A consultation paper by the U.K. government is considering how defined contribution plans could incorporate more illiquid investments. Specifically, the consultation’s proposals include requiring larger DC plans to set out their policy and current practice for illiquid investments and report on it annually. It also proposed requiring smaller DC plans to conduct a triennial assessment […]
When the Canada Pension Plan enhancement took effect on Jan. 1, 2019, did you feel the pinch in your first paycheque of the year? The answer is probably no. In the first stage of enhancement, employee and employer contribution rates will rise from 4.95 per cent each to 5.95 per cent each, for a total […]
While defined contribution plans can currently pay variable benefits to members at retirement in British Columbia, Alberta, Saskatchewan, Manitoba, Quebec and Nova Scotia, the Ontario government is moving forward with legislation to allow the option. But are DC plan sponsors actually interested? Michael Dodd, director of pensions, treasury and shareholder services at the Co-operators Group […]
While the Canadian retirement income system is performing well overall, it still requires some assessment to determine its primary goals and how changing one part of the system may affect the other parts, according to a new report by the Office of the Superintendent of Financial Institutions. “Basically, what we’re trying to say [in the report] […]
The high discount rates used by many Canadian public-sector pension plans increase the risk they won’t have enough funds to meet future obligations, according to new research by the C.D. Howe Institute “Employers and employees have an incentive to keep the discount rate high in order to reduce the contributions they pay today,” said Constance Smith, co-author […]
The introduction of more flexible annuity options for capital accumulation plans and reform to prescription drug coverage are among the recommendations by the Canadian Life and Health Insurance Association for the 2019 federal budget. In a letter to the Ministry of Finance, the CLHIA highlighted the increasing need for Canadian retirees to convert some or all of […]
The Association of Canadian Pension Management is calling on the federal government to take caution in creating any new significant disincentives “that would push more corporations to abandon their DB plans.” In its response to the government’s consultation on enhancing Canadians’ retirement security, the association said the best protection for workers’ and retirees’ pensions is a strong employer. […]
The Canadian government is “thinking outside of the box” with its proposal to extend the Bank of Canada’s program on dormant bank accounts to include unclaimed pension plans, says Kathy Bush, interim vice-chair of the national policy committee at the Association for Canadian Pension Management. Last June, the government launched consultations around whether it should tax and reduce interest paid to unclaimed pensions […]
The Pension Investment Association of Canada isn’t supportive of providing a super-priority for unfunded pension liabilities and other post-retirement benefits in an insolvency situation. “While we recognize that the intention of such a change would be to enhance retirement security for plan beneficiaries, we believe that overall impact on the retirement income system would be negative,” […]
Any modifications to federal pension legislation should encourage plan sponsors to continue offering defined benefit pension plans, while helping them fulfil their pension promises to plan members, according to the Canadian Institute of Actuaries. “Fulfilling pension promises is especially important for those plan members who can least afford the risk of benefit reductions, such as those with […]