the marketplace include the electronic marketplace as more business goes electronic and dealer eTrading capabilities continue to be an important driver of customer flows. One of the best examples of the intense competition spurring dealers to action is the long-discussed move to digitize the new issue process. The proliferation of fixed-income ETFs and the subsequent boost in portfolio trading business represents another rare bright spot for dealers. As well, increased demand by asset managers and owners for products that align with ESG-related initiatives are creating new opportunities for dealers, be it in more traditional products like green bonds or newer structured vehicles.

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Demand For Sustainability Intensifies

The challenge UK asset managers face in balancing their fiduciary duty to deliver returns to clients with the growing demand from investors and regulators for investments to be sustainable has intensified recently, says Cerulli Associates. It believes that UK asset managers should brace for increased scrutiny of their environmental, social, and governance (ESG) capabilities. They must respond to the updating of the country’s stewardship code from the Financial Reporting Council, the introduction of additional policies relating to pension funds’ statements of investment principles (SIPs) by the Department for Work and Pensions, and the launch of a new supervisory mandate that affects insurers by the Prudential Regulation Authority. “It all means extra work for managers, but, jointly, the three sets of regulation should also make it easier for managers to identify gaps in their ESG capabilities and to establish a progression strategy for responsible investment,” says Connor Bigland, analyst, European institutional research at Cerulli Associates. Pension funds should have updated their SIP policies to include an engagement policy as of October 2019, yet the introduction so far appears to have had little impact on pensions’ relationships with managers. However, Cerulli expects reporting on the enforcement of SIP policies, which begins in October this year, to begin to drive change. Research indicates that many UK-based defined benefit pensions are having to create engagement policies from scratch.

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Benefits Designed For Farmers

The Edge Benefits Inc. has designed a set of benefits for Alberta farmers and their workers to meet the recent adoption of Alberta’s Farm Freedom and Safety Act (Bill 26). The new legislation removes the former mandatory requirement for Workers’ Compensation Benefits (WCB) to be in place for small farms and although larger farm operations must still have workplace insurance, they will now have a choice between WCB or private insurance. Its farming packages are designed to start with essential protection, but can be tailored to each worker and owners’ situation. Beyond the essential protection, it offers a range of additional programs, including health and dental, critical illness, and life insurance.

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Fairstone Financial Purchased

Duo Bank of Canada, a Toronto, ON-based financial services provider supported by Stephen Smith, Centerbridge Partners L.P., and the Ontario Teachers’ Pension Plan, will purchase all outstanding shares of Fairstone Financial Holdings Inc. from an investor group led by J.C. Flowers & Co. LLC and Värde Partners, Inc. The deal includes its operating subsidiaries. Headquartered in Montreal, QC, Fairstone is a Canadian non-bank provider of responsible credit solutions for near-prime borrowers with over $3 billion in assets on a consolidated basis.

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SHARE Adds Directors

Anthony Schein is director of shareholder advocacy and Michael Toulch is a senior analyst, shareholder engagement and policy, at the Shareholder Association for Research & Education (SHARE). Prior to joining the association, Schein spent almost a decade in senior roles at an Ontario public sector trade union, where he worked with senior leadership on advocacy, governance, campaigns, and negotiations. Toulch will focus on climate change and environmental sustainability. Previously, he worked for an international corporate sustainability ratings provider as a sustainability analyst, specializing in supply chain human rights and business ethics.

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Sweatman Provides Legal Update

The ‘CPBI Pacific: Legal Update 2020’ will highlight noteworthy legal developments from the last year that will be of interest to those who deal with pension and employee benefit issues. Speaker is Scott Sweatman, a partner at Dentons Canada LLP. It takes place March 3 in Vancouver, BC. For information, visit http://cpbi-icra.ca/Events/Details/Pacific/2020/03-03-CPBI-Pacific-Legal-Update-2020

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February 20, 2020


Target Date Plan Legislation Missing

PIAC (Pension Investment Association of Canada) does not see any reference to enabling legislation for target benefit plans in Manitoba’s ‘Bill 8, the Pension Benefits Amendment Act.’ However, these are an option for plan sponsors in many other provinces and were part of the province’s 2018 discussion paper. While it appreciates that there are some difficult policy issues to be considered in the transition of existing liabilities from a traditional defined benefit to a target benefit plan, it encourages the province to move forward in this area as it offers the promise of a more flexible and sustainable plan design. It also notes there is no reference to allowing full legal discharge of liabilities in the case of annuity purchases. With other provinces having provided this release of liability and the federal government indicating its intention to follow suit in its last budget, it encourages Manitoba to move in the same direction as annuitization transfers risk to a highly regulated and heavily capitalized part of the financial system and thereby ensures ongoing security for plan members and regulatory oversight. It believes that many plan sponsors with closed plans will be unwilling to incur the high cost of annuitization without certainty around legal discharge, thereby maintaining these liabilities in a less regulated and capitalized framework.

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Lawyers Get Pension Plan

Lawyers Financial will work with the CAAT Pension Plan to provide predictable and sustainable lifetime income for Canada’s legal community through a defined benefit pension plan ‒ DBplus. Of the 23 per cent of Canadian employees in the private sector with pension plans, the vast majority are union members who historically have negotiated defined benefit plans in their collective agreements. Many of the rest have defined contribution plans. However, for the legal community, the numbers are even bleaker, says the Canadian Bar Insurance Association as it is simply unrealistic to expect individual law firms, regardless of their size, to assume the financial, demographic, fiduciary, and administrative risks associated with defined benefit plans. In fact, most law firms have no pension arrangement at all. In 2016, a Lawyers Financial task force, comprised of leading pension and actuarial experts, began investigating pension options. After two years of research and consultations, the resulting  decision was for DBplus. It eliminates the funding risk for employers and creates a reliable retirement pension income for lawyers and staff. DBplus will provide a guaranteed retirement income that is paid monthly for life. On average, a member who participates over their entire career in DBplus is expected to receive approximately $8 in pension benefits for each $1 they contribute. DBplus is expected to launch for the legal community on July 1, 2020.

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Standing Forum Needed For PMPRB

The Patented Medicine Prices Review Board (PMPRB), the pharmaceutical industry, medical researchers, all payers, and patients are facing a complex and uncertain world moving at unprecedented speed, say Chris Bonnett, principal consultant and founder of H3 Consulting Canada, and Denise Balch, principal consultant and president of Connex Health. In their comments on the PMPRB draft guidelines consultation, they say the drivers of these changes are well-known and yet each party works in relative isolation until after problems have already developed. Rapid change and isolated expertise create fragmented and clearly inadequate governance for prescription medicines, within a health system that performs poorly in international comparisons. Moving forward and proposed earlier to be applied at the system level, a standing forum is needed to provide expert input to the PMPRB and help the board manage the complexity of the entire Canadian patented drug market. It would also create the relationships and trust needed to solve complex problems that have both singular and interactional effects. They recommend an advisory board that includes public, insurer, advisor, plan sponsor and patient representatives, the brand and generic pharmaceutical industries, the pharmacy industry, and relevant health professionals (medicine, pharmacy, nursing, dentistry, veterinary). This would eliminate or at least mitigate the need for ad hoc or situational consultations and help the board stay abreast of the market. Beyond monitoring the process and real-world impacts of the new guidelines, the board should commission frequent and focussed studies that could inform policy.

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Regulatory Pressure Improves Gender Diversity

Regulatory pressure on European investment firms to improve gender diversity within their management bodies is “credit positive,” says credit rating firm Moody’s. Earlier this month, the European Banking Authority (EBA) called on asset managers, banks, and other credit institutions to improve gender diversity at management levels following a finding that over 40 per cent of firms had not complied with an EU directive requiring them to adopt a diversity policy. The EBA says credit institutions with more women on the board are likely to be more profitable than those with single gender boards. Moody’s says a diverse approach to hiring and promotion, coupled with fairness in compensation are key to attracting and retaining talent and are attributes increasingly becoming indicators of asset management companies’ financial strength. “A more diverse team is also more likely to make better business decisions and foster greater innovation and better governance, which are essential for companies to retain access to investors,” it says.

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Healthcare Industry Set For Invigorating Year

Despite rising trade tension and a sluggish economic outlook for 2020, the global healthcare industry is set for an invigorating year due to a partial realization of major healthcare policies and initiatives and technology advancements, says Frost & Sullivan. Its ‘Global Healthcare Market Outlook, 2020’ says, moreover, value-based care is driving the adoption and need for consumer-centric targeted therapies. Retail giants such as Amazon, Walmart, CVS, Ali Health, and Best Buy will continue to make further headway into the individual care space, driving the “comparison shopping” consumer trend for healthcare services and products. With these trends, the overall global healthcare market is poised to register a 5.3 per cent growth in 2020 and exceed $2 trillion in manufacturer revenue. As well, increased adoption of annuity-based specialized reimbursement programs by private insurance companies and therapy manufacturers will unlock the commercialization potential of gene therapies.

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Teachers’ In Consortium To Acquire RSA

A consortium led by Symphony Technology Group, the Ontario Teachers’ Pension Plan Board, and AlpInvest Partners will acquire RSA in an all-cash transaction with Dell. The transaction includes the purchase of RSA Archer, RSA NetWitness Platform, RSA SecurID, RSA Fraud and Risk Intelligence, and RSA Conference. RSA provides risk, security and fraud teams with the ability to holistically manage digital risk, including threat detection and response, identity and access management, integrated risk management, and omnichannel fraud prevention.

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Lin Has New Role

You-chen (Ian) Lin is a senior analyst at Gallagher Benefit Services (Canada) Group Inc. Most recently, he was a benefits analyst.

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Girard Discusses Benefits Plans

CPBI Quebec will examine developing benefits plans tailored to the needs of businesses in Quebec. Louis-Philippe Corbeil Girard, an advisor at Gestion Tim Cummings, will discuss public and private sector plans and their management. It takes place April 28 in Montreal, QC. For information, visit http://www.cpbi-icra.ca/Events/Details/Québec/2020/04-28-Formation-Élaborer-un-régime-d-avantages

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February 19, 2020


Ransomware Fastest Growing Cybercrime

Cyber extortion continues to be a big concern for Canadian organizations, says Aon’s ‘2020 Cyber Security Risk Report.’ ‘Solving the Cyber Puzzle: The Unexpected Ways Cyber Risk Impacts Your Business’ says globally, ransomware is one of the fastest growing forms of cybercrime. In the last year, ransomware attacks have impacted both publicly traded and private companies of all sizes and across all sectors, resulting in losses in the millions. These types of attacks will not only undoubtedly continue, but will also evolve in terms of sophistication and level of maliciousness. Social engineering has also become an area of growing worry. Increasingly sophisticated and widespread social engineering schemes represent a significant risk for organizations and directors and officers. Any type of corporation can be the target of these types of scams, ranging from large corporations and tech companies to small businesses and non-profit organizations, often with their C-level executives being a specific focus. Losses from such schemes are costly and have created a demand for insurance solutions that can effectively mitigate the risk. Brian Rosenbaum, national cyber leader at Aon in Canada, says, “The majority of these claims are cyber fraud claims which include business eMail compromise, push payment fraud, and cyber extortion. In speaking with clients and prospects cyber risks have become very real. There are very few who have not experienced an attempted cybercrime of some nature. Organizations are taking these risks seriously, which has made risk mitigation and risk transfer discussions easier.”

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Women Underpaid In Investment Management Industry

Women working in the investment management industry in the U.S. are underrepresented and underpaid, says a survey by Odyssey Search Partners. It found that while women represent 26 per cent of total head count, just 11 per cent of investment team members are women. Base salaries for women averaged $127,000 for junior analysts and $200,000 for senior analysts/portfolio managers. Men, on the other hand, received average base salaries of $131,000 as junior analysts and $215,000 for senior analysts/PMs. Average bonus pay for female and male junior analysts was about the same at $160,000, but bonuses for female senior analysts/PMs averaged $430,000 per year compared with $610,000 for their male counterparts. Gender disparity in pay was most evident in average annual total compensation for senior analysts/PMs, with women taking home nearly $200,000 less ‒ $630,000 ‒ or 31 per cent lower than the $825,000 men in the same positions earned.

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Active Fund Have Weakest Month

Actively-managed equity funds in the U.S. fund industry had their weakest January on record, says Moody’s Investors Service. Investors pulled a record US$46 billion from long-term equity mutual funds in January, even topping withdrawals during the financial crisis. The negative outflows were somewhat offset by a strong performance for equity markets, which bolstered assets under management (AUM) and masked the effect of the poor sales. It’s also notable that the outflow occurred “during a period of relatively strong economic growth with volatility at relatively low levels,” it says. The flows into both passive equity and passive bond funds are seen as a clear market signal that consumers are continuing to show their preference for low-cost, passive beta products, regardless of changing market environments.

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Managers Remain Bullish On Global Economy

Money managers remain bullish about the global economy, just significantly less so than last month, says the Bank of America Merrill Lynch’s monthly fund manager survey. It shows a net 18 per cent of managers expect global growth to improve over the next year, down from 36 per cent last month yet still above 2019 lows. Meanwhile, inflation expectations dropped 17 percentage points from last month to a net 40 per cent of survey participants expecting a higher global consumer price index in the next 12 months. The survey also revealed that 67 per cent of fund managers expect below-trend growth and inflation over the next year, up five percentage points from January. The outcome of the 2020 U.S. presidential election remains the top tail risk among managers, at 26 per cent, followed by the bond bubble popping (22 per cent) and the coronavirus (21 per cent). A trade war with China is no longer among managers’ top concerns.

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CPBI Western Region Seeks Speakers

The CPBI Western Region is looking for speakers for its conference in 2021. With challenges and opportunities due to the increase in technology, the continued focus on wellness, and business and economic cycles peaking, it says planning and thriving in the next decade requires ‘Gaining an Edge in Uncertain Times.’ This is the theme of the April 28 to April 30, 2020, conference in Banff, AB. The conference’s program committee invites potential speakers to submit their speaking proposal by completing this form and submitting it to albertasouth@cpbi-icra.ca by September 1.

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League Adds New Partners

League Inc. has added a number of new health partners to its provider ecosystem. The partners were selected for their ability to have meaningful impact on employee health outcomes, strengthening its overall health benefits offering. The partner additions include eMindful – a provider of expert-led live, virtual and on-demand mindfulness sessions that can be applied to everyday life and chronic conditions to promote health, happiness, and performance; Vida Health – virtual health coaching for people with chronic and co-occurring physical and behavioural health conditions; Inkblot – a mental health benefits company primarily focused on virtual mental health services matching employees with licensed counselors and connecting them through secure video sessions, Akira ‒ a telemedicine provider that connects patients to primary care providers 24/7, by secure text or video, on the phone or computer; and Beacon ‒ a service that improves mental health by providing personalized digital therapy that’s guided one-on-one by an accredited therapist.

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Private Equity Fundraising Crosses Threshold

Private equity fundraising surpassed $500 billion for the fourth consecutive year in 2019, crossing the $4 trillion threshold, says the ‘2020 Preqin Global Private Equity and Venture Capital Report.’ Although total numbers are slightly lower than the previous year, the average fund size grew and the average time spent in market decreased to 13 months, the lowest level ever seen. This has helped to push the industry’s assets under management (AUM) across the $4 trillion mark and puts in on course to reach $5 trillion in AUM by the end of 2022. The asset class is benefiting in part from widespread anticipation of a market downturn among both fund managers and investors. Christopher Beales, executive editor of the report, says, “Investor demand has been strong and sustained and fund managers have been able to offer them robust returns even in a low interest environment, fueling a virtuous cycle of growth. But it’s not all good news: the fundraising marketplace is more crowded than ever before, making it difficult for fund managers to stand out and for investors to find the right funds for them.”

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ETFs Gather Inflows

ETFs and ETPs listed globally gathered net inflows of US$67.15 billion at the end of January 2020, says ETFGI. This was significantly higher than the US$17.23 billion gathered at this point last year. Assets invested in the global ETFs/ETPs industry increased by 0.4 per cent, from US$6.35 trillion at the end of December 2019 to US$6.37 trillion at the end of January.

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Franklin Acquires Legg Mason

Franklin Resources, Inc. will acquire Legg Mason, Inc. The acquisition of Legg Mason and its multiple investment affiliates, which collectively manage over $806 billion in assets as of January 31, 2020, will establish Franklin Templeton as one of the world’s largest independent, specialized global investment managers with a combined $1.5 trillion in assets under management (AUM). The combined footprint of the organization will significantly deepen Franklin Templeton’s presence in key geographies and create an expansive investment platform that is balanced between institutional and retail client AUM. In addition, the combined platform creates a strong separately managed account business.

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CGI Purchases Shares Back

CGI intends to enter into a private agreement with Caisse de dépôt et placement du Québec (CDPQ) for the purchase for cancellation of six million of its Class A subordinate voting shares. The transaction will be made in connection with the periodic portfolio rebalancing by the CDPQ. Once completed, CDPQ will continue to hold approximately 31.4 million Class A shares, representing approximately 11.9 per cent of CGI’s total outstanding shares.

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Noble Has New Duties

Mark Noble is executive vice-president, ETF strategy, at Horizons ETFs. He joined the firm in 2010 and was, most recently, senior vice-president, ETF strategy.

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Liquid Alts Featured

A liquid alts workshop and panel discussion will be featured at the ‘11th Annual Alternative Investment Outlook Forum.’ The event, hosted by CFA Vancouver, CAIA Vancouver, and AIMA Canada, will also look at the evolution of alternatives and private assets. It takes place March 10 in Victoria, BC. For information, visit http://campaign.r20.constantcontact.com/render?m=1116729122741&ca=d09468b7-1d36-48be-8a1e-686aca5c62bf

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February 18, 2020


Aging Population Increases LTD Demand

One of the main factors impacting demand for long-term care (LTC) is the aging population and the share of the population dependent on others, says the Organisation for Economic Co-operation and Development’s ‘Long-Term Care and Health Care Insurance in OECD and Other Countries.’ Some countries project the 65+ population will triple by 2050 (Costa Rica). Estonia, the Czech Republic, and Chile estimate that by 2040-2050 the population of 65+ will be around 30 per cent of the population, while Hungary estimates this to reach 24 per cent by 2030, and Switzerland eight to 10 per cent of the population by 2030. Other factors impacting demand are the decrease in family provided care, greater dementia care needs, and an increase in the number of special needs persons. While these are affecting the long-term care demand, the United States notes a sharp decrease in companies selling these products. Across the board, the increased share of the elderly population, prevalence of old age disability, increase of claim incidences, and challenges to fiscal sustainability are all increasing costs in all segments of long-term care while creating human resource problems and infrastructure insufficiency.

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Net Assets Grow For CPP

The Canada Pension Plan Investment Board (CPP Investments) ended its third quarter of fiscal 2020 on December 31, 2019, with net assets of $420.4 billion, compared to $409.5 billion at the end of the previous quarter. The $10.9 billion increase in assets for the quarter consisted of $14.5 billion in net income after all CPP Investments costs, less $3.6 billion in net Canada Pension Plan (CPP) cash outflows. CPP Investments routinely receives more CPP contributions than required to pay benefits during the first part of the calendar year, partially offset by benefit payments exceeding contributions in the final months of the year. On an annual basis, contributions to the fund continue to exceed outflows. The fund, which includes the combination of the base CPP and additional CPP accounts, achieved both 10-year and five-year annualized net nominal returns of 10.4 per cent.

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Companies Increase Focus On ESG

Companies are increasingly focusing on ESG, says a Fidelity International survey of its global analysts. With the rise in climate change awareness and corporate reform, 90 per cent of its analysts reported that some or all of the businesses they cover are upping their ESG game this year, 20 per cent more than 2019. While ESG (environmental, social, and governance) has been on the agenda for some time in Europe, it is now playing more of a role in Asia. In China, 80 per cent of the analysts reported an increase in ESG emphasis at some or all of their companies for 2020. In 2018, this figure was just 33 per cent. Emphasis is also on the rise in Canada and the U.S. Just over 90 per cent of the analysts covering the North American region cited a growing focus on ESG at companies, compared to under 60 per cent last year.

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UK Wants Pensions To Disclose Climate Change Efforts

The UK Department for Work and Pensions (DWP) has proposed an amendment to the upcoming pensions schemes bill that would require retirement plan executives to disclose how they invest to mitigate the impact of climate change. Under the planned amendment, asset owners in the UK will be required to additionally report on strategies they undertake to mitigate climate change, rather than solely how they implement environmental, social, and governance factors into their portfolios. The disclosures are intended to be made in line with recommendations set by a voluntary framework of reporting guidelines, developed by the Task Force on Climate-related Financial Disclosures (TCFD). Set up in 2015, TCFD reporting standards are universally used by banks, companies, and investors. The UK government wants to bring all greenhouse gas emissions in the country to net zero by 2050.

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Canadians Worried About Retirement Savings

While 68 per cent of Canadians are currently saving for retirement, 70 per cent are worried that they are not saving enough, says a ‘Scotiabank Retirement Survey.’ Its findings shows the average Canadian expects to need $697,000 in retirement savings, less than the average amount of $753,000 expected back in 2017. The ‘2019 Scotiabank Investment Poll’ suggests that retirement planning has taken a back seat due to more immediate financial priorities. Only 23 per cent of Canadians considered saving for retirement a top priority, down nine points from 2017. As well, 66 per cent of Canadians are concerned that they have underestimated how much money they will need in retirement and nearly half (47 per cent) are concerned they will need to rely on family for financial assistance. Of the 32 per cent of Canadians who are currently not saving for retirement, almost half (45 per cent) are between the ages of 18 and 35.

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Benefits Alliance Selects myHSA

The Benefits Alliance Group has selected myHSA as the preferred provider for self-funded employee benefits. The collaboration will lever a greater relationship and tools necessary for advisors to deliver employee benefits and products to group clients. Started in 2013, myHSA offers self-insured employee benefits spending accounts through a digital platform. The health and wellness spending accounts cover health, dental, vision, and wellness items.

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CDPQ Adds To Cirque Holdings

The Caisse de dépôt et placement du Québec (CDPQ) is increasing its stake in Cirque du Soleil Entertainment Group. As part of this transaction, it is acquiring the holdings of the company’s founder, Guy Laliberté, who will remain involved in the company’s creative process and retain economic interests. Following this investment, it will own nearly 20 per cent of Cirque du Soleil. Since CDPQ became a Cirque du Soleil shareholder in 2015, the company has made three acquisitions to diversify its product offering and markets.

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Henderson Joins People

Parker Henderson is director, partner relations, at People Corporation. He joins the firm from Sun Life where he was a group benefits account executive.

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Plan Communications Examined

‘Retirement Plan Communication: A Case Study’ is the focus of a CPBI Southern Alberta Region session. Brenda Mullen, an employee retirement plans consultant at BELAY Advisory, and Michel Cantin, regional sales director, western Canada, at iA Financial Group will use a case study approach to show how the same communication materials and strategies were positioned with each client yet deployed differently. It takes place March 19 in Calgary, AB. For information, visit http://cpbi-icra.ca/Events/Details/Southern-Alberta/2020/03-19-Retirement-Plan-Communication-A-Case-Study

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Commuted Value Interest Rate Assumptions

The interest assumptions required to calculate commuted values and marriage breakdown values for an event which occurs in any month up to and including February 2020 are now available at www.an-actual-actuary.com. An Excel spreadsheet on the website contains nine worksheets:
• Commuted Values February 2011 CIA
• Marital Breakdown: CSOP 4300 ‒ January 2012
• Ontario (Bill 133) Prior Rates – Rates for Ontario Marital Breakdown with valuation date prior to January 1, 2012
• Annuity Proxy for Solvency Calculations for Non-Indexed & Fully-Indexed Pensions
• Minimum Interest on Employee Required Contributions
• HISTORICAL Marital Breakdown: CSOP 4300 ‒ May 2009 (Now Frozen)
• HISTORICAL: Commuted Values ‒ 2009 Basis (Now Frozen)
• HISTORICAL: Commuted Values ‒ 2005 Basis (Now Frozen)
• HISTORICAL: Commuted Values ‒ 1993 Basis (Now Frozen)
You can use this spreadsheet to compare the interest rates which you may have calculated and/or you can download the spreadsheet to your own computer. Another actuary has already provided a peer review of the updated rates in this spreadsheet and determined that he/she agrees with the results.

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February 14, 2020


UTAM Commits To Carbon Footprint Reduction

UTAM has committed to a goal of reducing the carbon footprint of the pension and endowment investment portfolios by 40 per cent or more compared to 2017 levels by the end of 2030. Its ‘2019 Carbon Footprint Report ‒ Towards a Greener Future’ says this aligns with University of Toronto’s ‘Low-Carbon Action Plan’ which aims to cut greenhouse gas emissions by 37 per cent from 1990 levels by 2030 and put it on a path to becoming a net-zero institution. These goals exceed the national reduction target of 30 per cent set by the government of Canada. It has also, for the first time, endorsed the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). The endorsement makes the university (through UTAM) the first Canadian university to endorse the TCFD recommendations on behalf of its pension and endowment funds, joining the ranks of over 930 public and private sector organizations in supporting the initiative. Beginning in 2020, UTAM will provide reporting following the TCFD framework. In the 2019 report, it expanded the scope of its analysis to include not only public equities, but also private equity, private real estate, and private infrastructure investments. The results provide a more accurate and complete picture of the carbon footprint of the assets in these portfolios.

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Failure Of ‘Comply or Explain’ Answers Sought

The Conference Board of Canada is looking for answers for why Canada missed its national target of 30 per cent women on boards by 2019 and how advancements are otherwise made in women’s representation. ‘All on Board – Turning Evidence into Action for Women’s Leadership’ aims to fill the knowledge gap. Specifically, the research will look at the effectiveness of the 2014 Canadian Securities Administrators ‘comply or explain’ disclosure requirement for women’s representation on corporate boards between 2015 and 2019. Findings of this research will be released later in the spring. “It’s important to know whether different policies and regulations actually make a difference in giving a voice to more people of different backgrounds and identities,” says Dr. Maria Giammarco, senior research associate at the Conference Board of Canada. “This project is an opportunity to look at how behaviour – whether people’s behaviour or organizational behaviour – can change for the better. One important step in answering bigger questions around diversity and inclusion is to understand what works for women’s leadership.”

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ESG Integrations Leads To Fixed Income Outperformance

There is evidence that ESG integration leads to outperformance of fixed income portfolios while also having benefits for issuers, says a study by Amundi. ‘ESG Investing in Fixed Income: It’s Time to Cross the Rubicon’ says Euro-based investment grade corporate bonds, for example, saw a 37 bps (basis points) outperformance annually over the past five years in a sample long/short portfolio that compared best-in-class with worst-in-class ESG-scored bonds. It says ESG integration in fixed income was so far less developed partly because ESG filters can lead to significant exclusions or underweighting within sovereign bond portfolios, which curtails liquidity. The study adds to the argument that ESG bond screening should be more widely adopted.

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BCI In Credit Agreement

Knightsbridge Capital Group, an asset-based lender based in Vancouver, BC, has entered into a credit agreement with British Columbia Investment Management Corporation (BCI) for a $100 million operating facility to leverage one of its asset-based funds – Maynbridge Capital Inc. Dean Shillington, president and founder of Knightsbridge Capital Group and Maynbridge Capital Inc., says “this facility will allow us to grow our platform and continue supporting businesses across the country through challenging times.”

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Rowe Joins Medavie

Jennifer Rowe is chief brand and reputation officer at Medavie. She brings extensive provincial, national, and international executive and senior leadership experience in marketing and corporate affairs in the insurance and financial sectors to the position.

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Communications Best Practices Presented

The ACPM Atlantic Regional Council is presenting a session on ‘Best Practices for Plan Member Communications.’ Blair Richards, CEO of the Halifax Port ILA/HEA Pension Plan, and Hugh Wright, a partner at McInnes Cooper, will tackle the topic of member communication to provide helpful perspective, insight, and guidance that can be applied to any communication plan. It takes place April 15 in Halifax, NS. For information, visit https://www.acpm.com/ACPM/Events/Regional-Events/Atlantic-Council-Event.aspx

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