Increased economic growth and stock market gains have pushed the Russell Financial Health Index (RFHI) to its highest level since the fourth quarter of 2008.
Based on an online calculator that gauges the overall financial health of Canadian investors, the RFHI is currently up to 51.1 points from its low of 47.9 points in the third quarter of 2009 (higher points means greater financial optimism).
“The Russell Financial Health Index has helped Canadians get a better understanding of their financial situation so that they can take action and start planning for a financially healthy retirement,” says Fred Pinto, managing director of distribution services at Russell Investments Canada Ltd.
According to Russell, investors who recently used the online calculator displayed less concern across most of the 11 potential areas of financial concern that are listed in the RFHI. “Having sufficient income to cover essentials” saw the greatest decrease in concern among Canadians.
Investors are also less concerned about having enough income for their lifestyle in retirement, riding out Canada’s economic performance and having a reliable source of income.
The issues that are keeping Canadians up at night are “having the ability to leave assets/inheritance to beneficiaries,” which saw a notable increase in concern, “finding reliable professional advice” and “worries about the financial impact of medical issues and healthcare needs.”
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Changes proposed to IAS 19
The International Accounting Standards Board (IASB) has issued its Exposure Draft of proposed changes to IAS 19, Employee Benefits.
According to a bulletin by Towers Watson, although IAS 19 applies to companies following International Financial Reporting Standards (IFRS), publicly held companies reporting under U.S. Generally Accepted Accounting Principles (GAAP) should consider the implications of the proposed changes in light of the Security and Exchange Commission’s commitment to the convergence of U.S. GAAP with IFRS.
The firm explains that the proposed changes represent an evolution of IAS 19 intended to improve transparency, eliminate choice and make short-term fixes. Although substantially more limited in scope than initially contemplated in the discussion paper, the proposed changes could still significantly affect plan sponsors’ financial reporting and the information disclosed about.
Companies should analyze and understand the implications of the proposed changes on their financial statements, and the effort and cost that would be incurred to prepare the proposed disclosures.