Green printing, global investments, and the Ontario 2011 budget
This month’s top articles from Buck Consultants, plus links to the latest regulatory updates and the Buck Blog
In this issue:
Technology | Global
Health and Productivity | Canada
Retirement | Canada
Investments and CAP | Global
Legislation | Canada
Will Employees Choose the Greener Options for Office Printing?
“As is so often the case, customers express high interest in being green, but when it comes to people actually acting on their intentions, well…not so much.” In his third feature from the “Executive Sustainability Forum” hosted by Xerox, prominent green blogger Andrew Winston addresses how companies and employees view green printing. Employees say the environment is an important consideration when they decide to print or not, but do they act on it? Read Balancing Will employees choose the greener options for office printing?, by Andrew Winston.
Health and Productivity | Canada
Canadian Companies Lack Strategy, Support To Deal With Workplace Stress
“Not enough resources, not knowing how to measure results, and a lack of priority from leadership are the main reasons cited by the 70 percent of respondents who said they don’t track outcomes.” Read the media release Canadian Companies Lack Strategy, Support To Deal With Workplace Stress. The full Canadian special report on wellness initiatives is available through Working Well: a Global survey of health promotion and workplace wellness strategies.
De-risking: Are You In or Are You Out?
Recent years have highlighted the impact of volatile markets on pension plans and ultimately on sponsors financial statements. 2008 may have been extreme, but such extreme scenarios seem to be the new norm. Buck is hosting a breakfast seminar in its Toronto office to explore some of the steps you can take to reduce that volatility, from establishing clear objectives around how your plans tie in to your corporate business planning or ERM program, to how you can develop a framework to reduce your investment and funding risk.
Presented Thursday, April 28, 2011, from 8:00 a.m. – 9:30 a.m. by Cameron McNeill, Managing Director, Buck Consultants; Steven White, Managing Director, Buck Global Investment Advisors; and Robin Pond, Senior Investment & CAP Consultant, Buck Global Investment Advisors.
Who should attend: CFOs and those involved in pension committee investment decisions.
Click here to RSVP.
International investment team launched at Buck
Buck Consultants, A Xerox Company now offers clients global research and expertise when advising on asset allocation policy and fund manager selection for pension plans and endowments. Buck’s expanded investment consulting services enable clients to access a broader range of fund managers and investment strategies from around the world. Read the media release Buck Consultants Launches Global Investment Advisors Service or visit the BGIA website to learn more about the individual services available.
Ontario Budget 2011
The Ontario government’s last budget before the provincial election has been eagerly awaited by the Province’s pension community. Interest has been high to see if the Ontario government would commit to a firm timeline for implementation of the remaining measures under Bills 236 and 120; or whether the government would continue to follow the wait and see strategy that it has adopted for the past year and defer pension reform into 2012.
Ontario’s Budget 2011 partially answered those questions by:
- Confirming that Regulations necessary to effect Bills 236 and 120 will be posted on the Regulatory register for stakeholder review (although no timeline was given)
- Confirming the government’s intent to introduce the long awaited pension division rules (draft Regulations were posted in March for comments but again no timeline was given to bring them into force)
- Reiterating to clarify and strengthen the rules for contribution holidays and benefit improvements in order to improve plan funding for JSPPs and MEPPs
- Confirming a commitment to implement defined contribution pooled registered pension plans (PRPPs) to be established and administered by financial institutions. The PRPPs would be aimed at increasing pension coverage and pension adequacy for Ontario workers who do not currently have pension coverage. The Province will continue to work with the Finance Ministers of other jurisdictions to implement this initiative nationwide.
- Announcing a series of piecemeal changes (more on this later)
The pension community will be disappointed in Budget 2011 primarily due to the apparent reluctance of the government to specify the timing of when pension reform changes can be expected to occur.
Items of interest…
Pension investment rules
Budget 2011 confirmed the government’s commitment to update Ontario’s pension investment rules to reflect the recent changes to the Federal Investment Rules (i.e. removal of resource concentration limits) and also the future proposed changes to the Federal Investment Rules (10% concentration limit measurement change from book to market value and the Employer self-investment limitation). Subsequent to tabling the budget, the government published Regulation changes which apply the current Federal Investment Rules to Ontario pension plans.
Target Benefit Plans
Budget 2011 confirmed its commitment to review the funding requirement issues for Ontario target benefit MEPPs where plan members are located outside of Ontario.
The budget also provided a commitment to discuss with Finance Canada the changes necessary to permit the introduction of single-employer target benefit plans for Ontario employers.
Permanent Solvency Funding Exemption for JSPPs
Budget 2011 confirmed the government’s commitment to provide a permanent solvency funding exemption for JSPPs as well to implement a number of other measures related to certain JSPPs. The other measures would include enhanced disclosure requirements to plan members and retirees and a prescribed uniform solvency threshold of 85% which would identify those plans required to file annual valuation reports.
Statement of Investment Policies and Procedures
It is proposed that Administrators will be required to file the Plan’s Statement of Investment Policies and Procedure (SIPP) with FSCO and also disclose whether or not the SIPP addresses environmental, social and governance factors.
Other items mentioned in Budget 2011…
Financial-hardship unlocking
The rules on the administration of partial unlocking of pension accounts due to financial hardship will be reviewed to improve its process, but for now, the application fee for a financial hardship withdrawal will be further waived by FSCO.
Member annuity purchase – if pension plan permits
Budget 2011 proposes to add a discretionary portability option for Plans to permit terminating members to elect the direct transfer of lump sum entitlements toward an annuity purchase. At first glance this proposal seems unclear; however, Ontario will eliminate a terminating member’s statutory right to an annuity purchase effective June 30, 2011. This proposal now intends to permit a discretionary Plan annuity provision in place of that eliminated statutory right and this measure has been included in Bill 173 (see below).
Members who cannot be located
Budget 2011 proposes to explore options to handle plan members affected by full or partial wind-up who cannot be located in order to permit the completion of those wind-ups.
New option on plan wind-up for Nortel pensioners
Budget 2011 proposes to provide pensioners with a choice to elect to transfer the commuted value of their pensions to any Life Income Fund (LIF) rather than having an annuity purchased on their behalf. If they do not choose the proposed LIF option, an annuity would be purchased on their behalf. This Budget proposal follows an announcement made earlier in March by the Ministry of Finance concerning the Nortel pensioners.
Bill 173 (Budget Measures, 2011)
This bill was introduced shortly after announcing the Budget but does not address the pension measures announced in the Budget other than the Nortel portability amendment and the annuity portability option. The pension measures in Bill 173 are technical in nature.
Find out more
Detailed budget documents are accessible through the Ontario Ministry of Finance’s website.
If you would like to discuss any of the proposed changes and how they may impact your organization, please contact us.
