PPE Coverage Undetermined

As things start to slowly return to a new normal, services such as massage, dental ,and other medical services are starting to open up. With this increased usage comes claims, says Dave Patriarche, president of Mainstay Insurance and founder of the Canadian Group Insurance Brokers (CGIB). And with the increase in claims, questions are arising about COVID surcharges. While organizations like the Ontario Dental Association (ODA) have added PPE (personal protection equipment) codes to their fee guide in preparation for the expected increased costs being borne by their members, the Canada Revenue Agency (CRA) has yet to determine if the claims for these can be reimbursed by employer benefit plans. Generally, he says, extra charges over the reasonable and customary (R&C) fees and over provincial dental fee guides are not eligible for reimbursement by plans. This is to protect benefit plans from abuse and overcharging, thereby keeping them affordable. Currently PPE is not an eligible medical expense so CRA would need to make some changes before plans would be allowed to pay. It is not as simple as asking for an exception, or running all of these amounts (if over 10 per cent of spend) through an healthcare spending account, as it could be offside and potentially make plans taxable, he says. What is needed is some clear direction.

FSRA Seeks Missing Member Feedback

The Financial Services Regulatory Authority of Ontario (FSRA) is seeking feedback on two guidance documents. ‘Principles and Practices Regarding Missing Members’ sets out principles and practices for pension plans, advisors, and plan members to remain in contact or reconnect with their plans. This is to help ensure members receive their benefits when they fall due. ‘Waiver of Biennial Statements for Missing Former and Retired Members’ outlines its process to apply to waive the requirement to issue a biennial statement under the Pension Benefits Act. FSRA will begin collecting data on missing members from plan administrators as part of the regular data collection process, to inform future initiatives, and to evaluate the effectiveness of these new guidance documents. These datapoints are not intended to create additional administrative burden. It will begin collecting information about missing members later this summer on a voluntary basis to ease the transition and allow the sector to become familiar with the process. Comments can be submitted via the FSRA website until September 20, 2020.

PE Doesn’t Outperform

Private equity (PE) funds have not outperformed U.S. stocks, says a report from Ludovic Phalippou, professor of finance at the University of Oxford, Saïd Business School. His analysis shows that large pension funds have earned about $1.5 (net of fees) per $1 invested in private equity funds since 2006 and this return is about the same as what public equity has returned. Average private equity fund returns net of fees, both pre-2006 vintages and post-2006 vintages, are within one per cent per annum of the net returns of both the oldest passive mutual fund investing in small stocks and the oldest active mutual fund investing in small stocks. “Hence, both before and after 2006, PE [private equity] funds have performed in line with comparable publicly traded stocks,” the report says. The paper makes a point that the public equity portfolio of institutional investors is usually internationally diversified while the private equity portfolio is mostly invested in the U.S. “As U.S. stocks have outperformed non-U.S. stocks, institutional investors who simply compare their public equity with their private equity returns, without separating the U.S. and non-U.S. components, see a higher past performance in private equity, leading to the often-heard statement that PE has been the highest performing asset class for institutional investors,” it says.

Tablet Revolutionizes Technology

Benji Sucher, founder and general partner of Radical Ventures, was in Chicago, IL, when the first iPhone came out. Even though it was not yet in Canada, he bought one. Several years later, when the first tablet came out, his wife wondered why anyone would use a small screen when they could use a laptop, he said in the ‘Is AI Really Taking Over the World? A Discussion of Trends in the Funding, Development and Commercialization of the AI Ecosystem’ at the Toronto CFA Society ‘2020 Annual Pension Conference.’ “It turns out the tablet has obviously revolutionized what you can do on the go,” he said. However, it is not necessarily the tablet itself, but what it represents. The technology adoption occurring now is being accelerated and pushed forward and this rapid acceleration and pace of technology continue to occur.” This includes AI (artificial technology). AI is, essentially, anything that a computer does that exhibits human intelligence. It’s computers that are now learning on their own and it’s going to revolutionize what mankind understand, he said.

Lemay Gets Loan

Caisse de dépôt et placement du Québec (CDPQ) has loaned $ 8.7 million to Lemay, a Canadian architecture and design firms. This will enable it to pursue its growth plan, which is focused on bolstering its capacity for innovation and its position in the field of sustainable design. Over the years, it has pursued its ‘Net Positive’ program, which entails systematically assessing the impact of every project on health, the environment, and carbon reduction, with a view to improving the quality of urban spaces.

Oikawa Joins Morneau Shepell

Glen Oikawa is Calgary, AB, office leader; client relationship partner; and an actuary at Morneau Shepell. Previously, he spent almost 16 years at Aon as a pension consultant and actuary.