Pension plan sponsors using group annuities to transfer risk

Morneau Shepell released the June 2018 issue of its monthly newsletter, News & Views, in which the Company looked at a number of topics including: exploration of buy-out annuities as a risk transfer method; British ColumbiaNew Brunswick and Newfoundland and Labrador’s expansion of certain types of employment leaves in alignment with the federal government’s recent updates to employment insurance (EI) rules; the Ontario Court of Appeal’s treatment of long-term disability (LTD) claims made after termination of employment; and the impact of an Alberta court ruling permitting common law spouses to divide pensions after relationship breakdown.

  • Pension risk transfer activities are growing in Canada – Recent changes in legislation in British ColumbiaQuebecand Ontario and economic pressure on sponsors of defined benefit pension plans have prompted plan sponsors to diversify their assets in order to reduce investment risks. While some sponsors have opted to reduce their allocation to equities, others have moved to a full liability driven investment (LDI) strategy. Since these strategies do not deal with the risk that retirees may outlive actuarial projections, some sponsors are considering the options of purchasing annuities for pension plans. This article discusses in detail the pros and cons and steps involved in buy-out annuity purchases by pension plan sponsors.
  • Employment leave provisions amended in some provinces – Amendments to employment standards legislation in British ColumbiaNew Brunswick and Newfoundland and Labrador have aligned certain types of leave with the federal government’s recent changes to EI rules effective December 3, 2017. The types of leave updated include maternity, pregnancy, parental, child care, compassionate care, care of a critically ill adult, domestic violence leave, and leaves upon the disappearance of a child and death of a child.
  • Injured former employee successful in LTD claim – The Ontario Court of Appeal in MacIvor v Pitney Bowes held in favour of a former employee who submitted an LTD claim two years after resigning and five years after the injury itself. Although the circumstances and ruling of MacIvor are uncommon, employers and insurers should take note that terminating an employment relationship does not necessarily bar an employee from making future LTD claims for injuries that occurred while employed.
  • Alberta permits pension benefits to former common-law spouses – On May 23, 2018, the Alberta Superintendent of Pensions issued Employment Pension Plans Act (EPPA) Update 18-03, which describes a recent Alberta court ruling that allows up to 50 per cent of the pension benefits earned during a relationship to be transferred to a former common-law partner. Previously, Alberta legislation restricted such pension division to formerly married couples. The court decision and Update apply to all non-federally regulated employees regulated by Alberta pension legislation.
  • Tracking the funded status of pension plans as at May 31, 2018 – Morneau Shepell shared the changes in the financial position of a typical defined benefit plan with an average duration since December 31, 2017. The graph in the newsletter shows the impact of three typical portfolios on plan assets and the effect of interest rate changes on solvency liabilities of medium duration.
  • Impact on pension expense under international accounting as at May 31, 2018 – Morneau Shepell showed the expense impact for a typical pension plan that starts the year at an arbitrary value of 100 (expense index). Since the beginning of the year, the slight increase in the discount rate combined with returns slightly below expectations (relative to the discount rate) has resulted in the pension expense returning almost to its level to the beginning of the year.

About Morneau Shepell
Morneau Shepell is the only human resources consulting and technology company that takes an integrated approach to employee assistance, health, benefits and retirement needs. The Company is the leading provider of employee and family assistance programs, the largest administrator of retirement and benefits plans and the largest provider of integrated absence management solutions in Canada. As a leader in strategic HR consulting and innovative pension design, the Company helps clients solve complex workforce problems and provides integrated productivity, health and retirement solutions.  Established in 1966, Morneau Shepell serves approximately 20,000 clients, ranging from small businesses to some of the largest corporations and associations.  With more than 4,000 employees in offices across North AmericaMorneau Shepell provides services to organizations across Canada, in the United States and around the globe. Morneau Shepell is a publicly-traded company on the Toronto Stock Exchange (TSX: MSI). For more information, visit morneaushepell.com.

SOURCE Morneau Shepell Inc.

Thoughts on the Decision to Stop Driving

Senior DriverWe have built our world around the convenience of the motor vehicle. Without one, our focus suddenly becomes much more narrow. Are you prepared to cope with the decision to stop driving when the time comes?

I ask this question after watching a significant change for part of my family. My in-laws decided that the family home of 52 years was too much for them and made the move to a seniors complex. My father-in-law suggested that they had been considering this for about 2 years but once the decision had been made the transition occurred too quickly.

They found a new seniors complex that suited them and had space available. Once their home was listed for sale, it sold almost immediately and the move to the complex was complete 30 days later.

Needless to say, they both found the change very stressful. A lifetime of possessions suddenly had to be divided into 3 categories: keep, redistribute or throw away and dealt with quickly. A new home had to be occupied and adjusted to as well.

My mother-in-law had the most difficulty and made the decision to stop driving on her own initiative. Fortunately, my father-in-law still drives and their facility provides transport to a nearby shopping center once a week.

Following the advice of her children, she chose to retain her driver’s licence rather than surrendering it as she had first intended.

I really hope that this works out well for them once they get over the shock.

Life often does not leave you with choices and planning is much better than procrastination.

A driver examiner told me in conversation once that it was fairly common for older men who failed a retest to hop in the car and drive home after surrendering their licence. Thank goodness they made it there safely as they would not be covered by insurance if they caused a crash on that trip.

Younger people are not exempt either. I stopped a middle aged woman one morning as her driving made her appear to be an alcohol impaired driver. Conversation quickly established that she was sober but suffered from physical health issues.

I convinced her to park the car and let me drive her back home as no one she knew was available to help her. I felt very awkward in the situation and as we pulled into her driveway I complimented her on her home as a way of making conversation. “Yes,” she said, “it’s a pretty nice prison, isn’t it?”

Somewhere between capable and incapable lies an area where the driver still performs adequately in some circumstances. Applying restrictions to their driver’s licence permits some mobility while reducing the chance of causing a crash. Graduated De-Licensing if you will.

This is where ICBC operates in conjunction with health professionals, police, family and friends. However, for it to be successful, ICBC must know of the driver’s difficulties either through reports or periodic medical examinations.

HealthLinkBC provides advice to help make the decision as well.

According to the Office of the Seniors Advocate of BC more work needs to be done in support of seniors mobility. The advocate has recommended a new program called “Community Drives” that would be administered under the existing home support program.

I suspect that no one really wants to grow old and stop driving much less spend the time planning for it. However, a little time spent in advance can make that transition much less stressful.

#RoadSafety: Little Things Can Make Big Differences

ExclamationI’ve been riding as a passenger in heavy traffic this past week and have had time to watch and think about what is going on around me. There are many small things that a driver should do out of habit to minimize their chances of being involved in a collision.

In no particular order of importance, here are my suggestions.

Signal! The bulbs are good for more than 3 or 4 blinks too. Nothing tells others what you would like to do better than a well used signal light lever. There are polite drivers out there who will actually see your signal and help you accomplish what you want to do.

When you stop in traffic, you should see pavement between the front edge of your hood and the bottoms of the back tires of the vehicle in front of you. If you don’t, you are too close.

The extra space may prevent you from being pushed into the vehicle in front of you if your vehicle is hit from behind. It also gives you room to move if an emergency vehicle approaches.

Stop before the sidewalk when you are entering a street, not on top of it. Pedestrians really appreciate your consideration.

Maintain an appropriate following distance for the conditions. When you do this, you control your own safety margin and to some extent that of the driver behind you. They will have more time to realize that something is happening and can then avoid colliding with you.

Leave yourself an out, especially around heavy commercial vehicles. Having a space to move into on your left or right if something happens may mean avoiding a crash.

Use some lane discipline. You are entitled to one lane and have to stay between the lines of that lane.

If you don’t know where you are going, stop and figure it out. Better still, plan before you leave. If you don’t have GPS in your vehicle, cell phone or tablet, the internet is full of useful resources.

Don’t commit random acts of driving by ignoring traffic controls when you decide you’ve chosen incorrectly.

Remember that there are drivers behind you that will become impatient and try to pass by. Pull over, stop, let them by and then continue at reduced speed as you try to locate the address you are trying to find.

Scan around and well ahead of your vehicle. Preparation is preferrable to surprise.

Early detection of obstructions ahead allow you to plan to avoid them rather than react in a place where you may not have a choice.

Anticipate the traffic lights. Braking lightly and coasting to a stop saves wear and tear on your vehicle. Aside from being safer, it also saves you money on maintenance and fuel.

Screaming up to the red light and braking heavily at the last second invites the driver behind you to join you in a collision, especially if they are not paying attention or are momentarily focused elsewhere.

If another driver insists on infringing on your right of way, let them have it. It’s better to maintain as much control of the situation as you are able to rather than insist on being part of the incident.

None of these things are difficult to do and are simple habits to develop. The choice to be safe is always yours.

These are Ontario’s Worst Roads for 2018

These are Ontario’s Worst Roads for 2018

By Kelly Roche  Source: inbrampton
The votes are in, and Ontario’s Worst Road for 2018 isn’t too far from home.

What’s the rush, Saskatchewan? 4,873 drivers caught speeding in April

SGI NEWS RELEASE: 

There were 4,873 tickets for speeding and aggressive driving issued by police during the April Traffic Safety Spotlight on speeding.

Whoa, that’s a lot of speeders. One might say those numbers “quickly” added up.

Lame jokes aside, it’s time to #SlowDown, Saskatchewan. Excessive speed is one of the leading factors in traffic-related deaths and injuries. If you speed, you’re more likely to get into a collision, and the faster your speed, the worse the collision.

Remember: speeding tickets in Saskatchewan got more expensive as of May 1. The base fine on all speeding tickets has increased by $30 and the km/h charge for travelling in excess of the posted speed has doubled.

What do these increased speeding fines look like? Exceeding the speed limit by 20 km/h on a regular street or highway triggers a total fine of $190, including the Victims of Crime surcharge and km/h charges. In a school zone, 20 km/h over the limit costs you $310. If you speed past workers in a 60 km/h orange zone, you’ll shell out $440 for going 80, and $1,008 for going 100!

So leave a little earlier, ease off the accelerator and keep your money in your pocket. (Besides, you’re definitelygoing to be late if you get pulled over, right?).

Police also issued tickets for other traffic infractions* including:

  • 516 distracted driving offences (426 for cellphone use)
  • 269 impaired driving offences (including 265 Criminal Code charges.)
  • 323 offences regarding seatbelts/child car seats

Police continue to focus on impaired driving throughout May. Remember, impaired is impaired. In Saskatchewan, it’s currently illegal and will continue to be illegal to drive under the influence of drugs or alcohol, even once marijuana use becomes legal in Canada later this year.

 

Follow SGI on Facebook, Twitter and Instagram for safety tips to #TakeCareOutThere.

 

* Includes all traffic safety focus results for April 2018 submitted by police as of May 17, 2018.

Road Trip Checklist For This Long Weekend

Road Trip Checklist For This Long Weekend

By Jeff Youngs | JD Powers

Before setting off on a road trip, it is important to make sure that your vehicle is ready for a long journey, especially if your route passes through lightly populated areas off of the Interstate. Checking your vehicle’s basic functions and systems before departure can help to ensure a safe and smooth road trip.

  • Check the brakes. Your vehicle’s brakes are a critical component for any drive, whether heading across town or across the country. Make sure your car’s brakes are in good condition before your trip.
  • Check the tires. In addition to making sure you have a spare tire with you (unless your car has run-flat tires), be sure to inflate all tires, including the spare, to the recommended tire pressure before departure. Also, check for uneven tread wear, which indicates that an alignment or replacement tires might be necessary.
  • Check the lights and signals. Make sure your headlights, tail lights, brake lights and turn signals work properly.
  • Check the wiper blades and washer fluid. A new set of wiper blades is a good investment before any road trip. Also, be sure to top off your washer fluid before hitting the highway.
  • Check the engine coolant. If your engine coolant is old, it’s a good idea to replace it with new coolant. Be sure that your car is ready for extreme heat or extreme cold, depending on where you’re going and the time of year.
  • Check the fans, belts and hoses. Your car’s engine fan, belts and hoses are critical for engine cooling, so be sure they’re in good condition before your trip.
  • Check the battery. It’s easy to have your battery tested to make sure it’s ready for a road trip. If your battery is more than 3 years old, get it checked before departure.
  • Check the fluids. Make sure your car’s fluids are in good condition and are topped off. This includes the oil, transmission fluid, brake fluid, and the power steering fluid.
  • Bring basic tools. Make sure all of your vehicle’s tire-change tools are present and accounted for. Additionally, it’s not a bad idea to bring a basic set of tools that could help fix a minor problem during the trip.
  • Bring emergency provisions. Even if you perform every task on this road trip checklist, you could become stranded with a disabled vehicle. You will want to have emergency provisions aboard just in case this happens. Food and water are critical, but depending on the weather, you will also want appropriate clothing and accessories, like sunscreen and a wide-brimmed hat for hot sunny areas or a blanket for cold regions.
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