b&pm - but what does it mean (june14)
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Benefits and Pensions June 2014Volume 24, Number 4
The Canadian Magazine Of Employee Pension Fund Investment And Benefits Plan Management
www.bpmmagazine.com
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EMPlOyEr’s rOlE InrETIrEMEnT InCOME pg 24
sOCIAl MEdIA:A GAME-ChAnGEr pg 32
AnnuAl rEPOrTOn lEGAl FIrMs pg 36
Benefit & PensionCONSULTANTS
Annual Report & Directory
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June 2014 | Benefits and Pensions Monitor 3
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dEPArTMEnTs4 EDITORIAL
6 PEOPLE
8 nEWS
9 TREnD SPOTTIng
10 HEALTH MATTERS
45 COnfEREnCES
46 THE BACK PAgE
FEATurEs13 BEnEfIT & PEnSIOn COnSuLTAnTS AnnuAL REPORT & DIRECTORy BuT WhAT dOEs IT rEAlly MEAn?’ Chris Bonnett
16 BEnEfIT & PEnSIOn COnSuLTAnTS DIRECTORy
24 DC PEnSIOnS lEvEl OF rETIrEMEnT InCOME: WhAT Is ThE EMPlOyEr’s rOlE? Eric Tardif
26 InVESTMEnT rIsInG rATEs ArE On ThE hOrIzOn: hOW ABsOluTE rETurn sTrATEGIEs BEnEFIT FIxEd InCOME POrTFOlIOs Ben steiner & Alex Johnson
29 InVESTMEnT FIrE! FIrE! Is lOW vOlATIlITy A CrOWdEd TrAdE? harry Marmer
32 TECHnOLOgy ThE GAME-ChAnGInG COnvErsATIOn nathalie laporte & Éric Filion
35 PEnSIOnS ThE nEW B.C. WIlls, EsTATEs, And suCCEssIOn ACT: WhAT IT MEAns FOr PEnsIOn PlAns rupe Prasad & sonia Massicotte
36 BEnEfITS & PEnSIOnS LEgAL fIRMS AnnuAL REPORT & DIRECTORy lEssOns On PEnsIOn PlAn GOvErnAnCE FrOM IndAlEx Ian Mcsweeney & louise Greig
39 BEnEfITS & PEnSIOnS LEgAL fIRMS DIRECTORy
42 BEnEfITS hEAd TO TOE rETurn yolanda Billinkoff
44
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Bruce Curwood, Russell Investments
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Mike gillis, greystone
Bruce grantier, InvestorLit
greg Hurst, greg Hurst & Associates
Joan Johannson, Johannson Consulting
Marilyn Lurz, Lynmar Associates
Karen Matsubayashi, TD Bank group
Mark Newton, Newton HR Law
Hugh O’Reilly, Cavalluzzo Shilton
McIntyre Cornish
graeme Ozburn, RBC
Ted Patterson, Humber Centre for
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Stuart Plummer, CIBC Mellon
John Poos, george Weston
Angela Vidakovich, Brookfield
Robert Weston, OMERS
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4 Benefits and Pensions Monitor | June 2014
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| EDITORIAL |
Volume 24, Number 4 June 2014
Past performance is no predictor of future performance.
That is the caution that every single money manager makes to their clients when presenting their historic performance. It is a legal thing which enables them to protect themselves against any-
one who wants to sue them because they didn’t get the returns they expected based on previous performance.
But, there are cases where past performance is a clear indi-cator of future results and the current state of defined benefit pension plans is a perfect example. And there are other cases where we are so hung up on the past that we can’t contemplate anything different in the future.
So let’s begin.At a Queen’s Centre for Law in the Contemporary Work-
place pension conference recently, Murray Gold, of Koskie Minsky, outlined his objections to New Brunswick’s shared risk pension plan model. With these plans, the province has broken a fundamental pension promise, he said. An historic (emphasis on historic) bedrock of pension legislation is that accrued pen-sion benefits are protected by statute. Once earned, they cannot be reduced. However, the conversion to shared risk, in fact, puts the accrued benefits of employees at risk, he said.
Etched In StoneSo there is part of the problem. History says accrued pension
benefits are etched in stone, the 11th commandment, if you will.But, they’re not, never have been. Just ask any Nortel worker
if their pension benefits were etched in stone. In hindsight, the biggest benefit of the New Brunswick shared
risk plans is that it was the result of combined efforts by the employers, employees, and government. Rather than get bogged down on historic bedrocks, they found a way to dig themselves out and find a common solution. Unfortunately, as is often the case, it was do or die – either change the pension structure or face a future
with greatly reduced or no benefits, proving once again the threat of financial failure is perhaps the greatest motivator for change.
But does that have to be the case? At the same conference, Jo-Ann Hannah, director, pensions and benefits, for UNIFOR, talked about efforts that her union is prepared to make to save DB plans and employee pension plans. This includes discussing shared risk plans. The question is, are they prepared to act now, before DB pension costs threaten the viability of an employer, or wait until it is on the brink?
Potential LiabilityThe situation today is entirely due to past performance. It
was labour negotiations where unions and employers traded a bit of pay for better pensions and pension benefits. Perhaps they didn’t appreciate that while there is pension plan solvency, there is no solvency funding for a company payroll. There are no actuaries trying to figure out how much money a company needs to cover its payroll obligations for as long as its current labour force is working. There are no surplus issues.
Would it have been worth more pay over the last 30 years to get out from under a big pension liability? That is perhaps the subject of a think-tank study. However, perhaps if we had been paying more in wages, instead of future wages, some of those employees may have started putting a little aside for their future retirement. It’s possible. BPM
Breaking With The PastBy: Joe Hornyak, Executive Editor
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Group Retirement Solutions and Group Benefits products are offered through Manulife Financial. © 2014 The Manufacturers Life Insurance Company. All rights reserved. Manulife, Manulife Financial, the Manulife Financial For Your Future logo and the Block Design are trademarks of The Manufacturers Life Insurance Company and are used by it, and by its affiliates under license.
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| PEOPLE |
Moore Segall
Bauslaugh Humphrey
Plotkin Bhaduri
Bang McCreadie
Sylvia Boyle
GEGeoff Moore is a senior vice-president and institutional sales leader – Canada at GE Asset Management (GEAM). Based in its Montreal, QC, office, he has overall responsibility for managing and growing its institutional business in the Canadian market. He has over 20 years of experience in the asset management industry serving clients and consultants in Canada.
GreystoneSimon Segall is vice-president, busi-ness development, at Greystone Man-aged Investments Inc. Prior to joining the firm, he was the CEO and head of sales at BNP Paribas Investment Part-ners Canada Ltd. He has worked as a sales executive with a number of other investment managers and as a consultant within the industry.
AGFKevin McCreadie is president and chief investment officer at AGF Invest-ments Inc. In this role, he will provide direction and leadership to its invest-ment management teams and lead the firm’s global institutional business. He brings more than 30 years of investment management experience to AGF, with extensive expertise in retail and insti-tutional asset management and direct portfolio management as well as over a decade of experience as CIO for a major U.S. financial services firm.
Sun Life Carl Bang is president of Sun Life Invest-ment Management Inc. He is the executive leader responsible for investment strategy, product, business development, client relationships, and operations for its new third-party asset management business in Canada.
CPBI Hall Of FameRandy V. Bauslaugh, a partner and the national leader of the pensions, benefits, and executive compensation practice at McCarthy Tétrault, and Burk Humphrey, an associate partner at Aon Hewitt, are the 2014 inductees into the CPBI Hall of Fame. Baus-laugh has been a CPBI member since 1987 and served as chair of the Ontario
man in 1997. He was also chairman of the CPBI national board of directors from 2007 to 2009.
MackenzieChris Boyle will join Mackenzie Invest-ments as senior vice-president, insti-tutional, in August. He brings 20 years of experience in the financial services industry to the position, most recently as senior vice-president of institutional business at AGF Management.
OncidiumJudith Plotkin (MSW) is executive vice-president of Oncidium, a national health and disability provider. She will be responsible for strategic development throughout Canada. She was previously with firms such as Homewood Health and Shepell.fgi where she headed both growth and operational divisions.
SigmaDr. Ranjan Bhaduri is chief research officer for Sigma Analysis & Man-agement. Previously, he was the chief research officer at AlphaMetrix Alter-native Investment Advisors, where he designed and led an institutional due diligence and research program.
Empire LifeMark Sylvia is president and chief executive officer of the Empire Life Insurance Company. He was previously president of Clarity Underwriting Man-agers Inc., an insurance consultancy firm he founded in 2010.
HealyPriscilla H. Healy is continuing her pen-sion legal practice under her name. The new firm provides pension and retire-ment related legal advice. Her niche is individuals and small businesses. Most recently, she was a consultant in the area of pensions and benefits at Fogler, Rubinoff LLP. BPM
regional council from 1995 to 1997. Humphrey has been involved with the CPBI since 1996. He was a member of the Pacific regional council where he held various positions, including chair-
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Job Number: 10192892 Suffix: Business as Unusual Benefits and Pensions
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| NEWS |
CAP Replacement Level Slips
Replacement income levels generated by capital accumulation plans (CAP) declined to 63 per cent in the first quarter of 2014, says Eckler’s ‘Capital Accu-mulation Plan Income Tracker (CAPit).’ While investment returns were strong in the quarter, the drop (from 64 per cent in the last quarter of 2013) was driven by a combination of lower interest rates which raised annuity prices, and wage increases. A variety of factors influence replacement income levels generated by CAPs, including interest rates, contribu-tion levels, fees, investment returns, and changes to members’ pay. BPM
8 Benefits and Pensions Monitor | June 2014
Homewood Acquires OHI
Homewood Health Inc. has acquired Organizational Health Inc. and Orga-nizational Health (Ontario) Inc. (OHI), providers of disability management ser-vices, employee and family assistance programs, substance management ser-vices, and a growing suite of organiza-tional wellness services. OHI is head-quartered in Edmonton, AB, and has offices in Vancouver, BC, and the greater Toronto, ON, area.
‘SmartPATH 2.0’ Earns Awards
‘SmartPATH 2.0,’ Great-West Life’s interactive online retirement education, planning and saving resource for group retirement plan members, has earned Communicator Awards of distinction in the categories of interactive multi-media education and financial services web-sites. “We created ‘smartPATH 2.0’ to help employers engage plan members in a memorable way and to encourage those members to embrace planning for their financial futures,” says Jeff Aarssen, senior vice-president of group retire-ment services for Great-West Life. Pre-sented in a first-person point of view, its immersive virtual neighbourhood can be customized to reflect the details of each participating employer’s group retire-ment and savings plan.
Business Needs Healthy Workers
To compete today, businesses need employees who are healthy, engaged,
and productive. “Yet all of these quali-ties are negatively impacted by stress,” says Alan Torrie, president and CEO of Morneau Shepell. Speaking at INK+BEYOND, the Canadian newspa-per industry’s annual conference, he said “since 2009, our cases from employee assistance calls have shown a signifi-cant increase in workplace stress, a dou-bling of cases from financial stress, and a tripling of cases from personal stress.” At the same time, the conversation in Canada about the relationship between stress, mental health, and the workplace – and very specifically, the impact of stress on workforce productivity in Can-ada today – needs to intensify.
Pavilion Adds Investment
Consulting FirmPavilion Financial Corporation has acquired LP Capital Advisors (LPCA), an investment consulting firm. Established in 2004, LPCA provides professional ser-vices to institutions investing in various alternative asset classes. Clients include several of the world’s largest public pen-sion plans, sovereign wealth funds, high net worth family offices, and other orga-nizations that typically deploy up to $5 bil-lion annually into alternative assets. Head-quartered in Winnipeg, MB, Pavilion offers institutional investment consulting through Pavilion Advisory Group.
AddendaThe following listing was not available at press-time for the 2014 Real Estate and Alternative Investment Managers Annual Report and Directory in the May issue of Benefits and Pensions Monitor.
AURION CAPITAL MANAGEMENT INC. Grant Bunker, Vice-president, Busi-ness Development, 120 Adelaide St. W., Ste. 2205, Toronto, ON M5H 1T1 PH: 416-866-2445 Fax: 416-363-6206 eMail: [email protected] Web: www.aurion.ca Alternative Assets Under Management: $1,020.64M Ownership: Principals - 40%, Third-party - 60% Managed Since: 1984
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employees’ lack of understanding on the value of the organization’s total reward program (50 per cent). It also found less than half of those surveyed (49 per cent) had a written global benefits strategy in place at their organization and more than 60 per cent faced issues regarding global benefits administration efficiency.
Benefits Cost Stabilizes
The cost of providing employee health-care benefits has stabilized around the globe, says a survey by Towers Watson. However, the ‘2014 Towers Watson Global Medical Trends Survey’ suspects a new round of increases may be on the horizon for employers. The survey also found that health promotion and well-ness programs are becoming more wide-spread in all regions as employers look to supplement traditional cost manage-ment tactics to contain rising costs. The cost of employee healthcare benefits is projected to increase 8.3 per cent glob-ally this year, slightly higher than the 7.9 per cent and 7.7 per cent increases expe-rienced in the past two years.
Pension At 70 Criticized
The Australian government is being criticized for its plan to raise the state pension age to 70. Increasing the pen-sion eligibility age to 70 by 2035 was a
budget measure to help Australia cope with the costs of an aging population. Critics argue it is unfair for those in physically demanding jobs, the poor, and indigenous people. The govern-ment contends Australians should no longer be retiring at a pension age that was set when their life expectancy was 55 years. Average life expectancy in Australia is now 85.
ETF Use IncreasingThe use of exchange-traded funds (ETFs) by institutional investors is increasing, says a Greenwich Associ-ates’ report. ‘ETFs: An Evolving Tool-set for U.S. Institutions’ shows that as recently as 2011, fewer than 15 per cent of U.S. institutions were using ETFs in their portfolios. This reached 21 per cent in 2013.
Search For Yield Continues
Institutional investors continue to search for yield in multi-asset strategies and alternatives, says Mercer. Its ‘2013 Global Manager Search Trends’ report shows overall search activity was similar to that in 2012, with 760 total searches last year compared with 776 in 2012. Search activity across Asia, Europe ex-UK, and the UK increased, while the number of searches in Australia and North America declined. BPM
Norway Should Look To CPPIB
The Norwegian Ministry of Finance and Norges Bank Investment Management should look to Canada for inspiration on how to better manage the Government Pension Fund Global, says a review by three international experts. Andrew Ang, the Ann F. Kaplan professor of business at Columbia Business School; Michael Brandt, Kalman J. Cohen professor of business administration at the Fuqua School of Business at Duke University; and David Denison, former president and CEO of the Canada Pension Plan Investment Board; recommend that the fund should take more risk and should adopt a cost management model that was pioneered by the CPPIB. In the review, they wrote that the opportunity cost model “represents a compelling alterna-tive to traditional asset class portfolio construction and investing.” The model uses a consistent and coherent frame-work to analyze and benchmark invest-ment decisions across private markets and some parts of the public markets.
Multi-nationals Face Benefit Challenges
The majority of multi-national busi-nesses are facing significant challenges with administering, communicating, and engaging employees when it comes to benefits packages, says a study from Thomsons Online Benefits. The ‘Global Employee Benefits Watch 2014’ report found that the most commonly cited challenge regarding global benefits strategy for multi-nationals was their
| TREND SPOTTING |
June 2014 | Benefits and Pensions Monitor 9
For FREE Daily News Alerts, visitwww.bpmmagazine.com/benefits_news.php �
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longed nose bleeds, bleeding from gums, prolonged bleeding from minor cuts, and heavy or prolonged menstrual bleeding.
Money MattersAs might be expected, both the individual who is living with
hemophilia and their family members commonly experience a myriad of emotions throughout their lives. For those relying on regular employment income, there is often an ever-present concern that a ‘catastrophe’ will strike at any time. Sometimes aspirations and career plans are interrupted and quality of life is compromised.
Physical limitations may occur as individuals living with hemophilia age and lose mobility and dexterity, often making adjustments to the physical environment at home and accom-modations in the workplace a necessity to minimize risk of injury. If an injury does occur as an employee with hemophilia ages, they might require extended time off work to heal, par-ticularly if internal bruising has occurred.
Advances And Treatment These days, people with bleeding disorders are living longer,
better lives thanks to specialized healthcare. Factor replace-ment therapy is the usual treatment for patients as it replaces the missing clotting factor.
Scientists understand the causes and now have the ability to detect and eliminate the inhibitors found in many hemophilia patients to significantly reduce risk factors. In fact, children
who start appropriate treatment early and maintain it will most likely experience fewer breakthrough bleeds and less
secondary complications than their predecessors.As with many conditions, strict adherence to the
prescribed treatment plan and getting regular medi-cal screening to detect other illnesses at an early, potentially treatable stage are measures to avoid complications. Exercise, once discouraged, and a healthy diet are now considered key elements of a well-managed treatment plan and living well with the condition. And, the concerns of aging with a
blood disorder, while seemingly a long way off for many, can be reduced through forward planning for
appropriate living arrangements near appropriate health-care resources and strategic lifestyle management. BPM
John is a Manitoba resident and is just one of 3,000 Canadians currently living with hemophilia. Accord-ing to Christine Keilback, executive director of the Canadian Hemophilia Society, Manitoba chapter, “John, who has been chosen as a Hemophilia Cham-
pion [by Bayer Worldwide], is an inspiration to parents and children alike whose lives are turned up-side-down when a diagnosis occurs. As a role model he demonstrates that the dis-order does not have to define, nor does it have to keep people from living healthy, fulfilling lives.”
One in 100 Canadians carries an inherited bleeding disorder gene and one in 10 of these, or approximately 35,000 Cana-dians, may have symptoms that are serious enough to require ongoing medical care. Unfortunately, many of these individuals are not yet correctly diagnosed.
HemophiliaFounded in 1953, the Canadian Hemophilia Society’s mis-
sion is to improve the health and quality of life for people living with inherited bleeding disorders and ultimately to help find a cure (www.hemophilia.ca). In its case for support, the Canadian Hemophilia Society suggests that “blood disorders are a family of diseases in which blood proteins or platelets that help the blood to clot are missing or do not function properly, resulting in prolonged bleeding.” Hemophilia is a lifelong, hereditary disorder that can affect both men and women alike. In one out of three cases, there is no his-tory of the disorder in the family and the cause is a new genetic mutation.
There are two types of hemophilia, A and B. Hemo-philia A involves low levels or the absence of clot-ting factor VIII, while those who have Hemophilia B are deficient of clotting factor IX. About eight out of 10 people who have hemophilia have type A. The blood of people with hemophilia doesn’t clot normally; they don’t bleed more profusely or more quickly than others, but they bleed for a much longer period when they are not treated. External wounds are not considered as serious as internal bleeding into joints and muscles, which can be painful and potentially lead to severe disability if left untreated.
von Willebrand DiseaseWhile hemophilia is more widely known, von Willebrand
Disease (VWD) is actually the most common type of bleeding disorder, affecting an estimated one per cent of the world’s pop-ulation. People with VWD have a problem with a blood protein which helps platelets to clot. It takes longer for their blood to clot and the bleeding to stop.
Symptoms of VWD include easy bruising, frequent or pro-
| HEALTH MATTERS |
10 Benefits and Pensions Monitor | June 2014
By: Caroline Tapp-McDougall
living With A Bleeding disorder
Caroline Tapp-McDougall is the publisher of Solutions: Canada’s Family Guide to Home Health Care and Wellness and the author of The Complete Canadian Eldercare Guide.
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It’s not about seeing the obvious. It’s about having the vision to see beyond. To see both the obstacles and the opportunities. To recognize the risks and the rewards. As Canada’s leading independent actuarial consulting firm, Eckler has been helping clients manage uncertainty for more than 85 years through the delivery of informed and unbiased advice. It’s all about innovation and creativity – and the discipline to get the numbers to reveal the bigger picture.
When you have mastered numbers you no longer read them. You read meanings.
Visit eckler.ca/vision – we’ll help you hear what the numbers are really saying.
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June 2014 | Benefits and Pensions Monitor 13
There is a well-worn ancient Chinese curse: “May he live in interesting times.” U.S. Senator Rob-ert F. Kennedy revived it in a 1966 speech. It turns out those words may not have originated in China after all. However, it remains an apt
phrase to describe our times and it’s also useful because it’s not what it seems.
There have been a number of reports released in recent months which could help inform – even transform – the way we look at health benefit plan management and, more importantly, the health of the workforce. But these studies may also confuse and mislead. There are conflicting and sometimes narrow per-spectives. The lines between fact and opinion and advocacy are
easily blurred. Conclusions may be drawn that aren’t supported by evidence. And if you like what you read, can you implement similar strategy or tactics and get the same results? The answer isn’t obvious. In fact, the only honest answer is one you’ll rarely read: “It depends.”
Practical ResearchPractical research can help business leaders see beyond
headlines and news releases. Facts, data, and anecdotes do not tell the whole story, and ‘the results’ may not be what they seem. Like never before, sound and timely decisions depend on better information, critical thinking, and spirited debate.
The first lesson is to take all such opinions, including mine, with a grain of salt. I have biases, experience, and imperfect knowledge – like every author and reader – that shape my opin-ions and interpretations. You do too.
These three studies may help illustrate the good, the bad, and the uncertainty of what we read.
The Sanofi Canada Healthcare Survey (SCHS)Background: Over the last 17 years, the SCHS1 has become
an industry benchmark and linked employee views on health
By: Chris Bonnett
‘But What does It really Mean?’
BENEFIT & PENSION CONSULTANTS ANNUAL RepoRt & DiRectoRy
16 Benefit & Pension Consultants Directory
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14 Benefits and Pensions Monitor | June 2014
benefits with healthy workplaces and provincial health programs and policy.
Strengths: For good reason, this is a survey with high credibility and a strong national reputation. It is one of the few that have ever targeted health plan member perspectives and revealed important changes in those attitudes over time. In recent years, the SCHS has reported complementary responses from employer surveys. Cross-tabs illustrate statistical associations between different findings. Its value also lies in the quality of its methods, the balance between its sponsorship and the external members of a diverse and highly qualified advisory board, and the large sample size which holds up well when sub-group analyses are used to provide detail by region or demographic factors.
Keep in Mind: The SCHS measures opinions from a convenience sample that is adjusted only for age, gender, and region. Results vary each year depend-ing on the sample and respondent expe-riences, as well as the question wording and external issues.
Even high-quality surveys can’t iden-tify and control all variables that may influence results. For example, large workplaces are often disproportionately represented and respondents must be flu-ent in English or French to participate. The views of employees from other cultural backgrounds may not be reflected. And while it’s enlightening to have both plan members and sponsors involved, the two survey groups are completely independent of each other, so the two perspectives must be compared with some caution.
The Impact of Community Pharmacy on Hypertension
ManagementBackground: As the pharmacy indus-
try business model changes, the profes-sion has been repositioning itself as an accessible and knowledgeable ally in the management of both medications and chronic disease. In January 2014, the Ontario Pharmacists Association (OPA) and Green Shield Canada (GSC) released a collaborative study involv-ing 27 community pharmacies and 118 patients with diagnosed hypertension.
Strengths: One highlight of this study is the collaboration between the OPA and GSC. In a real-world setting, the study used a randomized controlled trial (RCT) design to separate the pharmacists into intervention and control groups. The intervention group provided medi-cation review and optimization, life-style education, and aimed to improve treatment adherence. The control group provided usual care such as dispensing and counselling. The study helped dem-onstrate how pharmacists could help their patients better manage high blood pressure. The sponsors reported that the intervention resulted in better hyperten-sion control and adherence, and high levels of patient satisfaction.
Keep in Mind: The news release that announced the study provided a gener-ous interpretation of the results. For example, the program apparently “qua-drupled the number of patients” with controlled blood pressure. However, the actual numbers in the report indicated an impressive increase of 92 per cent, but
much lower than reported. There were also conflicting results
for changes in adherence and no analy-sis of results supported the claim that such studies are cost-effective. The lesson here is to read news releases and even study abstracts (summaries) with caution. Always read the full study; you may come to different con-clusions than the authors or communi-cation experts.
Plus, you can contact researchers. In this case, the OPA’s representative was very helpful in explaining the approach.
Prescription Drug Cost, Value, and Plan Sustainability
Background: Two reports were released in March 2014 by Dr. Brett Skinner, an executive of Rx&D, the brand drug manufacturer industry asso-ciation. One article focused on a June 2013 drug policy report by the Canadian Life and Health Insurance Association (CLHIA) and the other asked employers to consider the value of their drug plans.
Strengths: Dr. Skinner challenges the notion that drug plans are unsus-tainable. The rise in drug plan costs has indeed been flat for the last two years and there may be only a tiny increase in 2014, according to IMS Brogan. Drug plans haven’t changed much over the years and cost pressures can be largely managed through plan design and pool-ing. It’s much easier to count costs than assess value which is subjective and challenging … and more necessary as plan use rises, professional fees increase, and plan administration costs escalate in
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lock-step with claims. Responding to the CLHIA’s call for much more govern-ment action, he asks an important ques-tion about whether governments should intervene in private drug plans.
Keep in Mind: For private payers, are the most relevant questions being asked? First, both papers focus only on patented medicines, but private health plans fund much more. Drug plan cost increases will accelerate, driven by underlying chronic disease and increased use of specialty drugs. Better information and analysis will identify where to invest and to cut. Not all new
drugs or services create value. Until health plan designs change, employ-ers are effectively choosing to accept whatever cost increases occur. Perhaps the question is not whether drug plans are sustainable, but under what condi-tions. Rx&D and CLHIA members can better equip plan sponsors with prac-tical, sophisticated tools that create value and reflect our changing world. The lesson here is to always consider the broader context in which argu-ments are made.
Health benefits today are no longer quite so simple and predictable.
Requires Trade-offsThere are over one million employ-
ers in Canada and they are all differ-ent. Managing health benefits requires trade-offs. New data are everywhere, but insight is still rare and certainly no one has all the answers. But there are impor-tant opportunities for each stakeholder
to increase their value by investing in and helping design, interpret, and apply new research that addresses common, chronic, and costly workplace health problems. Collaboration will be crucial.
Too often all we have are anec-dotes and opinions, which are helpful but incomplete. Absent a solid under-standing of new research, we set our-selves up to fail in the moment when our most important clients say: “I need more”. BPM
1. Disclosure: I have been a volunteer external member of the advisory board since 2003.
Chris Bonnett is president of H3 Consulting
[email protected] �Tips
Check that the design, meth-ods, outcomes and conclu-sions of new research are relevant to your own situ-
ation. Context matters. For example: Findings from well-designed ran-
domized controlled trials (RCT) are important to prove cause-and-effect, but are unlikely to reflect typical patients living in real-world settings.
RCTs are not always the ‘gold standard’ in research. Workplace health promotion studies are often less expensive and more relevant and generalizable when other designs are used.
Statistical significance means the results are not likely due to chance, usually with 95 per cent certainty. Clinical significance and practical implementation should also be considered.
Be cautious when general state-ments are made about employers. Big and small employers have dif-ferent organizational structures, drivers, cultures, and philosophies about total compensation.
All studies have assumptions and limitations which should be iden-tified because any changes could impact the validity and reliabil-ity of results. Funding sources and potential conflicts of interest should be disclosed. BPM
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ABACUS RETIREMENT SERVICES INC. Muneer Feeroze, President; 5160 Explorer Dr., Ste. 11, Missis-sauga, ON L4W 4T7 PH: 289-805-1240 Fax: 289-805-1241 eMail: [email protected]
ACQUAINT FINANCIAL INC. Asaf Shad, President & CEO; 4 - 2131 Williams Pkwy., Brampton, ON L6S 5Z4 PH: 905-595-1323 eMail: [email protected] Web: www.acquaintfinancial.com ACTUARIAL SOLUTIONS INC. Joe Nunes, President; 1695 Manning Rd., Ste. 202, Tecumseh, ON N8N 2L9 PH: 519-979-4600 Fax: 519-979-4699 eMail: [email protected] Web: www.actuarialso-lutionsinc.com ACTUBEN CONSULTING INC. Brian Jenkins, President; 102-2680 Matheson Blvd. E., Mississauga, ON L4W 0A5 PH: 905-823-7942 Fax: 888-892-2018 eMail: [email protected] Web: www.actuben.com
ADVISORY CAPITAL GROUP Mary Linton, Manag-ing Partner; 110 Yonge St., Ste. 1702, Toronto, ON M5C 1T4 PH: 416-322-3339 Fax: 416-322-1440 eMail: [email protected] Web: www.adviso-rycanada.com Client Profile (By # of Employees) 1,000+: 55,000 Professional Staff: 10 Group Ben-efit Services: Group Benefit Plans, DB Pension Plans, DC Pension Plans Investments Services: Investment Consulting, Manager Search, Performance Measure-ment, Asset Allocation, Portfolio Modelling, Attribution Analysis, Compliance Investment, Policy Development, Education & Communication, Risk Management, Transi-tion Management Software & Technology Services: Investment Management, Portfolio Style Analysis, Invest-ment Manager Selection, Fund Reporting, DC Pension
AGA BENEFIT SOLUTIONS Martin Papillon, President; 4150 Sainte-Catherine St. W., Ste. 490, Westmount, QC H3Z 2W8 PH: 514-935-5444 eMail: [email protected] Web: www.gfaga.com AMPERSAND ADVISORY GROUP Gerry Wahl, Senior Consultant; 4221 Canterbury, North Vancouver, BC V7R 3N4 PH: 604-987-9783 eMail: [email protected] Web: ampersandadvisor.com
AON HEWITT Nicolle Guillen, Corporate Marketing; 225 King St. W., Ste. 1600, Toronto, ON M5V 3M2 PH: 416-225-5001 Fax: 416-227-5744 eMail: [email protected] Web: www.aonhewitt.com/canada Other Offices: Vancouver, Calgary, Edmonton, Regina,
aqgroupsolutions.com Web: www.aqgroupsolu-tions.com
ASSOCIUM Neil Iddon, Director of Benefits; One Con-corde Gate, Ste. 802, North York, ON M3C 3N6 PH: 416-867-9350 Fax: 416-849-3312 eMail: [email protected] Web: www.associum.com
AUTOMATED ADMINISTRATION SERVICES INC Keith M. Foot, President; 200 Town Centre Blvd., Ste. 102, Markham, ON L3R 8G5 PH: 905-513-9868 Fax: 905-513-9893 eMail: [email protected] Web: www.aasinc.ca
BAYNES & WHITE James White, President; 20 Eglinton Ave. W., Ste. 1006, Toronto, ON M4R 1K8 PH: 416-863-9159 Fax: 416-863-9158 eMail: [email protected] Web: www.bayneswhite.com Client Profile (By # of Employees) 1 to 100: 70 101 to 500: 15 501 to 1,000: 5 1,000+: 7 Group Benefit Services: Group Benefit Plans, DB Pension Plans, DC Pension Plans, Actuarial Services, Administration Out-sourcing Investments Services: Investment Con-sulting, Manager Search, Performance Measurement, Policy Development, Education & Communication, Risk Management, Transition Management Healthcare Services: Disability Management, Claims Management, Return To Work, Drug Cost Management, Employee Assistance Program Record-keeping & Third-party Administration Services: Claims Payment, Adminis-trative Support, Employee Assistance, Premium Billing & Collection, Eligibility Verification, Healthcare Spending Account Administration, DB Pension Plan Administration Software & Technology Services: DB Pension
BELTON BOISSELLE BENEFITS & PENSIONS Kasey Boisselle, President, Group Benefits & Pensions; 1620-155 Carlton St., Winnipeg, MB R3C t3H8 PH: 204-956-9863 Fax: 204-956-9869 eMail: [email protected] Web: www.beltonboisselle.com
BENEFACT BENEFIT CONSULTANTS Sandy Marincic, Partner; 57 Augusta St., Hamilton, ON L8N 1P8 PH: 905-387-8300 Fax: 905-387-8301 eMail: [email protected] BENEFEX CONSULTING INC. Wade Cox, Principal; 10504 - 123 St. N.W., Edmonton, AB T5N 1P1 PH: 780-784-2612 Fax: 780-451-4494 eMail: [email protected] Web: www.benefexconsulting.com
Saskatoon, Winnipeg, London, Ottawa, Montreal, Que-bec City, Halifax Professional Staff: 1,800 Group Benefit Services: Group Benefit Plans, DB Pension Plans, DC Pension Plans, Actuarial Services, Adminis-tration Outsourcing, Talent, Engagement, Communica-tion, Organizational Change, Plan Design Optimization, Mergers & Acquisitions Investments Services: Invest-ment Consulting, Manager Search, Performance Mea-surement, Asset Allocation, Portfolio Modelling, Attribu-tion Analysis, Compliance Investment, Policy Develop-ment, Education & Communication, Risk Management Healthcare Services: Disability Management, Claims Management, Return To Work, Drug Cost Management, Flexible Benefits, Plan Design, 360 Absence Manage-ment Solutions, Health Strategies, Wellness Record-keeping & Third-party Administration Services: Administrative Support, Call Centre, Premium Billing & Collection, Eligibility Verification, Healthcare Spending Account Administration, Claims Advocacy, DC Pension Plan Administration, DB Pension Plan Administration, Group RRSP Administration, HR BPO including recruit-ment, training and development, workforce analytics, HR Cloud Solutions, Disability Claims Administration
API ASSET PERFORMANCE INC. Vaino Keelmann, Partner; 5160 Yonge St., Ste. 802, Toronto, ON M2N 6L9 PH: 416-922-2822 Fax: 416-922-8599 eMail: [email protected] Web: www.apiasset.com Other Offices: Vancouver Investments Services: Investment Consulting, Manager Search, Performance Measurement, Asset Allocation, Portfolio Modelling, Attribution Analysis, Compliance Investment, Policy Development, Education & Communication, Risk Man-agement, Transition Management
APTUS BENEFITS INC. Bill Watt, Principal; 205 - 409 Granville St., Vancouver, BC V6C 1T2 PH: 604-424-8030 Fax: 604-424-8031 eMail: [email protected] Web: www.aptusbenefits.ca Professional Staff: 5 Group Benefit Services: Group Benefit Plans, DC Pension Plans Investments Services: Investment Consulting, Manager Search, Performance Measure-ment, Asset Allocation, Portfolio Modelling, Compliance Investment, Policy Development, Education & Communi-cation Healthcare Services: Disability Management, Claims Management, Drug Cost Management Record-keeping & Third-party Administration Services: Administrative Support, Claims Advocacy
AQ GROUP SOLUTIONS Laura Lomow, President; 202-226 Osborne St. N., Winnipeg, MB R3C 1V4 PH: 204-989-2006 Fax: 204-989-2009 eMail: info@
Benefits and Pensions Monitor directories can be found at www.bpmmagazine.com
BENEFIT & PENSION CONSULTANTS ANNUAL DiRectoRy
Coming In August IssueReport and Directory:
Managers of US Assets
eMail John L. McLaine
�
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BENEFIT EXCHANGE, THE (BEN-X) Stephen Cum-ming, National Sales Manager; 234 Eglinton Ave. E., Toronto, ON M4P 1K5 PH: 855-557-2369 eMail: [email protected] Web: www.ben-x.ca Client Profile (By # of Employees) 1 to 100: 30 101 to 500: 5 501 to 1,000: 5 1,000+: 2 Other Offices: Burlington Professional Staff: 3 Group Benefit Services: Group Benefit Plans, Adminis-tration Outsourcing Healthcare Services: Claims Management, Drug Cost Management Record-keeping & Third-party Administration Ser-vices: Claims Adjudication, Claims Payment, Admin-istrative Support, Call Centre, Eligibility Verification, Healthcare Spending Account Administration, PBM Partnership to provide cost-effective electronic claims adjudication; Specialty Services for Health-care Spending Accounts Software & Technology Services: Benefits Administration, Health Claims Adjudication, Software Solutions for Adjudication and TPA Services
BENEFIT PLAN ADMINISTRATORS LIMITED Stephen Houston, Director of Consulting; 90 Burnhamthorpe Rd. W., Ste. 300, Mississauga, ON L4B 3C3 PH: 905-275-6466 Fax: 905-275-6461 eMail: [email protected] Web: www.bpagroup.com
BENEFIT SOURCE, THE Michael Nadler, President; 2552 Bristol Circle, 2nd Floor, Oakville, ON L6H 5S1 PH: 905-785-0084 Fax: 905-829-1019 eMail: [email protected] Web: www.benefitsource.ca
BENEFITDECK CONSULTING LTD. Donald Chu, Prin-cipal; 170-422 Richards St., Vancouver, BC V6B 2Z4 PH: 604-808-0328 Fax: 604-909-2641 eMail: [email protected] Web: www.benefitdeck.com BENEFITS COMPANY, THE Rob Tamblyn, President; 2795 Kew Dr., Windsor, ON N8T 3B7 PH: 519-258-5948 Fax: 519-974-1575 eMail: [email protected] Web: www.thebenefitscom-pany.ca
BENEFITS DIRECT CORP. Jacob S. E. Clark, President & Lead Consultant; 195 Dufferin Ave., Ste. 610, London, ON N6A 1K7 PH: 519-672-3476 Fax: 519-672-0554 eMail: [email protected] Web: www.ben-efitsdirect.ca BENEFITS TRUST, THE Robert Crowder, President; 3800 Steeles Ave W., Ste. 102W, Vaughan, ON L4L 4G9 PH: 905-264-8990 Fax: 905-264-1123 eMail: [email protected] Web: www.the-benefitstrust.com BENEPLAN CO-OPERATIVE Yafa Sakkejha, General Manager; 150 Ferrand Dr., #500, Toronto, ON M3C 3E5 PH: 800-387-1670 Fax: 416-863-5157 eMail: [email protected] Web: www.beneplan.ca
Management Healthcare Services: Disability Man-agement, Return To Work Record-keeping & Third-party Administration Services: Call Centre, DC Pension Plan Administration, DB Pension Plan Adminis-tration Software & Technology Services: Benefits Administration, Client Server Technology, Investment Management, Investment Manager Selection, Fund Valuation, DB Pension, DC Pension
BUFFETT TAYLOR, A PEOPLE CORPORATION COMPANY David Czuczman, Practice Leader; 701 Rossland Rd. E., Ste. 209, Whitby, ON L1N 8Y9 PH: 905-666-1300 Fax: 905-666-4887 eMail: [email protected] Web: www.buffett-taylor.com C & C INSURANCE CONSULTANTS LTD. Jeff Ische, President; 6 - 22425 Jefferies Rd., Komoka, ON N0L 1R0 PH: 519-657-1446 Fax: 519-657-4520 eMail: [email protected] Web: www.ccinsurance.ca
C-SURANCE.CA GLOBAL SERVICE INC. Richard Sirois, President & CEO; 3455 de la Piniere, #201, Terre-bonne, QC J6X 0A1 PH: 866-629-6158 eMail: [email protected] Web: www.c-surance.ca CANADIAN BENEFITS ASSOCIATES INC. Muneer Feeroze, Managing Partner; 5160 Explorer Dr., Ste. 11, Mississauga, ON L4W 4T7 PH: 289-724-0013 Fax: 289-997-6383 eMail: [email protected] Web: www.canadianben-efitsassociates.com
CARTESIA Nathalie Charette, Consultant; 318 Royal, Beaconsfield, QC H9W 5W5 PH: 514-258-5502 Fax: 514-933-5502 eMail: [email protected] Web: www.cartesia.ca CARTIN & ASSOCIATES James Cartin, President; 101 - 1100 8th Avenue S.W., Calgary, AB T2P 3T8 PH: 403-266-2816 Fax: 403-265-9895 eMail: [email protected] Web: www.cartin.ca
CEM BENCHMARKING INC. Alan Torrance, Partner; 372 Bay St., Ste. 1000, Toronto, ON M5H 2W9 PH: 416-369-1078 eMail: [email protected] Web: www.cembenchmarking.com
COLES BENEFITS CONSULTING INC. Alan Coles, President; 2000 Barrington St., Ste. 900, Halifax, NS B3J 3K1 PH: 902-421-1770 Fax: 902-425-8905 eMail: [email protected] Web: www.coles-group.com CONNEX HEALTH CONSULTING Denise Balch, Presi-dent; 600 Brant St., Burlington, ON L7R 2G9 PH: 905-637-2775 Fax: 866-738-4870 eMail: [email protected] Web: www.connexhc.com CONNOLLY GROUP Shayne Connolly, Vice-president; 109 Richmond St., Charlottetown, PE C1A 1H7 PH: 902-892-5433 Fax: 902-894-3863 eMail: [email protected] Web: www.connollygroup.ca CONTE FINANCIAL SERVICES INC. Tony Conte, President; 205 - 460 W. Hunt Club Rd., Ottawa, ON K2E 0B8 PH: 613-667-3667 Fax: 613-667-4667 eMail: [email protected] Web: www.cfservices.ca
BFINANCE CANADA Brian Cyr, Managing Director; 1250 Rene-Levesque W., Ste. 2200, Montreal, QC H3B 4W8 PH: 514-393-4899 Fax: 514-934-4640 eMail: [email protected] Web: www.bfinance.ca Client Profile (By # of Employees) 1 to 100: 60 Profes-sional Staff: 3 Group Benefit Services: DB Pension Plans, DC Pension Plans, Administration Outsourcing Investments Services: Investment Consulting, Man-ager Search, Performance Measurement, Asset Alloca-tion, Portfolio Modelling, Risk Management
BFL CANADA CONSULTING SERVICES INC. David Vanasse, President; 3448 Stanley, Montreal, QC H3A 1R8 PH: 514-315-3335 Fax: 514-843-3842 eMail: [email protected] Web: www.bflcanada.ca BILSLAND GRIFFITH BENEFIT ADMINISTRATORS Janice Young, Admin Assistant; 501-4445 Lougheed Hwy., Burnaby, BC V5C 0E4 PH: 604-433-8899 Fax: 604-433-8894 eMail: [email protected] Web: bgbenefitsadmin.com
BNY MELLON GLOBAL RISK SOLUTIONS Catherine Thrasher, Managing Director; 320 Bay St., 10th Floor, Toronto, ON M5H 4A6 PH: 416-775-5450 eMail: [email protected] Web: www.bnymellon.com BPC GROUP, THE Susan Gillespie, Partner; 27 - 2155 Dunwin Dr., Mississauga, ON L5L 4M1 PH: 905-569-0505 Fax: 905-569-6886 eMail: [email protected] Web: www.thebpcgroup.com
BROCKHOUSE & COOPER INC.* Eric Bolduc, Vice-president, Service Development; 1250 René-Lévesque Blvd. W., Ste. 4030, Montreal, QC H3B 4W8 PH: 514-932-1548 Fax: 514-846-1159 eMail: [email protected] Web: www.pavilioncorp.com* - In Sept 2012 the company name changed to Pavilion Advisory Group
BUCK CONSULTANTS Greg Fayarchuk, Canadian Mar-ket Leader, Consulting & Outsourcing; 155 Wellington St. W., Toronto, ON M5V 3H1 PH: 416-644-9252 Fax: 416-865-1099 eMail: [email protected] Web: www.buckconsultants.ca Other Offices: Montreal, Ottawa Group Benefit Services: Group Benefit Plans, DB Pension Plans, DC Pension Plans, Actuarial Services, Administration Outsourcing, Communications Investments Services: Investment Consulting, Manager Search, Asset Allocation, Compli-ance Investment, Education & Communication, Risk
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CORPORATE BENEFIT ANALYSTS, INC. Dean How-ard, President & CEO; 515 Riverbend Dr., Ste. 102, Kitchener, ON N2K 3S3 PH: 519-579-7749 Fax: 519-579-4422 eMail: [email protected] Web: www.corpben.com
COUGHLIN & ASSOCIATES LTD. Brian Bockstael, President; 466 Tremblay Rd., Ottawa, ON K1G 3R1 PH: 613-231-2266 Fax: 613-231-2345 eMail: [email protected] Web: www.coughlin.ca
COWAN INSURANCE GROUP LTD. Teresa Norris-Lue, Vice-president, Group Benefits & Retirement & Indi-vidual Life & Wealth; 705 Fountain St. N., Cambridge, ON N1R 5T2 PH: 519-650-6363 Fax: 519-650-6433 eMail: [email protected] Web: www.cowangroup.ca
CPAS SYSTEMS INC. Jeanette Willis, Vice-president Marketing & Sales; 250 Ferrand, Ste. 700, Toronto, ON M3C 3G8 PH: 416-422-0563 Fax: 416-422-5617 eMail: [email protected] Web: www.cpas.com CUBIC HEALTH INC. Mike Sullivan, President; 26 Soho St., Ste. 390, Toronto, ON M5T 1Z7 PH: 416-203-1446 Fax: 416-203-6202 eMail: [email protected] Web: www.cubichealth.ca
CYNTHIA L. BOWDEN INSURANCE AGENCY LIM-ITED Cindy Bowden, President; 7030 Woodbine Ave., Markham, ON L3R 6G2 PH: 905-477-8029 Fax: 905-944-0808 eMail: [email protected] Web: www.cindybowden.com DIXON ACTUARIAL SERVICES INC. Karen Dixon, Chief Actuary; 1673 Richmond St., Ste. 301, Lon-don, ON N6G 2N3 PH: 519-630-1395 eMail: [email protected] Web: www.dixonac-tuarial.com DONALDSON VINCENT ASSOCIATES LIMITED Don Armstrong, Senior Actuary/Consultant; 38 Lesmill Rd., Toronto, ON M3B 2T5 PH: 416-447-7900 Fax: 416-445-4504 eMail: [email protected] Web: dvassociates.com DT&A Don Tettmar, President; 1205 Cameron Ave. S.W., Calgary, AB T2T 0K8 PH: 403-244-9663 Fax: 403-244-9675 eMail: [email protected]
DUGGAN BENEFITS INSURANCE AGENCIES INC. Mike Duggan, President; 202 - 135 Matheson Blvd. W., Mississauga, ON L5R 3L1 PH: 905-275-7100 Fax: 905-275-7103 eMail: [email protected] Web: www.dugganbenefits.com
DUNHELM CONSULTING INC. James Clark, Presi-dent; 39 Tradewind Dr., Oakville, ON L6L 6K9 PH: 905-849-4385 eMail: [email protected] Web:
EXPRESS SCRIPTS CANADA Nancy Tibbo, Manager, Marketing & Communications; 5770 Hurontario, Missis-sauga, ON L5R 3G5 PH: 905-712-8615 Fax: 905-712-9986 eMail: [email protected] Web: www.express-scripts.ca Other Offices: Montreal, Moncton, Winnipeg, Burnaby
FAIRFIELD WATSON & LEWIS INC. Ian Watson, Partner; #22, 4550 - 112th Ave. S.E., Calgary, AL T2C 2K2 PH: 403-262-7278 Fax: 403-262-7251 eMail: [email protected] Web: www.fairfieldwat-son.com
FIRM CONSULTING INC. Jacob S. E. Clark, President & Lead Consultant; 195 Dufferin Ave., Ste. 610, London, ON N6A 1K7 PH: 519-672-3476 Fax: 519-672-0554 eMail: [email protected] Web: www.firm-consulting.ca FORT EMPLOYEE BENEFITS CONSULTANTS INC. Chris Payne, Director; 1115-3400 de Maisonneuve W., Montreal, PQ H3Z 3B8 PH: 514-481-4021 eMail: [email protected] Web: www.fortinsur-ance.com FSEAP | INTEGRATED WORKPLACE SOLUTIONS (IWS) Janet McLellan, Director, Strategic Account Man-agement & Business Development; 2 Carlton St., Ste. 1005, Toronto, ON M5B 1J3 PH: 416-585-9985 Fax: 416-642-1902 eMail: [email protected] Web: www.fseap.com GALLIVAN & ASSOCIATES STUDENT NETWORKS*, A PEOPLE CORPORATION COMPANY 470 Weber St. N., Waterloo, ON N2L 6J2 PH: 519-746-0200 Fax: 519-746-0215 eMail: [email protected] Web: www.gallivan.ca * A People Corporation Company
GEM FINANCIAL GROUP INC. Rasa Lannoo, CEO; 42 Riddell St., Woodstock, ON N4S 6M1 PH: 519-537-2216 Fax: 519-537-8778 eMail: [email protected] Web: www.gemfinancialgroup.ca GEORGE & BELL CONSULTING INC. Brendan George, Partner; 400 - 601 W. Broadway Ave., Vancouver, BC V5Z 4C2 PH: 604-871-4151 Fax: 604-871-4150 eMail: [email protected] Web: www.georgeand-bell.com
GLOBAL INVESTMENT SOLUTIONS Jeffrey Hand, Managing Director; 208 Wyecroft Rd., Ste. 201, Oakville, ON L6K 3T8 PH: 905-842-4242 Fax: 416-760-3365 eMail: [email protected] Web: www.global-i-s.com GOODEN ACTUARIAL CONSULTANTS LTD. Bill Gooden, President & Actuary; 2472, 246 Stewart Green S.W., Calgary, AB T3H 3C8 PH: 403-263-5027 eMail: [email protected] Web: www.gooden.ca
dunhelm.ca Client Profile (By # of Employees) 1 to 100: 1 1,000+: 1 Professional Staff: 1 Invest-ments Services: Investment Consulting, Manager Search, Asset Allocation, Compliance Investment, Policy Development, Membership of Governance and Oversight Committee, Independent Review and Analy-sis of Existing Pension Fund Management Arrange-ments
ENCON GROUP INC. Rhonda Sommerville, Senior Vice-president; 55 Standish Ct., 6th Floor, Missis-sauga, ON L5R 4B2 PH: 905-755-2063 eMail: [email protected] Web: www.encon.ca
Benefits and Pensions Monitor directories can be found at www.bpmmagazine.com
BENEFIT & PENSION CONSULTANTS ANNUAL DiRectoRy
ECKLER LTD. Greg Malone, Principal; 110 Shep-pard Ave. E., Ste. 900, Toronto, ON M2N 7A3 PH: 416-696-3098 Fax: 416-429-3794 eMail: [email protected] Web: www.eckler.ca Cli-ent Profile (By # of Employees) 1 to 100: 120 101 to 500: 160 501 to 1,000: 40 1,000+: 60 Other Offices: Vancouver, Winni-peg, Montreal, Halifax, Quebec City Professional Staff: 210 Group Benefit Services: Group Benefit Plans, DB Pension Plans, DC Pension Plans, Actuarial Services, Administration Outsourcing Investments Services: Investment Consulting, Manager Search, Performance Measurement, Asset Allocation, Portfolio Modelling, Attribution Analysis, Compliance Investment, Policy Develop-ment, Education & Communication, Risk Manage-ment, Transition Management Healthcare Ser-vices: Disability Management, Claims Manage-ment, Return To Work, Drug Cost Management, Employee Assistance Program Record-keeping & Third-party Administration Services: Administrative Support, Call Centre, Eligibility Verification, DC Pension Plan Administration, DB Pension Plan Administration, Group RRSP Admin-istration Software & Technology Services: Benefits Administration, Client Server Technology, Portfolio Style Analysis, DB Pension, DC Pension, Trading Workstations
Eckler Ltd. is a leading consulting and actuarial firm with offices across Canada and the Carib-bean. Owned and operated by active Principals, the company has earned a reputation for ser-vice continuity and high professional standards. Our select group of advisers offers excellence in a wide range of areas, including financial services, pensions, benefits, communications, investment management, pension administra-tion, change management and technology. Eck-ler Ltd. is also a founding member of Abelica Global – an international alliance of indepen-dent actuarial and consulting firms operating in over 20 countries.
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H3 CONSULTING Chris Bonnett, President; 27 Crest-wood Pl., Guelph, ON N1E 4M4 PH: 416-458-5468 eMail: [email protected] Web: www.hthree.ca HAMILTON+PARTNERS* Ian Farrer, Partner; 1500,736 6th Ave. S.W., Calgary, AB T2P 3T7 PH: 403-232-4578 Fax: 403-262-2074 eMail: [email protected] Web: www.hamiltonandpartners.com * A People Corporation Company
HART ACTUARIAL CONSULTING LTD. David C. Hart, Consulting Actuary; 2851 Rainbow Cr., Mississauga, ON L5L 2H7 PH: 905-820-4810 Fax: 905-820-5520 eMail: [email protected] Web: www.an-actual-actuary.com
HEALTHSOURCE PLUS* Domenic Monopoli, Director, Consulting Services; 2225 Sheppard Ave. E., Ste. 1400, Toronto, ON M2J 5C2 PH: 416-445-0000 Fax: 416-445-2222 eMail: [email protected] Web: www.healthsourceplus.com * A People Corporation Company
HUB INTERNATIONAL HKMB LTD. Cara Bowman, Benefit Administrator; 515-900 Bay St., Toronto, ON M5G 2E3 PH: 416-597-0555 eMail: [email protected] Web: www.hkmb.com
HUB INTERNATIONAL STRATA BENEFITS CON-SULTING Glen J. Middleton, President; Unit B2 - 1150 Waverley St., Winnipeg, MB R3T 0P4 PH: 204-984-
JOHNSON INC. Jason Durdle, Director PB Operations; 10 Factory Lane, St. John’s, NL A1C 6H5 PH: 709-738-2884 eMail: [email protected] Web: www1.johnson.ca
JOHNSTON GROUP INC. Jackie Olinkin, Manager, Marketing Services; 582 King Edward St., Winnipeg, MB R3H 0P1 PH: 204-774-6677 Fax: 204-774-6698 eMail: [email protected] Web: www.john-stongroup.ca
JONES DESLAURIERS BLEVINS Debbie Ormsby, Chief Operating Officer; 30 Quarry Ridge Rd., Barrie, ON L4M 7G1 PH: 705-727-3775 Fax: 705-721-0352 eMail: [email protected] Web: www.jdbgroup.ca JSL INC. Tom Lowden, Practice Leader; 4550 Highway 7, Ste. 225, Vaughan, ON L4L 4Y7 PH: 905-264-2410 Fax: 905-264-2401 eMail: [email protected] Web: www.jslinc.ca
KRIEGER + ASSOCIATES David Krieger, President; 43 Front St. E., Ste. 300, Toronto, ON M5E 1B3 PH: 416-363-1221 eMail: [email protected] Web: www.kriegerandassociates.com
LENNOX FINANCIAL GROUP INC. Chris Lennox, President; #23-1730 McPherson Ct., Pickering, ON L1W 3E6 PH: 905-492-7888 Fax: 888-883-8427 eMail: [email protected] Web: www.lennoxfi-nancial.ca
9450 Fax: 204-984-9460 eMail: [email protected] Web: www.hubstrata.ca HUMAN CAPITAL BENEFITS Chris Pryce, Managing Director; 249 Yonge Blvd., Toronto, ON M5M 3J1 PH: 416-924-8280 Fax: 416-323-1984 eMail: [email protected] Web: www.humancapitalbenefits.com INVESTMENT GUILD, THE* Michael Thomas, Senior Advisor; 2225 Sheppard Ave. E., Ste. 1400, Toronto, ON M2J 5C2 PH: 905-470-9840 Fax: 905-470-6723 eMail: [email protected] Web: www.investmentguild.com * A People Corporation Company
J&D BENEFITS INC. Todd Rappitt, President; 228-8901 Woodbine Ave., Markham, ON L3R 9Y4 PH: 905-477-7088 Fax: 905-477-2249 eMail: [email protected] Web: www.jdbenefits.com
J.J. MCATEER & ASSOCIATES INCORPORATED Susan Bird, President; 45 McIntosh Dr., Markham, ON L3R 8C7 PH: 905-946-8655 Fax: 905-946-2535 eMail: [email protected] Web: www.mcateer.ca JDM ACTUARIAL EXPERT SERVICES INC Peter Gorham, President & Actuary; 313 Powell Rd., Whitby, ON L1N 2H5 PH: 905-999-4763 Fax: 905-438-1330 eMail: [email protected] Web: www.jdmactuarial.com
Benefits and Pensions Monitor directories can be found at www.bpmmagazine.com
BENEFIT & PENSION CONSULTANTS ANNUAL DiRectoRy
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20 Benefits and Pensions Monitor | June 2014
LESLIE GROUP LIMITED, THE Rob Campbell, Vice-president, Consulting; 40 Wynford Dr., Ste. 220, Toronto, ON M3C 1J5 PH: 416-510-8966 Fax: 416-510-8964 eMail: [email protected] Web: www.leslieg-roup.com
MCFBEDARD GROUP INC. Charles Bedard, President; 465 Richmond St., Ste. 200, London, ON N6A 5P4 PH: 519-690-1452 Fax: 519-690-1463 eMail: [email protected] Web: www.mcfbedard.com MDM INSURANCE SERVICES INC. Michael D. McKay, President; 834 Gordon St., Guelph, ON N1G 1Y7 PH: 519-837-1531 Fax: 519-836-4909 eMail: [email protected] Web: www.mdm-insurance.com MEDIDIRECT INC. Murray Malley, President; 215, 5403 Crowchild Trail N.W., Calgary, AB T3B 4Z1 PH: 403-537-6298 Fax: 403-539-5511 eMail: [email protected] Web: www.medidirect.ca
Pension Plans, Actuarial Services, Administration Out-sourcing, Asset & Risk Management, Total Pension Out-sourcing, DC Consulting, Legal Services - Governance and Plan Restatements, Retirement Planning Services, Benefits Communications, Shared Risk Pension Plans, Target Ben-efit Pension Plans Investments Services: Investment Consulting, Manager Search, Performance Measurement, Asset Allocation, Portfolio Modelling, Attribution Analysis, Compliance Investment, Policy Development, Education & Communication, Risk Management, Transition Manage-ment Healthcare Services: Disability Management, Claims Management, Return To Work, Drug Cost Manage-ment, Employee Assistance Program, Health & Productiv-ity Solutions, Integrative Health & Wellness Solutions, Full Health & Productivity Support, Risk Assessment, Atten-dance & Disability Management, Plan Implementation & Maintenance, Counselling, Training, Benefits, Crisis Situa-tions, Worker’s Compensation Targeted Health Record-keeping & Third-party Administration Services: Claims Adjudication, Claims Payment, Administrative Sup-port, Employee Assistance, Call Centre, Premium Billing & Collection, Eligibility Verification, Healthcare Spending Account Administration, Claims Advocacy, DC Pension Plan Administration, DB Pension Plan Administration, Group RRSP Administration Software & Technology Services: Benefits Administration, Client Server Technol-ogy, Investment Management, DB Pension, DC Pension
MORROW, CROSSDALE & ASSOCIATES INC. Paul Crossdale, Consultant; 10 Station Lane, Unionville, ON L3R 1R3 PH: 905-853-2569 eMail: [email protected] Web: www.morcro.ca
MOSEY & MOSEY INSURANCE AGENCY LTD. John Mosey Jr., Senior Vice-president; 100 Milverton Dr., #604, Mississauga, ON L5R 4H1 PH: 905-361-2014 Fax: 905-361-2015 eMail: [email protected] Web: www.moseyandmosey.com
MYBENETECH INC. Jason Robinson, Director of Operations; 124 Main St. S., Georgetown, ON L7G 3E6 PH: 416-642-1355 eMail: [email protected] Web: www.mybenetech.com ORGANIZATIONAL SOLUTIONS INC. Liz R. Scott, Prin-cipal & CEO; 2186 Mountain Grove Ave., #253, Burlington, ON L7P 4X4 PH: 866-674-7656 Fax: 905-315-7945 eMail: [email protected] Web: www.orgsoln.com PAL BENEFITS INC. Sarah Beech, President; 1052 Yonge St., Toronto, ON M4W 2L1 PH: 416-969-8588 Fax: 416-962-1711 eMail: [email protected] Web: www.palbenefits.com
PATON CONSULTING INC. Hugh Paton, President; 109 Richmond St., Charlottetown, PE C1A 4B3 PH: 902-894-5256 Fax: 902-894-3863 eMail: [email protected] Web: www.patonconsulting.ca
MELDRUM HORNE & ASSOCIATES Michael Horne, Partner; 220 Laurier Ave. W., Ste. 520, Ottawa, ON K1P 5Z9 PH: 613-233-9105 Fax: 613-233-7270 eMail: [email protected] Web: www.mel-drumhorne.com
MERCER Stephen Lee, Canada Sales Leader; 161 Bay St., Toronto, ON M5J 2S5 PH: 416-868-2882 Fax: 416-868-2136 eMail: [email protected] Web: www.mercer.ca Client Profile (By # of Employees) 101 to 500: 2,715* 501 to 1,000: 285 1,000+: 672 Other Offices: Calgary, Edmonton, Halifax, London, Montreal, Ottawa, Quebec City, Regina, Saskatoon, Van-couver, Winnipeg Professional Staff: 1,300 Group Benefit Services: Group Benefit Plans, DB Pension Plans, DC Pension Plans, Actuarial Services, Administra-tion Outsourcing Investments Services: Investment Consulting, Manager Search, Performance Measure-ment, Asset Allocation, Portfolio Modelling, Attribution Analysis, Compliance Investment, Policy Development, Education & Communication, Risk Management, Tran-sition Management, Delegated Solutions, Operational Reviews, Fee Consulting Healthcare Services: Disabil-ity Management, Claims Management, Return To Work, Drug Cost Management, Employee Assistance Program Record-keeping & Third-party Administration Services: Claims Adjudication, Administrative Support, Call Centre, Eligibility Verification, Healthcare Spending Account Administration, Claims Advocacy, DC Pension Plan Administration, DB Pension Plan Administration * 1-500 employees
MHB BENEFITS INC. Candice Woodard, President; 2625 CR 10, RR 3, Picton, ON K0K 2T0 PH: 613-476-0069 Fax: 866-415-8826 eMail: [email protected] Web: www.isourcebenefits.ca MITCHELL SANDHAM FINANCIAL SERVICES Andrew Kilpatrick, Partner; 2000 - 438 University Ave., Toronto, ON M5G 2K8 PH: 416-862-1750 Fax: 416-862-1975 eMail: [email protected] Web: www.mitchellsandham.com
MORNEAU SHEPELL Randal Phillips, Executive Vice-president and Chief Client Officer; 895 Don Mills Rd., Tower One, Ste. 700, Toronto, ON M3C 1W3 PH: 416-445-2700 Fax: 416-445-7989 eMail: [email protected] Web: www.morneaushepell.com Other Offices: Vancouver, Winnipeg, Calgary, Freder-icton, Halifax, Kitchener, Montreal, Quebec City, London, Ottawa Professional Staff: 3,400 Group Benefit Services: Group Benefit Plans, DB Pension Plans, DC
Benefits and Pensions Monitor directories can be found at www.bpmmagazine.com
BENEFIT & PENSION CONSULTANTS ANNUAL DiRectoRy
MANION WILKINS & ASSOCIATES LTD. Mike Neheli, President; 500 - 21 Four Seasons Place, Toronto, ON M9B 0A5 PH: 416-234-3528 Fax: 416-234-2058 eMail: [email protected] Web: www.manionwilkins.com Other Offices: Woodbridge Professional Staff: 115 Group Benefit Services: Group Benefit Plans, DB Pension Plans, DC Pension Plans, Administra-tion Outsourcing, Group Insurance Marketing, Per-sonal Financial Consulting Services (Life Insurance, Out of Country, Executive Benefits) Investments Services: Investment Consulting, Manager Search, Performance Measurement, Asset Allocation, Port-folio Modelling, Attribution Analysis, Compliance Investment, Policy Development, Education & Com-munication, Risk Management, Group RRSP Market-ing Healthcare Services: Disability Management, Claims Management, Return To Work, Drug Cost Management Record-keeping & Third-party Administration Services: Claims Adjudication, Claims Payment, Administrative Support, Call Centre, Premium Billing & Collection, Eligibility Verification, Healthcare Spending Account Administration, Claims Advocacy, DC Pension Plan Administration, DB Pen-sion Plan Administration Software & Technology Services: Benefits Administration, Health Claims Adjudication, DB Pension, DC Pension
Manion is a third party administrator / consultant providing administration, benefit and pension adjudication and payment, and a full range of consulting and personal financial services to cor-porate, multi-employer and union clients of all sizes. We offer unique and innovative solutions that help our clients save money and enhance their benefit offering, and provide exceptional customer service.
Coming In August IssueReport and Directory:
Managers of US Assets
eMail John L. McLaine
�
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June 2014 | Benefits and Pensions Monitor 21
PAVILION ADVISORY GROUP LTD. Eric Bolduc, Vice-president, Service Development; 1250 René-Lévesque Boul. W., Ste. 4030, Montreal, QC H3B 4W8 PH: 514-932-1548 Fax: 514-846-1159 eMail: [email protected] Web: www.pavilioncorp.com Other Offices: Winnipeg, Toronto Professional Staff: 24 Investments Services: Investment Consult-
ing, Manager Search, Performance Measurement, Asset Allocation, Portfolio Modelling, Attribution Analysis, Policy Development, Education & Communication, Risk Management, Transition Management Software & Technology Services: Investment Manager Selection
PBAS GROUP, THE Terry Crawley, Director, Marketing; 110 - 61 International Blvd., Toronto, ON M9W 6K4 PH: 416-674-3350 Fax: 416-674-8018 eMail: [email protected] Web: www.pbas.ca
Benefits and Pensions Monitor directories can be found at www.bpmmagazine.com
BENEFIT & PENSION CONSULTANTS ANNUAL DiRectoRy
PBI ACTUARIAL CONSULTANTS LTD. Riley St. Jacques, Market Leader & Senior Consulting Actu-ary; Ste. 1070, One Bentall Centre, 505 Burrard St., Box 42, Vancouver, BC V7M 1L5 PH: 604-647-3206 Fax: 604-687-8074 eMail: [email protected] Web: www.pbiactuarial.ca Other Offices: Toronto, Montreal Professional Staff: 67 Group Benefit Services: Group Benefit Plans, DB Pension Plans, DC Pension Plans, Actuarial Services, Administration Outsourcing, Target Ben-efit Pension Plans, Implemented Risk Management (IRM) Investments Services: Investment Consult-ing, Manager Search, Performance Measurement, Asset Allocation, Portfolio Modelling, Attribution Analysis, Compliance Investment, Policy Develop-ment, Education & Communication, Risk Manage-ment, Portable Alpha Overlay Strategies, Alterna-tive Assets Investment (Real Estate, Hedge Funds, Infrastructure) Healthcare Services: Health & Welfare Plan Design, Plan Implementation, Insurer Selection, Service Integration, Service Provider Performance Monitoring, Funding & Claim Risk Analysis, & Retiree Valuation. Record-keeping & Third-party Administration Services: Admin-istrative Support; DB Pension Plan Administration; Record-keeping Services; Benefit Calculations; One-on-one Member Meetings; Marriage Breakdown Calculations; Research & Advice regarding Pension Legislation, Government Filings; Educational Semi-nars; Annual Member Statements; Reconciliation of Expenses, Contributions, Hours Reported & Benefit Payments; Organization & Attendance at Trustee Meetings, Preparation of Meeting Minutes; Annual Member Meetings; Member Communications Soft-ware & Technology Services: Pension Benefit Calculation Tools, Web-based Pension Administra-tion System
An associates-owned company focused on help-ing pension and group benefit plans in meeting and managing their fiduciary obligations. Inde-pendent, innovative and impartial, PBI specializes in risk management.
Coming In August IssueReport and Directory:
Managers of US Assets
eMail John L. McLaine
�
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22 Benefits and Pensions Monitor | June 2014
PENAD PENSION SERVICES LIMITED Matthew Price, Vice-president, Global Business Development; 194 Weber St. E., Kitchener, ON N2H 1E4 PH: 519-743-9000 Fax: 519-743-8346 eMail: [email protected] Web: www.penad.ca Client Profile (By # of Employees) 1 to 100: 3 101 to 500: 3 501 to 1,000: 2 1,000+: 15 Professional Staff: 15 Group Benefit Services: DB Pension Plans, DC Pension Plans, Actuarial Services Investments Services: Manager Search Record-keeping & Third-party Admin-istration Services: DC Pension Plan Administration, DB Pension Plan Administration, Group RRSP Adminis-tration Software & Technology Services: Benefits Administration, Client Server Technology, DB Pension, DC Pension, Group Life & Health Benefits Administration & Invoicing Software Systems; Social Security/Insurance & Civil Servant Pension Plan Software Systems
PENMORE GROUP INC. Lio Spagnuolo, Managing Partner; 8800 Dufferin St., Ste. 103, Concord, ON L4K 0C5 PH: 905-669-5577 Fax: 905-669-5738 eMail: [email protected] Web: www.penmore.com PENSUL INC. Frederic Belhumeur, Senior Partner; 460-2075 University, Montreal, QC H3A 2L1 PH: 514-288-5900 Fax: 514-288-5787 eMail: [email protected] Web: www.pensul.com PEOPLE CORPORATION Jim Edmands, Regional Vice-president; 2225 Sheppard Ave. E., Ste. 1400, Toronto, ON M2J 5C2 PH: 416-445-0000 Fax: 416-445-2222 eMail: [email protected] Web: www.peoplecorporation.com
PROSURE GROUP* Jason Faulkner, Practice Leader; 1400 - 2225 Sheppard Ave. E., Toronto, ON M2J 5C2 PH: 416-609-0989 Fax: 416-609-9551 eMail: [email protected] Web: www.peoplecorporation.com * A People Corporation Company
PROTECTORS GROUP BENEFITS, THE R. Brian Porter, President; 215 George St. N., Peterborough, ON K9J 3G7 PH: 705-748-5181 Fax: 705-748-4831 eMail: [email protected] Web: www.protec-torsgroupbenefits.com
PROTEUS PERFORMANCE MANAGEMENT INC. Peter Henry, President; 250 Ferrand Dr., Ste. 303, Toronto, ON M3C 3G8 PH: 416-421-3557 Fax: 416-421-1348 eMail: [email protected] Web: www.proteusperformance.com # of Clients: 105* Professional Staff: 15 Group Benefit Services:
don Hart, CEO; 310-700 Richmond St., London, ON N6A 5C7 PH: 888-327-5777 Fax: 519-675-1331 eMail: [email protected] Web: www.select-path.ca* 50% ownership of Carswell Partners Human Resources Advisory
SMITH PENSION & ACTUARIAL CONSULTANTS Donald M. Smith, Partner; Ste. 2000, 1188 W. Georgia St., Vancouver, BC V6E 4A2 PH: 604-443-3712 eMail: [email protected]
SPECIAL BENEFITS INSURANCE SERVICES Gavin Prout, Vice-president; 366 Bay St. - 7th Floor, Toronto, ON M5H 4B2 PH: 416-601-0429 Fax: 416-601-0308 eMail: [email protected] Web: sbis.ca SPENCER HEALTH NETWORK INC., THE Donald Sklar, Managing Director; 675 Cochrane Dr., East Tower - 6th Floor, Markham, ON L6A 4C1 PH: 416-512-1616 Fax: 416-800-2708 eMail: [email protected] Web: www.spencerhealth.com
STEVEN COHEN INSURANCE AGENCY INC. Steven R. Cohen, President; 200 Evans Ave., Ste. 201, Toronto, ON M8Z 1J7 PH: 417-250-1166 Fax: 416-259-5885 eMail: [email protected] Web: www.ste-vencohenins.ca
DB Pension Plans, DC Pension Plans, Pension Gover-nance, Investment Consulting, Administration/Actuarial Evaluation & Search, Executive Retirement Plans, Retire-ment Planning Investments Services: Investment Consulting, Manager Search, Performance Measure-ment, Asset Allocation, Portfolio Modelling, Attribution Analysis, Compliance Investment, Policy Development, Education & Communication, Risk Management, Tran-sition Management, Pension Governance, Foundation Governance, Retirement Planning Workshops/Seminars, Retirement Planning Counseling, Administration Review & Search, Executive Retirement Plans Software & Technology Services: Portfolio Style Analysis, Invest-ment Manager Selection, Fund Reporting, DC Pension * Plan Sponsors (Defined Benefit, Defined Contribution), Foundations, Family Trusts
RALPH MOSS LIMITED Jeanne D. Foot, President; 102 - 200 Town Centre Blvd., Markham, ON L3R 8G5 PH: 905-513-9868 Fax: 905-513-9893 eMail: [email protected] Web: www.ralphmoss.ca
RBC INVESTOR & TREASURY SERVICES Scott Mac-Donald, Managing Director, Pensions; 155 Wellington St. W., Toronto, ON M5V 3L3 PH: 416-974-9548 Fax: 416-974-0073 eMail: [email protected] Web: www.rbcits.com
RETIREMENT EDUCATION CENTRE INC. Avrom (Av) Lieberman, President; 151 Frobisher Dr., Unit B-108, Waterloo, ON N2V 2C9 PH: 800-637-6140 eMail: [email protected] Web: www.iretire.org ROBERTSON, EADIE & ASSOCIATES LTD. John Deinum, Partner; 481 Morden Rd., Ste. 210, Oakville, ON L6K 3W6 PH: 905-338-7002 Fax: 905-338-7022 eMail: [email protected] Web: www.re-a.com
RUSSELL INVESTMENTS Tom Lappalainen, Director, Strategic Advice; 100 King St. W., Ste. 5900, Toronto, ON M5X 1E4 PH: 416-640-2472 Fax: 416-362-4494 eMail: [email protected] Web: www.rus-sell.com/ca/ Client Profile (By # of Employees) 1,000+: 1,800 Other Offices: Montreal, Calgary, Vancouver Professional Staff: 572 Group Ben-efit Services: DB Pension Plans, DC Pension Plans Investments Services: Investment Consulting, Manager Search, Asset Allocation, Portfolio Model-ling, Policy Development, Education & Communica-tion, Risk Management, Transition Management, Implemented Solutions, Governance Reviews, Asset Liability Studies
RWAM INSURANCE ADMINISTRATORS INC. Dan Galloway, Chief Operating Officer; 49 Industrial Dr., Elmira, ON N3B 3B1 PH: 519-669-1632 Fax: 519-669-1923 eMail: [email protected] Web: www.rwam.com SELECTPATH BENEFITS & FINANCIAL INC.* Gor-
Benefits and Pensions Monitor directories can be found at www.bpmmagazine.com
BENEFIT & PENSION CONSULTANTS ANNUAL DiRectoRy
SEGAL ROGERSCASEY CANADA* Ruo Tan, President; 65 Queen St. W., Ste. 2020, Toronto, ON M5H 2M5 PH: 416-642-7792 Fax: 416-304-0570 eMail: [email protected] Web: www.segalrc.ca Other Offices: Montreal, Edmonton Profes-sional Staff: 7 Investments Services: Invest-ment Consulting, Manager Search, Performance Measurement, Asset Allocation, Portfolio Model-ling, Attribution Analysis, Compliance Investment, Policy Development, Education & Communication, Risk Management, Transition Management, Port-folio Management, Investment Research, Invest-ment Product Design Software & Technology Services: Investment Management, Portfolio Style Analysis, Investment Manager Selection* Member of The Segal Group
Segal Rogerscasey Canada (www.segalrc.ca), a member of The Segal Group, is a leading global investment solutions firm that provides innova-tive, client-driven consulting advice and outsourc-ing solutions. The firm has been in operation for more than 40 years in Canada and the United States. Clients include corporations, non-profit organizations, endowments, foundations, state and local governments, and joint boards of trustees administering multi-employer benefits plans. The firm works with financial service firms through Rogerscasey, a division of Segal Advisors. The firm is also a founding member of the Global Investment Research Alliance.
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June 2014 | Benefits and Pensions Monitor 23
STINER GROUP BENEFITS SOLUTIONS INC. Monica Stiner, President; 1188 Bonnybank Ct., Oakville, ON L6M 1V6 PH: 905-469-6819 Fax: 905-469-4682 eMail: [email protected] Web: www.stinergroup.ca STRATEGIC BENEFITS & INSURANCE SERVICES LTD. Debra Dobing, Owner & Employee Benefits Con-sultant; 945 Princess St., Kingston, ON K7L 3N6 PH: 877-507-4433 Fax: 613-507-4401 eMail: [email protected] Web: www.strategicins.ca
STRATEGIC INCOME SECURITY SERVICES LTD. David Lee, Senior Consultant; 501 - 4445 Lougheed Hwy., Burnaby, BC V5C 0E4 PH: 604-633-2114 Fax: 604-633-2115 eMail: [email protected]
SUSTAINALYTICS Heather Lang, Director, Institutional Relations Canada; 215 Spadina Ave., Ste. 300, Toronto, ON M5T 2C7 PH: 416-861-0403 Fax: 416-861-0183 eMail: [email protected] Web: www.sustainalytics.com
T. I. HULL BENEFIT CONSULTANTS CORP. Brent R. Fra-ser, Senior Vice-president & Practice Leader; 200 Bay St., Ste. 600, Toronto, ON M5J 2W4 PH: 416-865-0131 Fax:
WINCH GROUP INC., THE Gary Winch, President; 3027 Harvester Rd., Burlington, ON L7N 3G7 PH: 905-639-4287 Fax: 905-639-9352 eMail: [email protected] Web: www.winchgroup.com
WORKPLACE PENSION SOLUTIONS (CANADA) INC. Scott Aver, Managing Director; 1066 W. Hastings - Ste. 2000, Vancouver, BC V6E 3X2 PH: 604-904-0700 Fax: 604-669-3844 eMail: [email protected] Web: www.wps-canada.com BPM
416-865-0896 eMail: [email protected]
T.E. WEALTH Steven Belchetz, President; 26 Wellington St. E., #710, Toronto, ON M5E 1S2 PH: 416-366-1451 Fax: 416-368-9801 eMail: [email protected] Web: www.tewealth.com THOMAS MURRAY IDS Janet Wynn, Director, Busi-ness Development - North America; 5000 Yonge St., Ste. 1901, Toronto, ON M2N 7E9 PH: 416-628-3872 eMail: [email protected] Web: ids.thom-asmurray.com
THORPE BENEFITS Roger Thorpe, President; 402-45 St. Clair Ave. W., Toronto, ON M4V 1K9 PH: 416-966-9229 Fax: 416-966-1701 eMail: [email protected] Web: www.thorpebenefits.com TOWERS WATSON Nicolas Crook, Managing Consul-tant; 175 Bloor St. E., Ste. 1701, Toronto, ON M4W 3T6 PH: 416-960-2773 Fax: 416-960-2819 eMail: [email protected] Web: www.tower-swatson.com TRG GROUP BENEFITS & PENSIONS, INC. Greg Pal-lone, Managing Director; Ste. 800 - 1177 W. Hastings St., Vancouver, BC V6E 2K3 PH: 604-714-4400 Fax: 604-714-4401 eMail: [email protected] Web: www.trggroup.com
TRI FIT Susan Pridham, President; 1307 Devon Rd., Oakville, ON L6J 2L7 PH: 905-845-0006 Fax: 905-845-0020 eMail: [email protected] Web: www.trifit.com WESTCOAST ACTUARIES INC. Stephen Cheng, Manag-ing Director & Senior Consulting Actuary; 908 - 1166 Alberni St., Vancouver, BC V6E 3Z3 PH: 604-730-1898 Fax: 604-730-1886 eMail: [email protected] Web: www.westcoast-actuaries.com WESTERN COMPENSATION & BENEFITS CONSUL-TANTS Barry D. Cook, Partner; 2000 - 1188 W. Georgia St., Vancouver, BC V6E 4A2 PH: 604-683-9155 Fax: 604-687-2315 eMail: [email protected] Web: www.wcbc.ca
WHITE WILLOW BENEFIT CONSULTANTS INCOR-PORATED* Cathy Fuchs, Practice Leader; 212-86 Ring-wood Dr., Stouffville, ON L4A 1C3 PH: 905-640-9142 Fax: 905-640-2349 eMail: [email protected] Web: www.whitewillow.ca * A People Corporation Company
WIEGERS FINANCIAL & BENEFITS Cliff & Deb Wieg-ers, Partners; 120 33rd St. E., Saskatoon, SK S7K 0S2 PH: 306-244-0949 Fax: 306-244-4026 eMail: [email protected] Web: www.wiegers.ca
Benefits and Pensions Monitor directories can be found at www.bpmmagazine.com
BENEFIT & PENSION CONSULTANTS ANNUAL DiRectoRy
Information for this directory was provided by the participants. Benefits and Pensions Monitor takes
no responsibility for the information provided.
WILLIAMSON GROUP, THE Don Williamson, President; 225 King George Rd., Brantford, ON N3R 7N7 PH: 800-265-9973 Fax: 519-756-5773 eMail: [email protected] Web: www.williamsongroup.com Client Profile (By # of Employees) 1 to 100: 220 101 to 500: 87 501 to 1,000: 15 1,000+: 13 Professional Staff: 75 Group Benefit Services: Group Benefit Plans, DB Pension Plans, DC Pension Plans, Actuarial Services, Administration Outsourcing Investments Services: Investment Consulting, Manager Search, Asset Allocation, Policy Development, Education & Communication, Risk Management, Institutional Brokerage, Transition Management Healthcare Services: Disability Management, Claims Manage-ment, Return To Work, Drug Cost Management, Employee Assistance Program Record-keeping & Third-party Administration Services: Claims Adjudication, Claims Payment, Administrative Sup-port, Call Centre, Premium Billing & Collection, Eligibility Verification, Healthcare Spending Account Administration, Claims Advocacy, DC Pension Plan Administration, DB Pension Plan Administration, Group RRSP Administration Software & Technol-ogy Services: Benefits Administration, DB Pension
Providing integrated solutions for employer spon-sored group benefits, pensions, and disability man-agement that foster healthier and more productive work environments—experience the difference between being listened to, and being heard.
SEGAL GROUP, THE Cameron McNeill, Senior Vice-president; 45 St. Clair Ave. W., Ste. 802, Toronto, ON M4V 1K9 PH: 416-969-3963 Fax: 416-961-2101 eMail: [email protected] Web: www.segalco.ca Other Offices: Mon-treal, Edmonton Professional Staff: 20 Group Benefit Services: Group Benefit Plans, DB Pen-sion Plans, DC Pension Plans, Actuarial Services, Asset Liabilty Modeling, Participant Communica-tions Investments Services: Investment Consulting, Manager Search, Performance Measurement, Asset Allocation, Portfolio Modelling, Attribution Analy-sis, Policy Development, Education & Communica-tion, Risk Management, Transition Management Healthcare Services: Plan Design & Budgeting, Claims & Eligibility Audits, Plan Data Analysis, Well-ness, Vendor Bidding Software & Technology Services: Multi-employer Fund Website Develop-ment, Information Technology Assessment, Tech-nology Acquisition & Implementation Operation & Organization Assessments, Feasibility Studies for Benefits Administration Options, Liability Driven Investing, Asset Liability Modeling
The Segal Group (www.segalco.ca) is a lead-ing employee benefits, compensation, human resources, actuarial, and investment consulting firm in Canada. The firm is headquartered in New York and has nearly 1,000 employees throughout the U.S. and in Canada. Clients include state and local governments, multi-employer pension and health and welfare plans, corporate and non-profit employers, and professional service firms.
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level Of retirement Income: What Is The Employer’s role?
By: Eric Tardif
24 Benefits and Pensions Monitor | June 2014
| DC PENSIONS |
What role do employers or sponsors of a capital accumulation plan play in meeting member retirement goals? Do they have any influence on a member’s level of retire-ment income? These are major questions
that extend beyond philosophical musings. When employers decide to create or participate in a capi-
tal accumulation plan, they make a moral decision to try to enhance the well-being of employees beyond the employees’
active contribution to the business and to play a role in prepar-ing for their retirement.
MissionThe mission or purpose of a pension plan is to provide pen-
sion benefits to members. A pension plan is an important com-ponent of the overall compensation package that complements the benefits provided by government plans and personal sav-ings to provide greater financial security for members after
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| DC PENSIONS |
June 2014 | Benefits and Pensions Monitor 25
retirement. Employer contributions may be considered as deferred wages and members must be made aware of this. Moreover, if employees are not educated on the importance of retirement plan-ning, it is quite possible that they will have to retire later than anticipated. This decision could have a significant impact on the employer in question.
So how can employers help members achieve the plan’s objective?
First of all, here’s a reminder on how retirement income is calculated in a cap-ital accumulation plan. The basic equa-tion is always the same, regardless of the type of plan:
Benefit = contributions + net income
As a result, two elements can be worked on to increase retirement income: total contributions and invest-ment income net of expenses.
With regard to the contribution level, the objective is to maximize opportuni-ties. Don’t worry, we are not saying that employers necessarily have to increase their plan contributions if they want to help employees prepare financially for retirement. We are aware that employers must respect their own ability to pay and their overall compensation policy. How-ever, one of the roles of an employer who sets up a pension plan is to educate employees about the importance of par-ticipating and preparing for retirement.
Proper Buy-inEmployers must start by getting
proper buy-in to their pension plan and by properly explaining the level of employer contributions, that employer contributions are part of overall com-pensation, and that employees should maximize employer contributions in order to maximize their earnings. This means that if your pension plan provides a balanced formula (matching contribu-tions) and that the level of employer con-tributions is directly linked to the level of employee contributions, it is the duty of the plan sponsor to ensure employees know and understand that if they do not maximize the level of employer contri-butions, they deprive themselves of part of the total compensation available to them. In other words, they would basi-cally be leaving money on the table.
It is, therefore, paramount for
employers to implement a good commu-nications plan, in co-operation with their suppliers, to ‘sell’ the pension plan. The employers’ communications plan should also be able to convince employees to set a personal and realistic objective for the replacement of pre-retirement income. We know that pension plan members who take the time to set a retirement goal tend to increase their contribution levels. The task becomes simpler when members set a target with the help of available tools. They can see whether they are nearing their target and, if they want to achieve the desired level of pre-retirement income replacement at the expected retirement age, what adjust-ments must be made.
It is important to use available retire-ment modelling tools because if you look only at the accumulated amounts in a defined contribution pension plan, for example, it is difficult to figure out whether or not you are on your way to reaching your goal. Indeed, what would be the retirement income of a mem-ber who has accumulated $300,000, $400,000, or even $700,000? It would be quite abstract for most of us.
Since one of the objectives is to increase total retirement savings, an employer could also allow employees to contribute additional sums to their pen-sion accounts or set up additional plans to which the employees could contrib-ute through payroll deductions, such as a group RRSP or a group TFSA. A plan design that forces employees to con-tribute to receive the employer match is a good solution to increase awareness about contributing, as long as the for-mula seems generous in the eyes of the employees.
By The HandThe other element of the equation is
net investment income. The role of the employer is, therefore, to put in place proper investment options, giving every-one the ability to achieve their perfor-mance objectives according to their level of risk tolerance. We believe that the best solution to help members is to provide target date funds, combined with a lim-ited ‘cafeteria’ offering of more specific investment options.
On the one hand, target date funds guide members who don’t have the required level of knowledge, interest,
or time. On the other hand, a limited cafeteria offering provides an inter-esting solution to those who want to make investment selections them-selves. Again, the important thing is to communicate and explain to plan members the different options avail-able to them.
The intent is to maximize the yield-risk relationship – that is, to implement investment solutions that try to maxi-mize the expected yield according to the desired risk level, while providing good capital protection, which is to say that they take calculated risks. As indi-cated in the capital accumulation plan guidelines and in any good governance plan, properly tracking your investment options will help ensure you always have a powerful overall investment solution, which in the long term will likely generate added value.
Last VariableFees are the last variable in which
the employer may play a role in achiev-ing the members’ retirement objectives. Employers must make sure that they are paying a fair price for the investment solution and the tools available. The question is whether they are actually getting value for money. When mak-ing a decision regarding the addition or removal of an investment option, man-agement fees should be part of the equa-tion. We are not suggesting that employ-ers simply choose the cheapest solution, but rather the ones that will allow them to maximize expected net performance.
An employer can play an important role in employees’ retirement income levels, and not only by increasing contri-butions to the plan. The important thing is to regularly communicate with members to ensure they understand their plan and the various tools available to help them make the right decisions. Retirement is an important issue for the company, and we all have a role to play in ensuring a comfortable retirement with an adequate level of income for all. BPM
Eric Tardif is senior consultant, investment consulting, for DC Con-sulting, at Aon Hewitt.
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rising rates Are On The horizon: how Absolute return strategies Benefit Fixed Income Portfolios
By: Ben Steiner & Alex Johnson
26 Benefits and Pensions Monitor | June 2014
| INVESTMENT |
Absolute return fixed income strategies have received increased interest over recent years as investors anticipate interest rates moving higher. Retail and institutional investors alike view fixed income as a lower risk allocation compared to
equities and alternatives. However, in a rising rate environment, bond math requires that prices fall for fixed income securities with positive duration. Absolute return fixed income strategies
provide the opportunity to not just avoid this risk associated with rising rates, but also to benefit from them. The solution is not the replacement of traditional strategies with absolute return strategies, but rather a combination of the two that is superior to each one individually in the longer term.
Current Conundrum The current interest rate environment presents an inflection
point for investors: anticipating that interest rates will move higher, but, at the same time, cognizant that fixed income still features in their asset allocations. Most investors benchmark their fixed income portfolios against an index that has positive duration. Investors are currently facing a conundrum: even if they are able to outperform a market bond index consistently, the total return in a rising rate environment is likely to be nega-tive. Or, in other words, a manager will have achieved only slightly better, but still negative, performance.
Expanding traditional core fixed income strategies to ‘plus’ sectors may not help in rising rate environments either. This is true not only because these portfolios are still benchmarked
Bond yields have fallen for 30 years (Figure 1) and some have called it ‘the end of the bond bull market.’ In a low, but rising rate environment with persistent bouts of vola-tility, investors are turning to strategies such as absolute return. As rates rise, many investors believe they will need to reallocate assets away from traditional fixed income strategies correlated with the direction of interest rates and move to pure alpha-generating sources, with returns uncorrelated with those movements.
Figure 1
‘The End Of The Bond Bull Market’. Yields Have Fallen Over The Last 30 Years.
US 10 years treasury yield. Source: Bloomberg.
27 Go to page 3 CONTENTS
strategies. Accordingly, if one consid-ers the risk-reward surface on a forward looking basis, utilizing the generally held belief that interest rates are to rise over the medium term, under these cir-cumstances, the headwind could easily become a tailwind for absolute return strategies.
The surface (Figure 4) shows the relationship between portfolio duration, yield change, and the resulting return of a portfolio. Portfolios with durations
near zero experience no return, regard-less of yield change (white-shaded sur-face areas). Portfolios with positive duration experience losses as yields rise (red-shaded surface areas). Portfo-lios with negative duration experience gains as yields rise (green-shaded sur-face areas). In a period of rising rates, an absolute return allocation – with the ability to take short duration exposure –could improve the total return of a fixed income investment program.
| INVESTMENT |
June 2014 | Benefits and Pensions Monitor 27
to an index with positive duration, but also because spread compression only enhances relative returns. To compen-sate for this, some investors may allow their managers to manage portfolio dura-tion asymmetrically. However, this still only mitigates the problem of likely real-izing absolute negative returns.
Going further takes us to an abso-lute return framework, where strategies are not managed relative to an index of assets. Portfolio interest rate risk can be positioned to benefit in both declin-ing and rising rate environments. This means that portfolio duration is managed within an absolute duration constraint, for example, ±3 years.
Case For Absolute Return Since investors allocate in the context
of a portfolio, we can demonstrate how an absolute return allocation can enhance the risk-reward profile of a fixed income portfolio. For simplicity, we assume that investors are originally invested only in a U.S. core strategy (using the Bar-clays Capital U.S. Aggregate Index as a proxy). The efficient frontier (Figure 2) shows the risk-reward characteristics of adding incremental allocations of 25 per cent to an absolute return strategy.
Moving away from 100 per cent in the Barclays U.S. Aggregate Index into a combination including 25 per cent or 50 per cent of an absolute return strategy would have significantly reduced volatil-ity, but only marginally reduced return. The impact of this would have been to increase the risk adjusted return of an investor’s fixed income portfolio.
In addition, it is illustrative to show how monthly returns and yield changes are related (Figure 3). The Barclays Capital U.S. Aggregate Index has a clear negative correlation with one-month rate changes (Figure 3 – left). Figure 3 – right shows the relationship between rate change and return of FFTW’s Absolute Return Composite. The strong negative relationship is absent; in fact, the corre-lation is negligible (0.09).1
While these charts clearly demon-strate several attractive features of abso-lute return strategies such as the FFTW example, they use historical data and the period in question had the head-wind of falling interest rates for the absolute return strategy, whereas fall-ing rates are a tailwind to traditional
Annu
aliz
ed R
etur
n μ
(%)
4.90%
4.80%
4.70%
4.60%
4.50%
4.40%
4.30%
4.20%
4.10%
Risk & Return: 31 Oct. 2006 to 31 Dec. 2013
25% FFTW Abs Rtn Composite/75% Barc US Agg
50% FFTW Abs Rtn Composite/50% Barc US Agg
75% FFTW Abs Rtn Composite/25% Barc US Agg
100% FFTW Abs Rtn Composite
100% Barclays US Agg
Annualized Volatility σ (%)
Figure 2
Efficient Frontier: FFTW Absolute Return + US Core
Data: 31-Oct-2006 to 31-Dec-2013. Source: FFTW.
2.20% 2.40% 2.60% 2.80% 3.00% 3.20% 3.40% 3.60%
■
✲
✛
◆
●
Retu
rn 1
Mon
th
Retu
rn 1
Mon
th
3.0%
2.0%
1.0%
0.0%
-1.0%
-2.0%
3.0%
2.0%
1.0%
0.0%
-1.0%
-2.0%
Figure 3
Barclays US Aggregate & FFTW Absolute Return 1-Month Returns Versus 1-Month Yield Changes
Data: 31-Oct-2006 to 31-Dec-2013. Source: FFTW.
-100 -100-80 -80-60 -60-40 -40-20 -200 020 2040 4060 6080 80-120 -120
Barclays Agg Versus Change In Yield FFTW Abs Rtn Versus Change In Yield
Yield Change Over 1 Month (basis points) Yield Change Over 1 Month (basis points)
28 Go to page 3 CONTENTS
28 Benefits and Pensions Monitor | June 2014
| INVESTMENT |
simply active management without the beta exposure. These strategies describe just one way to package active manage-ment. Numerous approaches and prod-ucts over the decades have done the same – proposing a framework for sepa-rating or combining active investment decisions and passive exposures: core/satellite, active/passive, and so on. His-torically, these were all different names for the same thing: combining active decisions with passive exposures in dif-ferent amounts. All require skill by the manager to generate excess return. An absolute return strategy is a product for wrapping active management without any passive beta exposure.
However, absolute return fixed income strategies involve substituting benchmark risk for active management risk. In sum-mary, the success of any absolute return strategy depends on active management skill. Giving skilled investment man-agers increased latitude creates returns unshackled from traditional benchmarks.
However, investment management skill is still the pre-requisite for a successful absolute return strategy. In this respect, they are no different from any other prod-uct or strategy. BPM
Absolute return strategies allow active managers more latitude to imple-ment their ideas. The concept of an ‘unconstrained bond universe’ is inter-preted differently by different managers, but the general direction is away from benchmark tracking.
Increased LatitudeThe market events of 2008 illustrated
the advantage of this increased latitude. Financial theory teaches that uncor-related sources of return are desirable. However, market practice repeatedly demonstrates that the largest need for diversification is when broad markets decline, yet it’s precisely the time when we have the least diversification, when correlations move toward one as markets go into free-fall together.
Absolute return strategies can help mitigate this issue by differing from tra-ditional strategies in three areas: By not being long only – If asset class
correlations move toward one as mar-kets decline and short asset class pos-itions are also permitted, these short positions will benefit.
By not holding asset classes passively (beta exposure) – If all fixed income sectors move in the same direction, passive exposures lead to only one outcome. However, long/short pos-itions within a sector can be profitable regardless of sector direction.
By focusing on total volatility man-agement, rather than tracking error to benchmarks – Understanding the source of the total risk, not just the source of the differences to a bench-mark, can reveal concentration and help avoid associated risks.
‘Absolute’ Not ‘Guaranteed’ ReturnThese strategies do not generate posi-
tive returns in every period. In order to generate returns, we need to take some risk. A long-term positive return will include shorter periods of good, less good, and invariably negative perfor-mance along the way. This is no different to a traditional long-only strategy which outperforms a benchmark over the long-term, but underperforms for shorter periods along the way. Absolute return strategies are not a panacea on their own, rather one part of a longer-term, diversi-fied portfolio allocation.
In fact, absolute return strategies are
Alex Johnson is head of absolute return fixed income for Fischer Francis Trees & Watts (FFTW), a BNP Paribas Investment Partner.
Ben Steiner is senior portfolio manager, absolute return fixed income, for Fischer Francis Trees & Watts (FFTW), a BNP Paribas Investment Partner.
Retu
rn (%
)
3.0%
2.0%
1.0%
0.0%
-1.0%
-2.0%
-3.0%
-4.0%
-5.0%
-6.0%
Figure 4
Risk-Return Surface: US Core + Absolute Return Frontier in Rising Rates
FFTW Abs Rtn Modified Duration – 1.09 as of 31 Dec. 2013, typically in the range of +/-2. Source: FFTW.Barclays US Agg Modified Duration: LBUSMD Index, 5.55 as of 31 Dec. 2013. Source: Bloomberg.
Data: 31-Oct-2006 to 31-Dec-2013. Source: FFTW.
Absolute Return In A Rising Rate Environment
3.0%
2.0%
1.0%
0.0%
-1.0%
-2.0%
-3.0%
-4.0%
-5.0%
-6.0%
Yield Change (basis points) Duration (years)Barclays US Agg
75%Barc/25%FFTW
50%Barc/50%FFTW
25%Barc/75%FFTW
FFTW Abs Rtn
10
0
6 5
4
21
0 -1
-2-3
3
2030
4050
6070
8090
100
29 Go to page 3 CONTENTS
Fire! Fire! Is low volatility A Crowded Trade?
By: Harry Marmer
Picture George Costanza screaming ‘FIRE! FIRE!’ and barreling his way out the door knocking over old women and children and you will have a very good visual idea as to what a ‘crowded trade’ means to an investment manager. Conceptually, a
crowded trade occurs “when a security or strategy has attracted a ‘large’ group of investors” and “a crowded trade becomes ‘bad’ when everyone runs for the exits at the same time.”1
The rise in popularity of low volatility strategies has been nothing short of breathtaking over the past three years with both the explosion of investment research articles and the launch of new products based on this concept.2
It is not surprising that with all this recent attention towards low volatility strategies, some investors have asked ‘are these strategies becoming crowded?’ We address this question and play investment detective investigating potential signs of crowding in low volatility based strategies.
Herd Chases StocksOne could argue that by definition, low volatility stocks can-
not suffer from crowding for as the popular herd chases these stocks, their volatility will increase and correspondingly these securities will exit the strategy. However, a wise investor will respond to this hypothesis by saying ‘this time is different’ which is a certain path to investment ruin. In that case, let us examine if low volatility strategies are becoming crowded.
The classic concept behind a crowded strategy is that there is simply ‘too much capital’ invested in it3 (see Chart 1). As low volatility based strategies are considered ‘smart beta strategies’ and are often viewed as substitutes for market cap index based strategies, let us compare how much capital is invested in each of these approaches. Chart 2 compares assets under manage-ment (AUM) in Canadian low volatility strategies versus the AUM in Canadian market cap index funds. The AUM in mar-ket cap indexed based strategies is more than 15 times greater than the AUM in low volatility based strategies. In the U.S., liberally extending the comparison, the AUM invested in mar-ket cap indices is almost 10 times as large as the AUM in ‘smart beta’ type strategies. It is clear that, relative to index strategies, there is very little capital invested in low volatility strategies.4
Ironically, these comparisons suggest that market cap indexed based strategies may be suffering from crowding. Indeed, this is the case as popular market cap indices undergo a ‘reconstitu-tion effect’ as they are rebalanced so there are significant abnormal returns around stock additions and deletions. This ‘effect’ is caused by the crowds of index fund managers and ETF providers rebal-ancing their market cap based index portfolios and strategies.
No such ‘effect’ has yet to be observed with low volatility indices.
However, there are other possible signals that the low vola-tility investing space is crowded.
To start, is the performance of these types of strategies very different than expected?
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June 2014 | Benefits and Pensions Monitor 29
Chart 1
Too Much Capital Invested In Low Volatility Based Strategies?
Source: Hillsdale Investment Management/
eVestment Alliance/ ETF Insight/Canadian Institutional Network.
Date of fund AUM varies based on fund data
availability. (Nov. 30, 2013 –
Jan. 24, 2014)
AUM By Fund CategoryCdn Low Volatility Versus
CDN Market Cap Index Funds
AUM By Fund CategorySmart Beta Versus
US Market Cap Index Funds
$278
$2,500
AUM
in $
Billi
ons
3,000
2,500
2,000
1,500
1,000
500
0Smart
Beta FundsUS Market
Cap Index Funds
Source: Smart Beta strategies are transparent, rules-based
investment strategies that are designed to provide exposure
to market segments, factors, or concepts. (CFA Society, Russell Investments). Smart Beta date provided by Morningstar as of
Dec. 31, 2013.US Market Cap Index Funds
include institutional passive index funds, retail mutual funds and ETFs. Institutional passive fund data retrieved from eVest-ment Alliance using large/mid/small cap passive index funds as of Sept. 30, 2013. Mutual
fund data by Investment Com-pany Institute as of Dec. 2012.
ETF data provided by ETF Database as of Feb. 3, 2014.
Chart 2
Even AUM Of Smart Beta Strategies Is A Fraction Of AUM Indexed
To Market Cap Strategies
Canadian Low Volatility
$52.9
$3.4
Canadian Market Cap Index Funds
30 Go to page 3 CONTENTS
Low volatility strategies have fairly predictable excess return patterns relative to the market. More specifically, they are expected to outperform (underperform) during extreme market declines (upswings). If these strategies become ‘crowded,’ one would expect that the performance of these strategies would begin to deviate relative to expectations and outperform during market upswings or underperform during market declines.
The live performance of low volatility has been exactly as claimed suggesting no indication of crowding.5
Unattractive ValuationsIf low volatility strategies are crowded with investors, the fun-
damentals for these strategies should be very unattractive and inconsistent with historical experience. In examining some of the typical fundamentals for low volatility, they tend to be currently in line with historical experience. More specifically, low volatil-ity fundamentals are still more stable than the fundamentals of the market cap indices and they continue to illustrate the same con-sistent long-term characteristics relative to the market: smaller or lower cap, similar or lower price/book and price/earnings, and higher dividend yield. There is currently no indication of crowding leading to fundamental deterioration (see Chart 3 to 6).
Factor CrowdingQuantitatively based strategies can suffer from what is
known as factor crowding where too many investors are chas-ing a particular factor or set of factors resulting in an unex-pected sharp deterioration in the strategies utilizing these fac-tors. One particular factor that stands out for low volatility based strategies is higher dividend yield. Are higher dividend yielding stocks illustrating elements of crowding today?
When considering stock investments, retail investors have recently illustrated a preference for higher yielding stocks.
However, equity income flows are only a small percentage of the total equity market (see Chart 7).
More favourably, in examining dividend yield, low volatil-
ity continues to illustrate a strong yield relative to the market consistent with long-term experience.
Still Worried About Crowding?If you are still worried about crowding in low volatility
space, monitor the asset size of your low volatility manager as both lower cap and liquidity are two risk/return premia identi-fied in the low volatility anomaly. Chart 8 illustrates that the dis-economies to size in for Canadian low volatility managers where the larger the assets under management, the greater the trade costs and delay of trades.
To monitor the potential of crowding, consider the following: ‘Read’ the popular press to see where the ‘crowd’ is going
30 Benefits and Pensions Monitor | June 2014
| INVESTMENT |
Chart 3
Valuations: Low Volatility Valuations Are Relatively Stable And In-line With
Historical Experience
Source: Hillsdale Investment Management. Data prior to Oct. 2011 is based on simulation.
Hillsdale Canadian Equity Minimum Risk StrategyPrice To Earnings (Forward)
– Low Volatility – Low Volatility Median – S&P/TSX Composite Index
Chart 4
Valuations: Low Volatility Valuations Are Relatively Stable And In-line With
Historical Experience
Source: Hillsdale Investment Management. Data prior to Oct. 2011 is based on simulation.
Hillsdale Canadian Equity Minimum Risk StrategyPrice To Book
– Low Volatility – Low Volatility Median – S&P/TSX Composite Index
Chart 5
Valuations: Low Volatility Valuations Are Relatively Stable And In-line With
Historical Experience
Source: Hillsdale Investment Management. Data prior to Oct. 2011 is based on simulation.
Hillsdale Canadian Equity Minimum Risk StrategyDividend Yield (%)
– Low Volatility – Low Volatility Median – S&P/TSX Composite Index
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| INVESTMENT |
Harry Marmer (CFA, MBA) is a partner, at Hillsdale Investment Management Inc.
Footnotes *The author would like to thank the following people for their comments: Ari Veittiaho, Arthur Grabovsky, Carmen Staltari, Chen Yongjian, Chris Guthrie, Michael Campbell, Paul Fahey, Paul Kaplan, Roger Clarke, Steve Mahoney, and Tom Lappalainen. 1. Pedersen, Lasse Heje., ‘When Everyone Runs for the Exit.’ (Dec 2009), International Jour-nal of Central Banking, Vol. 5, No. 4, pp: 177-199.2. A quick sampling of published work over the past 40 years reflects this outburst of writ-ten articles over the past four years when 65 per cent (38 articles) of low volatility papers have been published. The author is particularly surprised by this ‘resurrection’ of ideas as the original work by Robert Haugen and Nardin Baker, ‘The Efficient Market Inefficiency of Capitalization-Weighted Stock Portfolios’ appeared in The Journal of Portfolio Manage-ment in 1991 and was actually discussed by the author at several conferences in 1992. Roger Clarke and colleagues suggest that from a practical perspective, the industry did not have the “computing power and econometric techniques” required to implement these ideas (Page 1). For example, “large-sample covariance matrixes include many separate security volatility estimates (i.e., 1,000 x 999/2 = 499,500) leading to estimation outliers that can dominate the optimized portfolio, a problem sometimes referred to as error maximization.” See Page 3, in ‘Minimum-Variance Portfolios in the U.S. Equity Market’ by Clarke, Roger, de Silva, Harindra, and Thorley, Steven, in The Journal of Portfolio Management, Fall 2006, pp: 1-14. 3. For more details on the ‘cycle of crowding’ see Page 297 in ‘Hedge Funds: An Analytic Perspective’ by Andrew Lo, Princeton University Press, 2008. 4. It has been suggested that the rise in popularity in index fund investing has contributed to higher systematic equity market risk. For more on this, see the thought provoking article by Rodney Sullivan and James Ziong, ‘How Index Trading Increases Market Vulnerability’ (March/April 2012), Financial Analyst Journal, pp: 70-84.5. For further details on what investors can expect from low volatility strategies please refer to ‘Equity Minimum Risk Strategies: Building Better Portfolios Through Better Math,’ by Harry S. Marmer, March 2014. The low volatility performance and stats shown in this article are based on simulated results of Hillsdale’s Canadian Equity Minimum Risk Strategy.
Track securities holdings in the particular investment you are concerned about
Measure intra-portfolio correlations to see which stocks, factors, or portfolios are moving together and why
If you are managing a low volatility strategy, consider changing the rebalancing schedule, reducing the need for ‘trading’ speed, and employing a liquidity risk management system
Last ThoughtsThe ‘talk’ about crowding in low volatility strategies appears
to be just that, talk. At this point, potential crowding scenarios appear unlikely or too distant in the future for investors with long-term investment horizons to seriously consider. Low volatility strategies are based on the assumption that market
Chart 6
Valuations: Low Volatility Valuations Are Relatively Stable And In-line With
Historical Experience
Source: Hillsdale Investment Management. Data prior to Oct. 2011 is based on simulation.
Hillsdale Canadian Equity Minimum Risk StrategyReturn On Equity (Forward)
– Low Volatility – Low Volatility Median – S&P/TSX Composite Index
Chart 7
Is There Crowding In Yield? Equity Income Flows Are Only A Small Percentage Of The Total Equity Market
* Dividend Index includes stocks with a dividend yield that is 1.3x that of the S&P/TSX Composite yield.
Source: Hillsdale Investment Management. Data as of April 30, 2014.
• Total TSX Composite Aggregate Market Cap: $1,776 Billion
• Total Dividend Index* Aggregate Market Cap: $640 Billion
• Total Canadian Dividend & Income Flows: $9.6 Billion
Estim
ated
Tra
de Im
pact
Cos
t (bp
s)
Chart 8
Liquidity Risk Management Is Important In Low Vol As Liquidity
May Play A Factor In These Strategies, i.e Asset Size Does Matter
*Estimated Trade Impact Cost based on ITG ACE Pre-Trade Estimate Model, VWAP (Volume Weighted Average Price) Strategy. VWAP is a measure of the average price
a stock traded at over the trading horizon. Sometimes used as a trading benchmark. Source: Hillsdale Investment Management.
The Impact Of Portfolio Size On Trade Impact Cost 120
100
80
60
40
20
0100M 500M 1B
Portfolio Size2B 4B 5B
anomalies can exist. As with any anomaly, its characteristics can change or it can decay over time. One day, this strategy may indeed become crowded. However, there are currently no signs of decay caused by crowd popularity. BPM
June 2014 | Benefits and Pensions Monitor 31
32 Go to page 3 CONTENTS
The Game-changing Conversation
By: Nathalie Laporte & Éric Filion
Two years ago, we were approached by this pub-lication to write an article about the emergence of social media and technology in the group pension and benefit industry. In that piece, we referred to a Mercer study that opined that
they would become an essential part of our business within 24 months. Virtual client connectivity and online services would become the norm such that more transactions would be con-ducted through smart devices than desktop computers.
At the heart of the article was the notion that these new tools – while greatly convenient for the client – really represented a competitive opportunity for the service provider.
Fast forward a little over 24 months and social media and smart devices have indeed become the norm. And with their widespread adoption, the focus has returned to the client. Before, these tools provided service providers with a more attractive, streamlined and cost-efficient service offer.
Now, the client is in the driver’s seat. Since he can access a lot of information on-demand, he knows what’s available from our industry as a whole. That means he’s much better informed and more demanding: he now wants better access with new and improved social media tools.
Ahead Of The CurveConsidering the competitive nature of the group pension and
benefit industry across Canada, social media has also helped us stay ahead of the curve to keep clients satisfied. In terms of the benefit business, it helps to speed up claim processing, which is very attractive to clients. It also facilitates information shar-ing to help clients visualize all the possible options when faced with important health and/or retirement decisions. The result is that they feel reassured that they’ve made the right decision. Secondly, it’s become successful because it starts a conversa-tion between the client and the plan provider through a variety
32 Benefits and Pensions Monitor | June 2014
| TECHNOLOGy |
Social Media And Smart Devices Have Become The Norm
33 Go to page 3 CONTENTS
of on-demand communications methods. This means that the plan provider and insurer can: Reach more clients to address their
questions and concerns Use this information to take a regular
pulse or measurement of their clients’ needs to ensure their products and services are updated; this can also lead to the development of new prod-ucts or services
Communicate back with information or educational tips, which help keep clients encouraged and engaged in their plans
Communication And EducationThe group benefit insurance (GBI)
and group retirement savings (GRS) businesses at Desjardins Insurance had similar approaches and outcomes when they set up their own social media tools. For GBI, social media helped bring them closer to clients by integrat-ing it into their other communication channels. By having multiple points of contact, clients were able to ask ques-tions and receive timely replies. It was also able to use it as an awareness-raising tool by posting information and video clips to help empower clients to make healthier lifestyle choices. For example, a common concern among clients is the rising cost of prescription drugs. This was addressed by post-ing videos to YouTube that explained generic drugs and their associated cost savings.
Another benefit of using social media is that it allows for anonymity, which is very helpful when the client has ques-tions about sensitive health issues. This makes it easier to discuss taboo topics. ‘Big problems’ are nullified when clients feel free to ask anything – on their terms – and receive clear answers in real-time. And that creates peace of mind for clients regardless of their age and tech capabili-ties. In return, their regular feedback is integrated into service offer adjustments and upgrades.
During the process of setting up their social media program, some discoveries were made: When dealing with sensitive informa-
tion that requires strict guidelines for confidentiality, privacy, and ethics, it’s essential to develop a strong strat-egy with clear procedures to handle
social media properly. When sending out a message –
regardless of the medium – people may react and may post their com-ments on social media. It’s impos-sible to control what they’ll say or where they’ll say it, so it’s important to anticipate anything and be ready to respond, when appropriate.
You have to be able to respond to anything in real-time, so it’s essential to develop an elevated level of client service/communications capabilities.
Better-informed clients with access to lots of choices will be much more proactive and engaged, resulting in better health outcomes.
Upping The AnteIn 2010, a group retirement plan
member education and communication program was launched called ‘Your Way, Plain and Simple.’ To connect with the wide spectrum of clients, the program was focused on creating an experience that used a variety of communication tools including social media.
Then in 2012, this theory was put into practice with a pilot project at the Montreal, QC, office of Ubisoft, a video game developer and publisher. Part of the strategy was to find a creative way to engage this tech-savvy group, with
an average age of 33, in a conversation about retirement planning without actu-ally using the word ‘retirement.’
The first part of the project involved creating a closed Facebook group dedi-cated to the Ubisoft team. The objective was to post financial planning tips and ideas and to create a real-time commu-nity where employees could ask ques-tions and get an immediate reply. For this client, it was a logical solution because Facebook was already an integral part of its corporate culture as a communication tool. Creating the page was the easy part, getting employees to participate was the challenge. So to further engage the Ubi-soft employees, the GRS team created a new conversation-starter based on gam-ing technology called augmented reality (AR).
They soon discovered that this tech-nology was more than just a conversa-tion starter, it created quite a buzz. While the Facebook solution for Ubisoft was a perfect opportunity to see how well this medium would perform with the right demographic, the AR discovery was a well-timed added bonus. It proved to be a unique and fun way to get plan mem-bers’ attention to deliver short and mem-orable messages. Then in January 2014, GRS leveraged this success with the launch of its talking AR statement for all
| TECHNOLOGy |
June 2014 | Benefits and Pensions Monitor 33
Augmented reality takes a view of the real-world environment and enhances it with computer-generated
sensory input such as sound, graphics, video, GPS data, or images. It blurs the line between what’s real and what’s computer-gen-erated. In short, it can bring an image to life in a dynamic and engaging way.
While it’s not a totally new concept, as it’s been used in gaming and technical train-ing, AR is becoming more mainstream. For example, in advertising and marketing, a target image can be pro-grammed to launch different
messages. The target is programmed to recognize the image from within the application. Once the application is activated and pointed at the target image, it takes the user to a dynamic message with graphics, sounds, games,
etc. Another cool thing about
AR is that it’s flexible. Tar-get images can be printed on almost anything – a T-shirt, marketing give-away items, postcards, printed pages in newspapers, magazines, post-ers, etc. This is why AR is such a fun tool for every-one, regardless of their age or tech-abilities. The possi-bilities are endless.
What Is Ar?
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34 Benefits and Pensions Monitor | June 2014
| TECHNOLOGy |
when they were offered a wide number of communication channels. Having access to multi-touch points encouraged participants to use more of the tools and services which resulted in increased plan member contributions. For example: Plan members who consulted their
statements online contributed 97 per cent more than members who only received paper statements.
Plan members who used the online
retirement goal tracker contributed 115 per cent more compared to those who didn’t use the tool.
Plan members who received online statements and used the retirement goal tracker contributed 137 per cent more than plan members who used neither.These results supported the theory
that when plan members take an active role, they are inclined to save more. When the client is engaged, they tend to make a more concerted effort.
What’s Next?One thing is clear about the integration
of social media and other technologies in group business, it’s not going away. These examples have proven that you can create a vibrant dialogue between clients and sponsors, which, in turn, leads to an end-less loop of client feedback and continued improvement of products and services.
In terms of group benefits, imagine health-monitoring devices that could tune into a client’s health in order to share preventative information with the client. And in terms of group retire-ment, imagine new employees receiving all their pension and retirement savings material in an AR environment. The days of flipping through a folder full of print material that must be read, understood, signed and returned in quick succession could soon be over. And their orientation video might appear to them as a holo-gram launched from their AR app.
Thanks to these technologies, finan-cial and health education as part of the group pension and benefit service offer will be transformed into a constantly evolving on-demand tool, customized to suit the client on his terms. BPM
group retirement savings plan members. It works by simply downloading the app to a device and then pointing the app at a financial statement. It then comes to life with a short ‘show and tell’ video of how the plan has changed and an explanation of the personal rate of return.
Multi-touch PointsIn a recent survey of plan members,
a higher level of engagement was found
Éric Filion is vice-president, development, marketing, and invest-ment strategies, group retirement savings, at Desjardins Insurance.
Nathalie Laporte is vice-president, product devel-opment and marketing, group benefit insurance, at Desjardins Insurance.
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| PENSIONS |
By: Rupe Prasad & Sonia Massicotte
Irrevocable DesignationShould a member wish to designate
an irrevocable beneficiary, it must be made on the beneficiary form provided by the plan administrator. Once an irre-vocable beneficiary has been appointed, a member may only change it with the beneficiary’s consent.
If an irrevocable designation is made in a will, it takes effect as a revocable designation.
Pre-retirement DeathThe new act also changes the steps
that should be followed when a member dies before retirement. If the member has a spouse at the date of death and the spouse has not waived these rights to the benefit, a copy of the will is not required as the spousal rules under provincial leg-islation supersede those under WESA.
However, where there is no spouse at the date of death or the spouse has waived these rights, the steps below should be followed: Request a copy of the will Check if the will is valid Check if there are any beneficiaries
listed with respect to the pension plan Check the date of the will and the
beneficiary form as the most recent document will be used in determining who the benefit is payable to
Post-retirement DeathOn a post-retirement death, the ben-
efit payable will depend on the option elected at retirement. For a joint and survivor option (no guaranteed period), the surviving spouse at the date of retire-ment is entitled to the benefit so a copy of the will is not required.
However, where a member elects a guaranteed option that has not expired at the date of death, the steps below should be followed: If the member had a spouse at the
The new British Colum-bia Wills, Estates, and Succession Act (WESA) introduced by the BC government on Sep-
tember 14, 2009, came into force on March 31. It replaces four acts that pre-viously governed wills and estates.
In this article, we will answer ques-tions regarding WESA as it relates to pension plans.
Under WESA, members can: appoint a revocable or irrevocable
beneficiary to the benefit designate multiple and alternate bene-
ficiaries change a revocable beneficiary change an irrevocable beneficiary
with the beneficiary’s consentPlan sponsors should also be aware
that under WESA, changes may be required to plan beneficiary forms to reflect the rights granted under WESA.
date of retirement, check the spouse’s waiver of rights form:
I. If the spouse waived the rights to the J&S 60 per cent benefit, but is the designated beneficiary of any guaranteed remaining pay-ments, then a copy of the will is not required. The death benefit is pay-able to the spouse.II. If the spouse waived all the rights to the post-retirement bene-fit, then a copy of the will should be requested.
If the member did not have a spouse at the date of retirement, a copy of the will should be requested.Where a copy of the will is required,
the administrator should follow the steps outlined under the pre-retirement death section where there is no spouse at the date of death or the spouse has waived these rights.
Other ConsiderationsIt is also important to note that exist-
ing beneficiary designation forms are still valid. Members are not required to complete new beneficiary forms due to the introduction of the new act. BPM
June 2014 | Benefits and Pensions Monitor 35
The new B.C. Wills, Estates, And succession Act: What It Means For Pension Plans
Sonia Massicotte (LL.B.) is a lawyer and consultant, at PBI Actuarial Consultants Ltd.
Rupe Prasad (CEBS) is the practice leader of pension administration, at PBI Actuarial Consultants Ltd.
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The Supreme Court of Canada’s (SCC) decision in Indalex1 is best known as an insolvency case. What is less well-known, but equally signifi-cant, is that the SCC’s decision has important implications for pension plan governance. This
article focuses on the pension governance aspects of the case and underscores the importance of having the necessary checks and balances in place to effectively resolve conflicts of interest and avoid potential breaches of fiduciary duty by those involved in plan administration.
Very briefly, Indalex involved a dispute over whether the pri-ority of pension plan member claims to the assets of an insol-vent employer ranked ahead of the court-ordered super prior-ity charge granted in connection with the debtor-in-possession (DIP) loan advanced by the DIP lender to fund the employer’s restructuring efforts during a Companies’ Creditors Arrange-ment Act (CCAA) proceeding. There were three issues before the SCC: whether the super-priority charge ranked below the deemed
trust imposed by the Pension Benefits Act (Ontario) (PBA) on amounts owed by an employer to a pension plan on plan wind-up – the Ontario Court of Appeal had held in favour of plan members that the deemed trust took priority
whether the scope of the PBA deemed trust extended to the entire wind-up deficiency of a pension plan or only to the amounts due and not paid under the PBA amortization schedule for wind-up deficit special payments – the Court of Appeal had held in favour of plan members that the scope extended to the entire deficiency
By: Ian McSweeney & Louise Greig
lessons On Pension Plan Governance From Indalex
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whether the employer as plan admin-istrator was in breach of its fiduciary duties to the plan members in relation to its obligations under the CCAA proceeding/court-ordered super prior-ity and, if so, whether the remedy of a constructive trust over the employer’s assets in the amount of the pension deficiency was appropriate. On this third point, the Court of
Appeal also decided in favour of plan members, holding that while the initial decision to enter into CCAA proceed-ings was not a breach of fiduciary duty, the employer was in breach of its com-mon law fiduciary duties throughout the CCAA proceedings. In the Court of Appeal’s view, these breaches were suf-ficiently egregious to warrant the impo-sition of a constructive trust. Not surpris-ingly, the Court of Appeal’s decision, which represented a departure from prior case law on all three issues, had a chill-ing effect on Canadian credit markets and a major impact on the terms attached to corporate borrowing in Canada.
At the SCC, the plan members were unsuccessful on the determinative issue of whether the deemed trust took prior-ity over the super-priority charge of the DIP lenders (Issue 1). The plan members were successful on the issue of the scope of the deemed trust (Issue 2) and were also successful on their claim that there had been a breach of fiduciary duties by the employer as plan administrator (Issue 3). However, the SCC disagreed with the Court of Appeal’s imposition of a constructive trust to remedy the fidu-ciary breach. It is the latter issue which is the focus of this article. The SCC had some important things to say about the types of conflicts that can arise in pen-sion plan administration and how those conflicts should be dealt with.
The ‘Two Hats’ Theory The possibility of conflicts in pension
plan administration is not a novel issue. Potential conflicts arise from the fact that in most Canadian jurisdictions, pension legislation requires single employers in the private sector to serve in two capaci-ties – as plan administrator and, at the same time, as employer/sponsor. To deal with this inherent conflict, tribunals and courts have developed a theory known as
the ‘two hats’ doctrine. This approach was first articulated in
the 1995 decision of the Pension Com-mission of Ontario (PCO) in Imperial Oil.2 The issue before the PCO was whether the employer was in breach of its fiduciary duties for amending its plan to (prospectively) eliminate an early retirement benefit. The PCO held that the employer plays two distinct roles vis-a-vis the plan and is not an ‘admin-istrator’ (and hence subject to fiduciary duties) for all purposes. The PCO stated:
We do not accept that Imperial Oil was acting in its capacity as administra-tor when it passed the amendments and, therefore, we do not accept that section 22 applied to its actions ... The Act rec-ognizes that an employer may wear two hats in respect of pension plans ... We are of the view that an employer plays a role in respect of the pension plan that is distinct from its role as administrator. Its role as employer permits it to make the decision to create a pension plan, to amend it, and to wind it up ... The exer-cise of the power of amendment was an act of Imperial Oil as employer.
The Imperial Oil case thus estab-lished the principle that an employer is not wearing its ‘fiduciary’ hat when it amends its plan or carries out its other employer duties. This principle has been applied many times since the PCO’s deci-sion, but virtually all the cases involved a challenge to the exercise of the plan amendment power. Indalex is one of the first cases in which the challenge is to the exercise of a different type of employer decision, the decision to seek CCAA protection and related decisions in support of the court-approved super-priority. The questions before the SCC were whether the employer’s actions during the CCAA proceedings resulted in a conflict with its role as plan adminis-trator and, if so, whether the subsequent actions of the employer in its capacity as administrator failed to resolve the con-flict, thus putting it in breach of its fidu-ciary duties to the members.
SCC DecisionThe SCC was unanimous in holding
that Indalex had breached its fiduciary duties to plan members, but struggled with the question of which conflicts led
to the breach of duties, when the con-flicts arose, and the steps that could have been taken to avoid or remedy them.
In contrast to the approach taken by the Court of Appeal, a majority of the SCC insisted that the starting-point for the analysis is not common law fiduciary principles generally, but the specific obligations imposed by the applicable pension statute. Cromwell J. (McLach-lin C.J.C. and Rothstein J. concurring) identified two requirements in the PBA which were relevant in determining Indalex’s obligations in this context: the requirement for an administrator to ensure that payments are made when due and to notify the regulator if they are not and a duty to commence court pro-ceedings when pension payments are not made.
Cromwell rejected the employer’s argument that because the decision to seek CCAA protection was a purely cor-porate decision, all subsequent decisions relating to the CCAA proceedings were also purely corporate decisions. How-ever, he also unequivocally rejected the Court of Appeal’s contention that any business decision which could affect the members’ interests amounted to a breach of fiduciary duty. At best, such decisions may raise potential conflicts that must be resolved to avoid a fiduciary breach. Cromwell J. adopted a test which limited the employer’s fiduciary obligations to functions that are specifically assigned to the administrator under the PBA.
Based on this test, a majority of the SCC held that the conflict in the case arose when Indalex took steps which could have the effect of making it impos-sible for it to satisfy its obligations under the PBA, when it applied for DIP fund-ing.3 The SCC concluded that the breach was Indalex’s failure to recognize the conflict and ensure that its pension ben-eficiaries had the opportunity to have their interests effectively represented in the insolvency proceedings, particularly when Indalex sought the DIP financing approval which imposed the super prior-ity charge.4
However, the SCC did not agree that a constructive trust was an appropriate remedy for the breach. The SCC con-cluded that, among other things, impos-ing a constructive trust would have been
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38 Benefits and Pensions Monitor | June 2014
disproportionate to the breach (the fail-ure to meaningfully address the conflict of interest during the CCAA proceed-ings, particularly as the breach ultimately had no impact on the plan members as their interests were fully represented and carefully considered in the subsequent proceedings).
In summary, a majority of the SCC held that Indalex’s failure was in not recognizing that it was in a conflict of interest vis-a-vis its role as plan admin-istrator when it sought DIP financ-ing approval and that it breached its fiduciary duties when it failed to take measures to address the conflict. A key aspect of the SCC decision, however, is that the existence of the unresolved con-flict did not give the plan members any more rights than they would have oth-erwise had, for example, if the conflict had been resolved by the appointment of a replacement administrator. In fact, Cromwell J. tested the available rem-edies for the plan members by asking the question: if a replacement administrator had been put in place, what would the members have been entitled to? In his view, given the legislative framework, the most they were entitled to receive was notice of the application for DIP financing and the right to be represented in the proceedings. In the view of the SCC majority, plan members would not have been entitled to payment of the pension deficits in priority over the DIP lenders even if the conflict had been ade-quately resolved.
The SCC decision in Indalex high-lights the nature of the conflicts that can arise in the pension context. As men-tioned earlier, the issue addressed in Indalex is not new – the courts and tribu-nals developed the ‘two hats’ approach to deal with the very issue of pension conflicts. While the SCC was critical of the ‘two hats’ doctrine, holding that it focused too much on the classification of a particular decision as ‘administra-tor’ or ‘employer’ and not enough on the consequences of the decision,5 in our view, the basic premise of the ‘two hats’ approach (that an employer plays dis-tinct roles in respect of its pension plans and that it is not subject to fiduciary duties when performing an ‘employer’ function) remains intact.
The Indalex decision further refines the ‘two hats’ approach by articulat-ing the obligation of the employer to be aware of its legal requirements as plan administrator when making corporate decisions and ensuring that it deals with any conflicts which may flow from its statutory obligations.
Practical ImplicationsIn terms of practical implications for
employers, first, it is critical for boards of directors, as the guiding mind of the ‘employer,’ to understand that the type of conflict which arose in Indalex is not a typical corporate conflict of interest. The type of conflict boards are familiar with is where a board member has a personal interest in a decision. This type of con-flict is normally dealt with by prohibiting the conflicted board member from vot-ing on the matter.
The type of conflict in Indalex was different – it was a situation of con-flicting duties. Indalex owed statutory duties to the pension plan members with respect to the funding of its pension plan which conflicted with its corporate duty to seek DIP financing and take other steps relating to the CCAA proceeding. The SCC decision in Indalex suggests that where this type of conflict arises, it is necessary for the board of directors to test its proposed course of action against the actions a hypothetical arms-length administrator would take.
Second, a board must be able to rec-ognize conflicts of duty situations when they arise so that the conflict can be appropriately addressed. Indalex dealt with a conflict of duties in the context of an insolvency, but employers regu-larly make corporate decisions such as selling a business or merging pension plans, which could have a negative impact on pension plan members. A critical take-away from the SCC deci-sion is the importance of building into the plan governance system a process for identifying situations where there is a conflict. This may entail educating board members and others in the com-pany involved in administering the pen-sion plan about the possibility of these types of conflicts.
It may also entail building into the corporate decision-making process a
means to determine whether there is a potential for a conflict of duties. Since a board typically delegates most employer and administrator functions to com-mittees, officers, and staff, this process needs to be built into every level of the governance system. While the exact form this process will take depends on the organization, it must involve asking the question: ‘does this corporate action give rise to legal obligations under the applicable pension statute and is there a potential conflict?’ Since the ques-tion of whether a conflict exists may not be straightforward, the process should involve seeking legal advice (whether internally or externally).
In our view, there will be relatively few business decisions where a direct conflict will arise. For the vast majority of corporate decisions, the employer may take a proposed action even if it nega-tively impacts the employees provided it complies with the procedures laid down in the PBA. However, there are situa-tions, such as the one in Indalex, where there is a direct conflict between the board’s duties to its shareholders and its duties as plan administrator. While there may be no easy solutions to a direct con-flict, dealing with the problem ‘upfront’ should give the employer options and more control over the process than if the issue is dealt with through litigation ini-tiated by plan members. BPM
Ian McSweeney is a partner in the pension and benefits department at Osler, Hoskin & Harcourt LLP.
1. Sun Indalex Finance, LLC v. United Steelworkers, 2013 Canley 77231 (SCC); reversing Indalex Limited (Re), 2011 ONCA 578 (CanLII); reversing Re Indalex, 2010 ONSC 1114 (CanLII) (Indalex)
2. Imperial Oil Ltd. v. Ontario (Superintendent of Pensions) (1995), 18 C.C.P.B. 198 (Ontario Pension Commission) (Imperial Oil)
3. SCC decision, paragraph 2144. SCC decision, paragraph 2225. SCC decision, paragraph 65
BENEFITS & PENSIONS LEGAL FIRMS ANNUAL RepoRt & DiRectoRy
Louise Greig is a partner in the pension and ben-efits department at Osler, Hoskin & Harcourt LLP.
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BENNETT JONES LLP Susan G. Seller, Partner; 3400 First Canadian Place, Box 130, Toronto, ON M5X 1A4 PH: 416-777-5638 Fax: 416-863-1716 eMail: [email protected] Web: www.bennettjones.com Canadian Cities with Offices: Calgary, Edmonton, Ottawa Key Mem-bers of Practice: Toronto - Susan G. Seller Bene-fits and/or Pensions Practice at Firm Since: 2000
BLAKE, CASSELS & GRAYDON LLP Kathryn M. Bush, Partner; 199 Bay St., Ste. 4000, Commerce Court W., Toronto, ON M5L 1A9 PH: 416-863-2633 Fax: 416-863-2653 eMail: [email protected] Web: www.blakes.com Canadian Cities with Offices: Montreal, Ottawa, Calgary, Vancouver Key Members of Practice: Toronto - Kathryn Bush, Jeremy Forgie, Caroline Helbron-ner, Elizabeth Boyd, Jeffrey Sommers; Calgary - Chris Brown, Sean Maxwell; Montreal - Natalie Bussière; Vancouver - Bill Maclagan Benefits and/or Pensions Practice at Firm Since: 1984
BORDEN LADNER GERVAIS LLP Andrew Har-rison, Partner; 4400 - 40 King St. W., Toronto, ON M5H 3Y4 PH: 416-367-6046 Fax: 416-361-2789 eMail: [email protected] Web: www.blg.com Canadian Cities with Offices: Vancouver, Calgary, Waterloo, Ottawa, Montreal Key Mem-bers of Practice: Vancouver - Steve Winder; Calgary - Duncan Marsden; Toronto - Andrew Harrison, Sonia Mak, Markus Kremer; Ottawa - Pamela Cross; Montreal - Francois Morin, Fred-eric Masse Benefits and/or Pensions Practice at Firm Since: before 1985
CAVALLUZZO SHILTON MCINTYRE & COR-NISH Hugh O’Reilly, Partner; 474 Bathurst St., Toronto, ON M5T 2S6 PH: 416-964-5514 Fax: 416-964-5895 eMail: [email protected] Web: cavalluzzo.com Key Members of Practice: Hugh O’Reilly, Freya Kristjanson, Amanda Dar-rach, Adam Beatty, Lauren Sheffield Benefits and/or Pensions Practice at Firm Since: 1983
DAVIES WARD PHILLIPS & VINEBERG Jessica Bullock, Partner; 155 Wellington St. W., Toronto, ON M5V 3J7 PH: 416-863-5503 Fax: 416-863-0871 eMail: [email protected] Web: www.dwpv.com Canadian Cities with Offices: Montreal
goodmans.ca Canadian Cities with Offices: Van-couver Key Members of Practice: Toronto - John Alton, Partner; Monique McAlister, Partner; Gale Rubenstein, Partner Benefits and/or Pen-sions Practice at Firm Since: 1985
GOWLING LAFLEUR HENDERSON LLP Dan Hayhurst, Partner; 1 First Canadian Place, 100 King St. W., Ste. 1600, Toronto, ON M5X 1G5 PH: 416-369-4635 Fax: 416-862-7661 eMail: [email protected] Web: www.gowl-ings.com Canadian Cities with Offices: Montreal, Ottawa, Hamilton, Waterloo Region, Calgary, Vancouver, Moscow, London Key Members of Practice: Toronto - Dan Hayhurst, Cliff Prophet; Montreal - Pierre Pilote, Melanie Morin; Calgary - David Corry Benefits and/or Pensions Practice at Firm Since: 1990
HARRIS & COMPANY LLP Claude Marches-sault, Associate Counsel; 1400 - 550 Burrard St., Vancouver, BC V6C 2B5 PH: 604-684-6633 Fax: 604-684-6632 eMail: [email protected] Web: www.harrisco.com Key Members of Practice: Vancouver - Claude Marchessault, Geoffrey Litherland, Nazeer Mitha Benefits and/or Pensions Practice at Firm Since: 1996
DENTONS CANADA LLP Scott Sweatman or Mary Picard, Partners; 20th Floor, 250 Howe St., Vancouver, BC V6C 3R8 PH: 604-443-7114 Fax: 604-683-5214 eMail: [email protected] Web: www.dentons.com Canadian Cities with Offices: Toronto, Ottawa, Montreal, Calgary, Edmonton Key Members of Practice: Toronto - Mary Picard, Partner, Heather Di Dio, Associate; Vancouver - Scott Sweatman, Part-ner, Colin Galinski, Associate, Taylor Buckley, Associate Benefits and/or Pensions Practice at Firm Since: 1980
FASKEN MARTINEAU DUMOULIN LLP Peggy McCallum, Pensions Practice Group Leader; 2400 - 333 Bay St., Toronto, ON M5H 2T6 PH: 416-865-4372 Fax: 416-364-7813 eMail: [email protected] Web: www.fasken.com Canadian Cities with Offices: Vancouver, Cal-gary, Ottawa, Montreal, Quebec Key Members of Practice: Toronto - Peggy McCallum, Ross Gascho; Montreal - Dominique Monet Benefits and/or Pensions Practice at Firm Since: 1985
FILLMORE RILEY LLP Jody S. Langhan, Partner & Chair of Pension & Benefits Group; 1700-360 Main St., Winnipeg, MB R3C 3Z3 PH: 204-957-8311 Fax: 204-954-0311 eMail: [email protected] Web: www.fillmoreriley.com Key Members of Practice: J. Michael J. Dow, E. Beth Eva, Cy M. Fien, Jody S. Langhan, Lindsay R. Martens
GOODMANS LLP John Alton, Partner, Pension, Benefits & Compensation Group; Bay Adelaide Centre, 333 Bay St., Ste. 3400, Toronto, ON M5H 2S7 PH: 416-597-4101 Fax: 416-979-1234 eMail: [email protected] Web: www.
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HICKS MORLEY HAMILTON STEWART STO-RIE LLP Elizabeth M. Brown, Partner & Chair of the Pension, Benefits & Executive Compensation Practice Group; 77 King St. W., 39th Floor, Box 371, TD Centre, Toronto, ON M5K 1K8 PH: 416-864-7210 Fax: 416-362-3680 eMail: [email protected] Web: hicksmorley.com Canadian Cities with Offices: Waterloo, London, Kingston, Ottawa Key Members of Practice: Toronto - Elizabeth M. Brown, Jordan N. Fre-mont, Stephanie J. Kalinowski, Terra L. Klinck, John A. Prezioso, Rachel M. Arbour, Natasha D. Monkman, Susie S. Taing, Jennifer Del Vecchio, Andrea D. Yau; Ottawa - Lisa J. Mills Benefits and/or Pensions Practice at Firm Since: 1995
KOSKIE MINSKY LLP Michael Mazzuca, Part-ner; 20 Queen St. W., Ste. 900, Toronto, ON M5G 3R3 PH: 416-595-2101 Fax: 416-204-2881 eMail: [email protected] Web: www.kmlaw.ca Canadian Cities with Offices: Vancou-ver* Key Members of Practice: Michael Maz-zuca, Murray Gold, Mark Zigler, Susan Philpott, Roberto Tomassini, Ari N. Kaplan, Norman Tobias, Adrian Scotchmer, Barbara Walancik, Clio Godkewitsch, James Harnum, Lesa Mac-Donald, Sheila O’Toole, Simon Archer, Andrew J. Hatnay, George Dzuro Benefits and/or Pen-sions Practice at Firm Since: 1981* Affiliated with Koskie Glavin Gordon
LANGLOIS KRONSTROM DESJARDINS Tina Hobday, Partner; 1002, Sherbrooke St. W., 28th Floor, Montreal, QC H3A 3L6 PH: 514-282-7816 Fax: 514-845-6573 eMail: [email protected] Web: www.lkd.ca Canadian Cities with Offices: Quebec City, Benefits and/or Pensions Practice at Firm Since: 1991
LAVERY Josee Dumoulin & Francois Parent, Part-ners; 1 Place Ville Marie, Ste. 4000, Montreal, QC H3B 4M4 PH: 514-871-1522 Fax: 514-871-8977 eMail: [email protected] or fparent@
lavery.ca Web: lavery.ca Canadian Cities with Offices: Quebec City, Sherbrooke, Trois-Rivieres, Ottawa Key Members of Practice: Montreal - Josee Dumoulin, Guy Lemay, Catherine Maheu, Francois Parent, Evelyne Verrier Benefits and/or Pensions Practice at Firm Since: 1975
LAWSON LUNDELL LLP Ken Burns, Partner; 1600, 925 W. Georgia St., Vancouver, BC V6C 3L2 PH: 604-685-3456 Fax: 604-669-1620 eMail: [email protected] Web: www.lawsonlundell.com Canadian Cities with Offices: Calgary, Yellowknife Key Members of Practice: Vancouver - Murray Campbell, Ken Burns, Lisa Chamzuk; Calgary - Michael Wol-pert Benefits and/or Pensions Practice at Firm Since: 1992
MCCARTHY TETRAULT LLP Randy V. Baus-laugh, Partner; Ste. 5300, 66 Wellington St. W., Toronto, ON M5K 1E6 PH: 416-601-7695 Fax: 416-868-0673 eMail: [email protected] Web: www.mccarthy.ca Key Members of Practice: Toronto - Randy Bauslaugh, Mark Fir-man, Greg Winfield, Lorraine Allard; Vancouver - Donovan Plomp Benefits and/or Pensions Prac-tice at Firm For: 25 years
MCINNES COOPER Hugh Wright, Partner; 1300 - 1969 Upper Water St., Halifax, NS B2J 2V1 PH: 902-425-6500 Fax: 902-425-6350 eMail: [email protected] Web: www.mcinnescooper.com Canadian Cities with Offices: Charlottetown, Fredericton, Moncton, Saint John, St. John’s Key Members of Practice: Halifax - Hugh Wright, Peter Driscoll, Kiersten Amos; Fredericton - Les Smith Benefits and/or Pensions Practice at Firm Since: 1990
MCMILLAN LLP David Wentzell, Partner; Ste. 4400, 181 Bay St., Toronto, ON M5J 2T3 PH: 416-865-7036 Fax: 416-865-7048 eMail: [email protected] Web: www.mcmillan.ca Canadian Cities with Offices: Vancouver, Cal-gary, Ottawa, Montreal Benefits and/or Pen-sions Practice at Firm Since: 1987
NEWTON HR LAW Mark Newton, Founder; 8 Waterloo Ct., Thornhill, ON L3T 6L9 PH: 416-846-6855 eMail: mnewton@newton hrlaw.com Web: www.newtonhrlaw.com
BENEFITS & PENSIONS LEGAL FIRMS ANNUAL DiRectoRy
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Benefits and Pensions Monitor directories can be found at www.bpmmagazine.com
PIERLOT PENSION LAW James Pierlot, 2200 - 181 University Ave., Toronto, ON M5H 3M7 PH: 416-642-2046 Fax: 416-363-7875 eMail: [email protected] Web: www.pier-lot.ca Key Members of Practice: James Pier-lot Benefits and/or Pensions Practice at Firm Since: 2011
PITBLADO LAW Judith Payne, Partner; 2500 - 360 Main St., Winnipeg, MB R3C 4H6 PH: 204-956-0560 Fax: 204-957-0227 eMail: [email protected] Web: www.pitblado.com Key Mem-bers of Practice: Judith Payne, Partner (Pensions) William Gardner, Partner (Benefits) Benjamin Hecht, Partner (Benefits) Tracey Epp, Partner (Benefits) Benefits and/or Pensions Practice at Firm Since: 1999 (Pensions) 1980 (Benefits)
PRISCILLA H. HEALY Priscilla Healy, Lawyer; Box 15535, Royal York Bloor PO, Etobicoke, ON M8X 1C0 PH: 416-231-2134 Fax: 416-231-2134 eMail: [email protected] Web: pensionlegalhelp.ca
STEIN MONAST L.L.P. Martin Roy, Lawyer; 70 Dalhousie St. - Office 300, Quebec, QC G1K 4B2 PH: 418-529-6531 Fax: 418-523-5391 eMail: [email protected] Web: www.steinmonast.ca Key Members of Practice: Mar-
Key Members of Practice: Toronto - Mark Newton Benefits and/or Pensions Practice at Firm Since: 2014
NORTON ROSE FULBRIGHT CANADA LLP Martin Rochette, Senior Partner; 1 Place Ville-Marie, Ste. 2500, Montreal, QC H3B 1R1 PH: 514-847-4430 Fax: 514-286-5474 eMail: [email protected] Web: www.nortonrosefulbright.com/ca Canadian Cities with Offices: Quebec, Toronto, Ottawa, Calgary Key Members of Practice: Quebec & Montreal - Mar-tin Rochette Benefits and/or Pensions Practice at Firm Since: 1991
OSLER, HOSKIN & HARCOURT LLP Paul Lit-ner, Partner; Box 50, 1 First Canadian Place, Toronto, ON M5X 1B8 PH: 416-862-4730 Fax: 416-862-6666 eMail: [email protected] Web: www.osler.com Canadian Cities with Offices: Toronto, Montreal, Ottawa, Calgary Key Mem-bers of Practice: Toronto - Ian McSweeney, Paul Litner, Tony Devir, Doug Rienzo, Louise Greig, Anna Zalewski, Jon Marin, Laura Stefan, Lesha Van Der Bij (Knowledge Management), Brenda Carson (Senior Document Consultant); Cross-appointed: Litigation - Brett Ledger, David Stamp, Chris Naudie, Alex Cobb, Craig Lock-wood, Kevin O’Brien, Carey O’Connor; Tax - Jack Silverson, Dov Begun; Securities/Corporate Finance - John Black; Calgary - Cross-appointed: Labour & Employment - Damian Rigolo; Mon-treal - Michel Benoit, Julien Ranger-Musiol; Cross-appointed: Research - Anne-Marie Lizotte Benefits and/or Pensions Practice at Firm Since: 1962
tin Roy, Andre Johnson Benefits and/or Pensions Practice at Firm Since: 1988
STEWART MCKELVEY Peter McLellan, Partner; 900 - 1959 Upper Water St., Box 997, Halifax, NS B3J 2X2 PH: 902-420-3200 Fax: 902-420-1417 eMail: [email protected] Web: www.stewartmckelvey.com Canadian Cities with Offices: Fredericton, Moncton, Saint John, Charlottetown, St. John’s Key Members of Prac-tice: Halifax - Peter McLellan, Level Chan; Saint John - Paul Smith Benefits and/or Pensions Prac-tice at Firm Since: 1990
STIKEMAN ELLIOTT LLP Andrea Boctor, Part-ner, Head of the National Pensions & Benefits Practice Group; Ste. 5300, Commerce Court W., 199 Bay St., Toronto, ON M5L 1B9 PH: 416-869-5500 Fax: 416-947-0866 eMail: [email protected] Web: www.stikeman.com Cana-dian Cities with Offices: Montreal, Ottawa, Calgary, Vancouver Key Members of Practice: Toronto - Andrea Boctor; Montreal - Michel Leg-endre Benefits and/or Pensions Practice at Firm Since: 1987
TORYS LLP Mitch Frazer, Partner, Head of Pension & Employment Group; 3000-79 Wel-lington St. W., Toronto, ON M5K 1N2 PH: 416-865-8220 Fax: 416-865-7380 eMail: [email protected] Web: www.torys.com Canadian Cities with Offices: Calgary, Montreal Key Members of Practice: Toronto - Mitch Frazer, Lisa Talbot, Arlen Sternberg, Jessica Bullock, Lynne Lacour-siere Benefits and/or Pensions Practice at Firm Since: 1987 BPM
BENEFITS & PENSIONS LEGAL FIRMS ANNUAL DiRectoRy
June 2014 | Benefits and Pensions Monitor 41
Information for this directory was provided by the participants. Benefits and Pensions Monitor takes no responsibility for the information provided.
For complete event information, visitwww.bpmmagazine.com/benefits_events.php �
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head To Toe return
By: yolanda Billinkoff
Prostate cancer was the furthest thing from 39-year-old Dr. Steven’s mind. As a doctor, he knew the signs. He had no symptoms and no family history. The father of three young children didn’t think a preventive medical screening was necessary. But
then he went to a charity event and won a raffle. The prize was a comprehensive health assessment (CHA).
A moderate exerciser who pays attention to his diet, Dr. Steven was the sort of person everyone expected to pass his physical. But what happened next attests to the potentially life-saving benefits of individual-based approaches to preventive medicine. His blood work included the prostate-specific antigen test and Dr. Steven scored an elevated level of six.
Lower The ScoreFirst his doctor attempted to lower the score with antibiot-
ics, but that led to no change in his level. So next came a pros-tate biopsy. “It’s cancer,” his urologist told him. “And you need prostate-removal surgery right away.”
Turns out that Dr. Steven was lucky; most clinics wouldn’t begin screening with the PSA test until age 48 or 50. But this story is yet another reminder of the value of preventive medi-cine. The old maxim, ‘an ounce of prevention is worth a pound
of cure’ is particularly true today. With screening tools, proper diet, and regular exercise, we really are able to prevent most illnesses before they ever become symptomatic.
So, in an era when most benefits professionals acknowledge the value of prevention, why haven’t more corporations altered their benefit mix to provide more funding to preventive medi-cine?
Today the average Canadian worker’s compensation amounts to $51,550. Of that, $45,000 amounts to financial security – base salary, bonuses, and long-term incentive plans. On average, health and dental coverage consists of $3,500, while RRSPs and other savings plans total $1,700. Meanwhile, prevention is just about the smallest slice of the pie, at $600 annually. But does that make sense? Should human resources managers increase or alter their overall spend on preventive healthcare?
Let’s examine the case for a preventive health perk. A CHA provides clients with every screening measure required to ensure optimum health, in a single morning. Depending on such variables as sex and age, the client might undergo the prostate-specific antigen test, mammograms and pap smears, abdominal ultrasounds, and chest X-rays. There are stress electrocardio-gram tests, maximal stress tests, and respiratory function and
42 Benefits and Pensions Monitor | June 2014
| BENEFITS |
A comprehensive health assessment isn’t something everyone considerswhen spending money on benefits. Should they?
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physical fitness assessments in addition to a full battery of blood tests. On top of that, nutritional evaluations are car-ried out and at least an hour is spent with a physician who specializes in preven-tive medicine. Thanks to onsite labora-tory facilities, the results for every test conducted during an assessment are pro-vided that same day.
Make Sense?But does the CHA make sense? Let’s
consider a 110-employee company with 70 general employees, 20 managers, 10 directors, and 10 people in the execu-tive suite. And let’s give everyone a CHA at different intervals – from the execs who get the CHA every year to the general employees who get it every five years after five years of service. Based on that frequency, the company would have to pay for approximately 36 CHAs a year, on average, which, if one includes group pricing, amounts to $1,845 per employee and a total cost to the company of $66,420. That amounts to $603.82 per employee, per year which is less than one per cent of annual compensation.
So based on 36 CHAs a year, what is typically found among the employees? The Canadian Cancer Society estimates approximately two in five Canadians will develop cancer in their lifetimes and one in four will die of the disease. The inci-dence is higher among men: roughly 46 per cent of Canadian males will get can-cer. In 2013, the Medcan clinic caught 164 cases of cancer, in addition to 632 cases of cardiovascular disease and 191 cases of diabetes.
According to statistics, if 36 CHAs are done for that 110-employee com-pany, we can say with good certainty that a newly diagnosed medical condition will be found in 15 of the 36 employ-ees per year. Three of the 36 will have a potentially serious newly diagnosed medical condition. Among those 36 cli-ents, there will be a 33 per cent chance of detecting some form of cancer, a 100 per cent probability of detecting cardiovas-cular disease, and a 23 per cent chance of catching a case of diabetes.
Catching EarlyCatching such maladies early pays
off. Consider the costs of long-term dis-ability, which will affect one out of 110
employees annually and will cost the organization about $17,500 per case. In a 110-person company, between 10 and 18 employees will go on short-term dis-ability in any single year. And let’s not forget the costs represented by absentee-ism and presenteeism due to illness or chronic health conditions.
So why do other benefits get prece-dence over preventive health? Given that 40 per cent of Canadians will develop cancer in their lifetimes, perhaps we should consider increasing the amount of money we spend on prevention?
In addition to statistics, the shift is jus-tified by pragmatic reasons as well. Pro-gressive medical doctors have maligned the current makeup of Canada’s medical system, which is biased away from pre-vention, preferring to deal with illnesses only after they become serious enough to be problematic. And Canada’s bene-fits mix displays a similar bias – reaction over prevention.
Some HR professionals justify the paltry spend on prevention because annual check-ups and screening blood tests are thought to be the purview of general practitioners, compensated by the public system. But the unfortunate reality of Canadian healthcare means many working professionals don’t have a family physician, making publicly-compensated annual check-ups dif-ficult to arrange. As a nation, we have 25 per cent fewer practicing doctors per 1,000 population than the average OECD country. A Commonwealth Fund survey of 11 developed nations put Canada in last place in terms of acces-sibility to general practitioners. We had the worst score for next-day appoint-ments with physicians, the longest wait times at emergency departments, the longest delays to receive patient infor-mation from outside practices, and the second-longest wait times to see a spe-cialist. Canada’s one-size-fits-all medi-cal infrastructure is not set up to cater to the time-pressed needs of key corporate personnel.
Additional MoneyTo sum up, supporting employees
with additional money, or adjusting the current spend for preventive healthcare, decreases the downstream costs of cancer and other illness-associated absenteeism and presenteeism episodes. Based on
our experience, undergoing a preventive medical/executive physical and discuss-ing with an MD every aspect of health makes individuals more likely to think seriously about their overall wellness. That, in turn, can push the culture of a company into a benevolent spiral.
A health benefit like the CHA for key personnel trickles down into an overall focus on wellness among all employ-ees as junior employees pick up on the fact that good health is key to corporate advancement. They’re more likely to eat better, to exercise regularly, and to drink less.
This benevolent spiral phenomenon likely helps to explain the results of a study that appeared last September in the ‘Journal of Occupational & Environ-mental Medicine.’ Researchers tracked the stock market performance of publicly traded corporations that had won the American College of Occupational and Environmental Medicine’s Corporate Health Achievement Award. The study then compared the healthy companies’ performance with the overall perfor-mance of the market at large. By many different measures, the healthy compa-nies outperformed the market markedly.
When looking at a company’s overall spend on benefits, human resources pro-fessionals tend to favour taking money out. Another consideration to increase morale and boost a company’s ability to retain and attract new employees is additional spending on prevention. HR professionals might consider applying the philosophy they’ve used for den-tistry to preventive medicine. Dental coverage tends to feature shared-cost structures that see companies paying a portion of the overall spend, such as 80 per cent. A similar breakdown could be applied to preventive medical spends. After all, offering preventive healthcare benefits is the ultimate statement that a company is committed to employee health and well-being. BPM
| BENEFITS |
Yolanda Billinkoff is vice-president of sales and account management at the Medcan Clinic
June 2014 | Benefits and Pensions Monitor 43
44
Thank you to our Sponsors!
Eckler Ltd. | Franklin Templeton l Manion Wilkins & Associates l Medavie Blue Cross l Mercer
The Canadian Pension & Benefi ts Institute
2014 Ontario Regional ConferenceOctober 1-3, 2014
The 2014 CPBI Ontario Regional Conference brings together industry leaders who will examine and analyze today’s issues surrounding employee benefi ts, pensions and institutional investment. This conference is designed for all industry professionals – consultants, service providers and plan sponsors. By attending this conference you will get answers to some of today’s most pressing and complex issues. Choose your participation from a selection of workshops and plenaries designed especially for those working in the benefi ts, pensions, investment and human resource fi elds. Achieve the best education to make you more e� ective in your job!
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The International Foundation of Employee Benefit Plans’ ‘47th Annual Cana-dian Employee Benefits Conference’ designs its sessions and workshops around the four key knowledge areas of effective trust fund management: legal, administration, governance, and fund-ing/investment/finance. Sessions look at health and wellness, investments, pen-sions, and governance. It takes place August 10 to 13 in Calgary, AB. Visit www.ifebp.org
“Leveraging the Momentum; Time for Solutions’ is the theme of the ‘2014 ACPM National Conference.’ The program will focus on a range of topics, issues, and solutions in a series of ple-nary sessions and workshops. It takes place September 9 to 11 in La Malbaie, QC. Visit www.acpm.com
‘Winning Strategies: Making the Right Moves’ is the theme of the 2014 ‘CPBI Atlantic Regional Conference.’ Sessions will include an examination of the sustainability of retiree benefit
mation, visit http://www.conference board.ca
David Willows, of Green Shield Canada, and Francois-Joseph Poirier, of Mer-cer, will discuss ‘Oh What a Life on Drugs’ at the ‘CPBI Ontario Regional Conference.’ The session will provide an overview of drug consumption and adherence data as well as an overview of recent drug plan design trends and what other solutions employers are implementing to manage drug spend and improve the health and wellness of their plan members. Other sessions will dis-cuss the risks associated with low mem-ber engagement in defined contribution plans and explore recent developments regarding the accommodation and man-agement of an aging workforce. It takes place October 1 to 3 in Kitchener, ON. Visit www.cpbi-icra.ca BPM
programs by Lee Crowell, of Dalhousie University, and Kirk Shand, of Mercer. They will discuss the impact of the cur-rent challenges on a large plan spon-sor. Other sessions will look at the cost of biologic drugs, risk management in shared risk plans, and best practices for managing medical leave. It takes place September 24 to 26 in Digby, NS. Visit www.cpbi-icra.ca
The changing role of the HR function, its mandate, and value proposition will be among the sessions at the Conference Board of Canada’s ‘HR Summit 2014: The Next Generation of HR.’ The sum-mit focuses on the unprecedented change and innovation that HR leaders are fac-ing as they are asked to play a central role in strategy, driving business growth, and value creation. It takes place Octo-ber 1 and 2 in Vancouver, BC. For infor-
| CONFERENCES |
June 2014 | Benefits and Pensions Monitor 45
For complete event information, visitwww.bpmmagazine.com/benefits_events.php �
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| THE BACk PAGE |
46 Benefits and Pensions Monitor | June 2014
There is less evidence of decline at the bottom of the skill distribution list (where the initial skill levels are low), but strong negative age effects at the top.
Christian Gobel, from the Centre for European Economic Research, shows that many of the human resource prac-tices that have been put in place for older workers are helpful in that they are associated with higher productivity for all employees and that companies that introduce any specific measures for older employees are more productive than are companies that do not. Specifically, the introduction of mixed-aged teams results in higher productivity for both older and younger employees. Other practices, such as equipment changes that miti-gate hearing and vision problems and introducing job assignments that are less physically demanding, also aid older worker productivity. Reduced working hours and general training programs by comparison, had no productivity effects.
Emerging IssueDealing with an aging labour force,
like all business challenges, is more complex than it might first seem. How-ever, the possibility of increased, and not decreased, productivity from older workers obligates us to spend the time to understand this emerging trend. BPM
I can’t say that in my visits to the offices of plan sponsors, money managers, and consultants that I have ever seen the Brit-ish academic journal ‘Labour
Economics’ on anybody’s shelf. This isn’t very surprising. One of the jour-nal’s most popular articles has been ‘The Long-term Labor Market Consequences of Graduating from College in a Bad Economy,’ which I will personally digest for my high school-aged children, but which, like the majority of the journal’s articles, don’t touch on issues of impor-tance to the pension world.
Long-held BeliefsHowever, recently, a complete issue
(Vol. 22, 2013) was devoted to ques-tions surrounding aging and productivity. In doing so, it explodes some long-held beliefs about the consequences of a matur-ing workforce. Here are some highlights: A paper from Bernhard Mahl-
berg, from the Institute of Industrial Research in Austria, notes the familiar demographic change of an increasing elderly workforce and asks what this means for companies and the economy generally. Will an aging workforce be able to sustain economic well-being through increasing productivity? The author found that lower labour produc-tivity and lower wages were related to the share of young workers (not older workers) in companies in the indus-trial and construction sectors. In no other economic sectors were there any negative associations between work-ers aged 50+ with firm productivity or with wages. In other words, older workers are not overpaid relative to their productivity, which contradicts the bell curve shaped simple graph often presented about age and produc-tivity (low productivity in the early years, reaching its highest point in middle age, then declining as people approach retirement age).
Vincent Vandenberghe, from the Uni-versity of Belgium, considers gender
The Consequences Of An Aging Workforce
effects on aging and productivity. He finds that there is no statistical impact of the presence of older men on firm productivity and profits. However, an increase in the share of older female workers (age 50+) depresses firm pro-ductivity and profits to a level which is not compensated by the lower com-pensation that female employees typ-ically receive.
Laura Gordo, from the German Cen-tre of Gerontology, examines how well older workers adapt to change. She documents that older workers have adapted well to technological changes in terms of adjusting their job tasks to rapidly changing demands. This was shown by workers in their 50s experiencing a more rapid growth in more cognitively intense tasks than did workers in their 30s. This was also associated with larger wage increases for workers in their 50s compared to those in their 30s. The results held for all job descriptions.However, not all of our beliefs about
older workers are wrong. David Green and Craig Riddell, from the University of British Columbia, examined aging and literacy skills in Canada, Norway, and the United States. They found that literacy does decline, though modestly, with age.
By: Jim Helik
Jim Helik is a contributing author to the ‘Managing High Net Worth’ course and the ‘Commodities As Investments’ course published by CSI Global Education. He is also one of the first holders in Canada of the Human Resource Management Pro-fessional designation from the Society for Human Resource Management.
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