There is an estimated $300 million per year available for GST/HST pension entity rebates—an average of approximately $25,000 per eligible plan—but much of that money may not be recovered for plan fiscal years ending in 2010. Pension entities can now claim 33% of GST/HST paid by the plan, plus the amount of any GST/HST deemed […]
Transparency and good governance influence how Canadian pension plan sponsors manage their plans. While many continue to choose service providers via transparent internal processes, plan sponsors are increasingly employing consultants to run request for proposal (RFP) processes—a practice that offers the consultant a significant voice in how the plan assesses potential service providers. For this […]
In a capital accumulation plan (CAP), there will be two types of members: those who are engaged and understand enough basic investment concepts to do it themselves; and those who are unengaged and would rather not learn how to invest and make investment decisions. Compounding problems for the unengaged member is a tendency for engaged […]
Is bigger better? That’s the question posed by Alexander Dyck and Lukasz Pomorski, professors of finance at the Rotman School of Management, University of Toronto, in their study, Is bigger better? Size and Performance in Pension Plan Management. The authors concluded that larger plans outperform smaller ones by 43-50 basis points per year due primarily […]
Canadian pension plans may have more members, but their numbers make up a smaller percentage of the overall labour force. And while the number of DB plans in the private sector has significantly decreased in favour of DC and hybrid plans over the last decade, the number of DB plans in the public sector has […]
A growing number of U.S. pension plans are investing in hedge funds and private equity funds, reports the U.S. Government Accountability Office (GAO). According to a GAO survey of large plans, the share of plans with investments in hedge funds grew from 11% in 2001 to 60% in 2010. Investments in private equity also grew […]
The Office of the Superintendent of Financial Institutions Canada (OSFI) has released a policy advisory to provide further detail on its expectations with respect to consent benefits. The policy advisory clarifies OSFI’s stance on benefits that are subject to a plan administrator’s consent, such as early retirement benefits. According to the document, OSFI has found […]
More U.S. pension plans are investing in alternatives, according to a recent poll by SEI. Seventy-eight percent of pension executives surveyed by SEI’s Quick Poll reported their organization had some allocation to alternative investments, up from 65% in 2010. However, while more plans appear to be using alternative investments, allocations greater than 10% of the […]
A major challenge for those designing Towers Watson’s new Canadian retirement program was that there were more than 400 benefits-savvy associates looking over their shoulders. Towers Perrin and Watson Wyatt announced their merger in June 2009, with a January 2010 closing date. Work started on developing the merged consulting firm’s new pension plan in April […]
The 2008 financial crisis jeopardized the funding ratio (i.e., the ratio of assets to liabilities) of most DB pension plans, forcing plan sponsors to inject money or cut benefit provisions—or both. Plan sponsors now want greater certainty about their funded status. That’s where liability driven investing (LDI) makes sense and why it will become a […]