Phased retirement changes have been passed into law in Quebec with some modifications, according to a Mercer Communiqué.
Under the new rules, plan members can, subject to certain conditions, receive a pension from a defined benefit (DB) plan or a benefit from a defined contribution (DC) plan while employed. These provisions apply to both private and public pension plans including Crown corporations and universities.
The Communiqué says a member of a DB plan or the DB component of a combination plan who remains in the company’s employment or returns to work following retirement may receive a phased retirement benefit if such member is at least age 60; or is at least age 55 and entitled to an unreduced pension; and has not reached age 65.
The terms and conditions of the phased retirement benefit are stipulated in the agreement with the employer, and plan members are not entitled to receive both a phased retirement benefit and another benefit under the plan at the same time (except for a phased retirement benefit payable under a DC component of the plan).
The phased retirement benefit ends on the earlier of the date the plan member reaches age 65 and the date the member’s retirement pension begins or recommences. From age 65, the provisions concerning postponed retirement apply, and the plan can provide for the accrual of benefit entitlements during the phased retirement period.
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Federal Wage-Protection Program Announced
The federal government has launched a program aimed at protecting workers’ wages when their employer is declared bankrupt or is subject to receivership.
The Wage Earner Protection Program (WEPP) will provide guaranteed and timely payment of unpaid wages and vacation pay to eligible workers whose employers go bankrupt. “Through the Wage Earner Protection Program, workers in Canada will have their salaries protected and their rights safeguarded,” says Jean-Pierre Blackburn, Minister of the Economy Development Agency of Canada for the Regions of Quebec.
According to Human Resources and Social Development Canada, between 10,000 and 20,000 workers make claims for unpaid wages every year.
Under the previous system, only a quarter of workers received payment, and they often had to wait up to three years. Those who did receive compensation usually only got a portion of their claim.
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Minority Reports
Northern Trust announced today that it has introduced five new reporting templates to determine the use of minority- and women-owned firms to execute trades on behalf of the fund.
Regulatory and legislative mandates increasingly require American public entities to source a portion of their activities to designated minority-owned firms, and the new templates will allow plan sponsors to view data aggregated across multiple investment managers, according to a statement.
“These new reports creatively combine traditional custodial trade data with minority sourcing information in a way that demonstrates Northern Trust’s commitment to enriching the value of reporting through Passport, our online data delivery platform,” says Peter Cherecwich, Northern Trust’s global head of asset servicing product management.
Northern Trust has engaged CVM Inc., a minority-owned firm and leader in minority business sourcing, to collect and provide minority-owned classification information from approximately 300 certification sources across the United States.
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U.K Pension Funds Shift into Bonds
Nearly half of pension fund managers in the United Kingdom have undertaken an investment shift from equities to bonds during the past 12 months, according to a poll by Aon Consulting.
Forty-six percent of funds surveyed said they had reallocated investments from equities to bonds, with 26% of those saying they had reallocated a major shift (more than 10% of growth assets) from equities to bonds and the same proportion describing a minor shift (less than 10% of growth assets). Fifty-four percent had made no change at all to their investment strategy.
The survey also found that pension funds have adopted a wider range of diversifying asset classes, with real estate making up almost half (44%) of such assets. Diversified growth funds are also growing in popularity, with 40% of funds saying they had invested in private equity or hedge funds, and 20% investing in diversified growth funds.
In comparison, liability driven investment (LDI) has not grown significantly. The 2008 LDI investment level of 13% remains at similar levels to Aon’s 2007 survey. The stagnation is largely due to the relatively low levels of long-term interest rates, keeping the price of LDI strategies too high for many trustees and sponsors.