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Commentary Read an article you like/don’t like? Feel strongly about one of the hot topics we’re covering? Want to share your opinion?
Re: Paramedical care coverage: trends & challenges This approach sounds “penny-wise & pound foolish”. In my opinion, paramedical practitioners, including naturopaths and massage therapists, are an integral part of supporting and encouraging employees to manage their stress and to create behaviors that support great health.
Heather McNab
Re: Canada’s absentee workforce My thought is that the biggest problem with having a high ratio of people on STD or sick leave is that there is no incentive NOT to use up the sick days as they are earned. The solution is to place a value on retaining sick days earned ie 35% payout of value or credited leave for early retirement. The con of doing this is that we may have people coming to work when they should stay home sick, but perhaps not any worse than the existing presenteeism of dedicated employees. Ron T. Clerk BBA CHSC CRSP
Re: Pension chiefs call for political action on retirement reform I find it interesting that with one notable exception all of the signatories represent large publicly funded pension plans who live in a fantasy world not populated by the concerns of private sector employers and their plan members but who I assume wish to offer their expertise in some altruistic fashion to this group. I think if we want to talk real reform their Task force mandate should explore the costs of publicly funded DB plans, their sustainability, and at what point the taxpayer will rebel against paying for these "Cadillac" promises and curtail ancillary benefits and explore implementation of "Target Benefit" mandates.
Neil T. Craig
Re: Ontario targets pharmacists for drug savings I’m extremely pleased with the position the Ontario government has taken on drug pricing – it was long overdue. I have to take exception with Thomas Holloway’s remarks: “For example, on a $100 prescription, the drug card company may tell the pharmacist that they’re only willing to pay $90,” explains Holloway. “With these new rules, the pharmacy may ask the patient for the outstanding amount, which today they generally don’t do.” Actually, pharmacies have and do routinely ask our members to pay the difference between what they are charging and what the drug card company is willing to pay. Our plan uses a dispensing fee deductible and I’ve had complaints from employees who’ve been required to pay more than the dispensing fee at the pharmacy. This led me to investigate why it was happening and that’s where Mr. Holloway’s logic falls apart. If the drug card company is only willing to reimburse for $90 of the claim, it is because the pharmacy is charging more than what the insurance industry knows is the “usual and customary” cost for that drug. In his scenario, the pharmacy is endeavouring to make an extra $10 on the prescription. The fact that some pharmacies might waive collection of extra profit from some insured customers, doesn’t justify that they are routinely collecting that additional mark up from private citizens who have no drug benefit coverage. Not to denigrate the expertise of individual pharmacists or their willingness to be helpful, but their employer dictates the level of service provided. For the most part “patient service” is automated by computerized cross-reference of the patient’s medications on file and drug information printouts that get handed over with the prescription. Diabetes, pain management and blood-pressure seminars are not happening at independent or discount chain pharmacies, even though they are collecting the professional allowance for those services. I’m sure that the $2-$3 more for dispensing fee that Shopper’s charges compared to the discount stores, easily covers the actual services they provide.
Jeannie McQuaid,
Re: Ontario pharmacists soften their tone This is just one more of those ill-advised, ill-conceived governmental bureaucratic changes. Pharmacies are businesses and they will react as such. As the adage says, in this world "nothing is gained nothing is lost". Whatever income they lose, they will make up otherwise. Pharmacies will ultimately increase their margins on non generic drugs and/or their dispensing fees or charge higher prices for different categories of insured or non insured patients. They may reduce their staff so that customer will wait longer to be served or get less professional counselling. Or they may look for cheap foreign suppliers and destroy the local drug manufacturing industry. The fact of the matter is that the actual cost of generic ingredients is but a very smal fraction of drug costs. Although 20% of nothing is better than nothing, it is not worth all the fuss that is made around it: it makes nice headlines but is largely inefficient mainly when you consider the very high level of generic substitution already taking place. There is just so much you can squeeze out of this. Real savings will come from better utilization controls, which requires better drug utilization review and the systems that come with it: you will not get this by cutting in the pharmacies income or killing the local drug manufacturing industry.
Marcel Poitras
Re: Ontario targets pharmacists Documents have been presented to the Ontario government showing the cost of dispensing a prescription (not including any profits) is $13.74. The government presented their own figures and said "No, it costs only $12.49". My question why is the government paying $7.00 for the past 20 years & with their new Reform increasing it to $8.00 only. The government knows that the Professional Allowances are the main source for SMALL INDEPENDENT PHARMACIES to remain viable due to the Funding Gap created by the Ontario government over 20 years. Allowances filled that gap with a big portion going to patient care and the rest covers wages and rental to keep the pharmacy doors open. It is unfair to take it out without being able to fill that gap. Independent Hardworking Pharmacists are the ones who are going to be severely affected. Generic Manufactures are not Affected at all and obviously the Ontario Government Is getting a POLITICAL WIN. In brief only The Pharmacists and The Patients are going to pay the price for this POLITICAL DRUG REFORM. Emad Nossier
Re: Ontario targets pharmacists
The Crime:
The Threat:
My Reaction: Besides, I suspect Wal-Mart will embrace this opportunity to comply and absorb the patients ignored by Shoppers. To Ontario Health Minister Deb Matthews I say full speed ahead. My only regret is that this proposal is introduced by the McGinty government, which will no longer be calling the shots after the next election.
Regards,
Re: Ontario targets pharmacists As a resident of Ontario with no prescription coverage I welcome these changes. My husband takes a maintenance medication each day and even at the current price for the generic option it gets expensive. I support giving a break to those of us who have no Rx coverage. Kindest Regards, Rayanne Stemmler
Gary Nachshen’s comparison of the Manitoba Court of Queen’s Bench analysis to Humpty Dumpty is spot on. However, I suspect that there was some method to the court’s apparent madness. Based solely on the evidence referred to in the decision, it appears that the privatization of the MTS pensions generated some serious breaches of due process as well as possibly legitimate concerns by members over both surplus and governance. I rather suspect that the court was sympathetic to those issues. Presumably lacking any obvious legal basis on which to find in favour of the members, I’m guessing the court saw an opportunity to enrage Gary Nachshen and redefine (at least temporarily) the definition of the word “benefit”. In my opinion, if there really were serious breaches of procedure, governance and surplus use, those issues should be dealt with directly and not by seemingly ingenious and novel twisting of definitions. While it may offend some people’s sensibilities, justice cannot always be delivered.
Regards,
Has Mr. Nachshen, like Rip Van Winkle, been asleep for [the] past decade? Members of the Air Canada Pension Plan have learned that privatization of a Crown Corporation brings with it an important additional element of risk to the pension plan and its beneficiaries - the risk of the failure of the plan sponsor. In such a transition, the simple replication of the existing plan rules, funded status and accrued benefits as of a fixed date, we have learned, does not near adequately compensate for the loss of the government covenant inherent in such a privatization transaction. Surely the benefit certainty conveyed by the government covenant as sponsor of the Plan was a "benefit" of the prior plan in a very fundamental sense. Is this perhaps what the Court was trying to redress in their ruling? I would wager that pension plan members will have much more to say on this subject in any future public sector privatizations.
Henry Gibbs
Re: Do Canadians really need to save more? I am truly surprised at the ease in which I can poke holes in this article. I find it incredibly cheeky for an actuary to knock off the savings years from age 20-30 when they are fully aware that these are the most powerful years for compounded interest. He is incredibly brazen to attach his name to such a calculation. As is his use of a retirement age of 63 when the min default is always 65 and with the recent trends of higher retirement ages of 67-71. Secondly he is focused on the high-income earner. His example is someone who is making 95,000 a year? High and low income Canadians are not the target area of concern for retirement in Canada, it is the middle class. In 2010 the year's maximum pensionable earnings is $47,200. Why not use the number for 2010 of $47,200 per year instead of 95,000? This is a disappointing article to read from any actuary, never mind a Chief Actuary. It reflects very poorly on Morneau Sobeco. Anyone who argues that Canadians should not save money for retirement is in effect arguing for less generational wealth transfer to their children and the erosion of the middle class. The hope is that there are men and women smart enough in left brain analysis who will stand up and refute this nonsense instead of sitting in their cubicles and offices and saying, “oh well, that is the way the world is. Got to go along to get along. Nothing I can do.” The fact is Actuaries are the strongest voices in the entire pension reform conversation. Other Actuaries are the only ones who can stand up and publicly refute articles like this. I wonder if any of them will speak for the middle class.
Sincerely,
Re: Do Canadians really need to save more? I sold life insurance for 30 years and the 70% was used during that time. I never bought it and wasn't a very successful agent. I told everyone to get a home and pay off the mortgage by the age of 40. Then pay yourself 10 to 20% of your income first in savings/investments and you should be okay. Current house prices make that impossible for most low and middle income people. Our own experience in retirement is that you need 50% of pre retirement income to live on comfortably and even that will allow you to save after retirement. If you want a summer vacation and a winter trip to the south every year, don't ask me to pick up the cost of living after you finish earning.
David Vallance
Re: New voluntary pension plan most feasible: minister The options for pension reform being considered nationally and by the B.C. finance minister are broader and more multifaceted than noted in your recent story. The truth is that public pensions were never intended to provide the sole source of retirement income. Retirement savings vehicles available to Canadians include government plans (i.e. OAS and CPP), group/employer pension and retirement savings plans, and individual savings and investments. Improving Canadians' access to secure and efficient retirement incomes should build on the strengths already found in the private sector, rather than focus solely on expanding public options. This has to include making regulatory changes so that company pension plans become less complex and costly to operate. In this way, more companies, employees and the self-employed can participate. This will help ensure we maximize private saving efforts in concert with the government pension plans.
Frank Swedlove
Re: New voluntary pension plan most feasible: minister Well I wonder if the minister has been smoking any of the local home grown. Voluntary plans simply will not work, the RRSP stats prove it. Neil Craig
Re: Unions warn Conservatives over pensions Unless we change the public sector pension benefits the growing situation will continue, that is, private sector workers who continue to work past normal retirement date paying taxes to pay public sector pensioners who took early retirement. The anger will be palpable. I talked to one federal public sector employee who said that all public sector unions would threaten to unseat any elected official who supports changes to the public sector pension package - call it blackmail? Brian Jackson
Re: Government called out on slow pace of pension reform Glad to see that the seniors of the nation under the CARP banner are so willing to spend my money and perhaps my employers to increase contributions and benefits in CPP. Younger Canadians are already paying an excessive amount relative to benefit for CPP in order to provide the benefits grandfathered in to the existing recipients that had no or insufficient funding to prop them up. Placing the burden on the next generations is not the solution. Attractive private sector programs with inducements for the employers to participate are the way to go. Our system is not as broken as they would have you believe and Canada ranks very highly relative to other countries when it comes to evaluating the overall retirement system.
Neil T. Craig BA, RPA
Re: Literacy: the skeleton in the closet Thank you, thank you, thank you for putting this issue out in front. I've actually had this discussion with our own benefits provider a few years ago when they introduced new, improved "Welcome" packages for our Group Retirement Savings Plan. This package was supposed to explain our program and help the new member with their retirement planning. It weighed about two lbs. and was comprised of several separate multi-page brochures, booklets and forms in a vinyl pouch. Very pretty: all glossy colourful paper and pictures of bright, beautiful, happy 50ish looking couples already enjoying retirement and perfect families playing at the beach and yuppie singles lounging in there upscale living quarters, smiling at their laptop computers. YIKES, what those pictures say to our production and warehouse workers is "forget it, you'll never have that kind of lifestyle and you can't afford to save for retirement". So the poor guys are turned off even before they start to wade through the industry jargon. Even our managers and supervisors found the materials totally daunting. My request and recommendation to our benefits provider: fire the advertising types that put that stuff together and consider who their real target audience is. If they want ordinary people taking advantage of their retirement savings vehicles, they need to connect with those people realistically. I suggested they look for some photos of real people (not models) doing real jobs, not lounging about in designer jeans or dressed like bank executives. Use simplified language and where industry terms must be used, provide an explanation of what they mean. To no avail, I have yet to see any financial services company's literature meet this standard of communication for rank and file employees. But then, the same holds true in government literature, health and safety regulations and all manner of employment related services. All seemed to be premised on the misguided notion that all working Canadians can read and comprehend the mountains of printed information they generate. But wait, now we expect those same people to Google it up, log in and download it from the internet.
Jeannie McQuaid, CHRP
Re: Why have ASO plans become commodities? Re: Mike Sullivan is right that plan sponsors are missing the boat if they are focusing on the 5% administration fees. Of the remainder 95% claims costs, the only thing that should be commoditized that isn't, is the everyday generic drugs covered by all plans. Canadians pay vastly more for these drugs than Americans, and for no good reason, except that's the way its always been. Private payers are now realizing that these prices are too high, and they are empowering themselves to deal with their insurers and pharmacy providers to get a better deal.
Re: Pension reform options plentiful I fully agree that Canada and Canadians need to better prepare themselves for retirement. However, before we start thinking of the CPP as an alternative, we need to acknowledge that the CPP is not compliant with the federal government’s own Pension Benefits Standard Act ,in at least two instances/provisions/benefits.
Re: Knives out for CPPIB bonuses If we are going to be like Wall Street and reward poor and damaging performance then we as the payees into Canada's Pension Plan should have the payment come out of manager's own salaries, and not ours. This is ridiculous. They should be giving the bonus up and putting into the pension fund that so many of my generation will never receive. I personally would rather have a separate private account in which my CPP and UI benefits go into monthly and then I earn interest similar to a TSFA. At least this way I know I have the monies down the road when I retire. Maybe we should all start something like this instead of being robbed by overpaid bureaucrats. Helen Dzambazov Sentry Select
Re: Mental health in the workplace: how to accommodate What a great article! It touched on a lot of things that affect workers and the workplace. I have been treated for depression/dysthymia for many years. For the most part, things go very well. However, I burned a lot of bridges before I learned that what I had was an illness. In any case, the workplace today is very different from what it was 20 years ago. Now it's okay to excuse yourself from a meeting because the dots are just not connecting at that moment. In the past, you had to stay put, and it usually caused increased anxiety, which sometimes led to anger or hostility. I don't mind telling people that I am being treated for depression; it's as much a part of me as diabetes is for someone else. I also keep an eye out for people who exhibit some of the behaviours I used to. As often as not, my suggestion that they see a professional is adopted, and there is appreciation all around. I have a sister who suffers from depression as well. She also has chronic pain and fibromyalgia. In her case, the employer was not able or willing to accommodate her frequent absences; she ended up on long-term disability. That was close to 10 years ago. Her physical idleness has not helped her condition, nor has her isolation from work, responsibility and social contact. I have often wondered if there could have been a way to accommodate her so that she could have regained her former resilience. Thanks again for the article. - Stephanie Michaels, Alberta Pensions Administration
I wanted to thank your magazine for the comments made in the March 2009 Straight talk and Whose job is it anyway? articles. My opinion is that too many companies rely on the all-in-one package of services they receive from their providers. Yet, according to your survey (of CAP members) 71% say they would use a company-provided qualified individual if offered at no charge. There will continue to be confusion for the masses as to what "investment advisor" and "investment advice" mean. Is the financial information being provided in the best interests of the employee or in order to get more money into the newest mutual fund? I think many people over the last year who have relied on their advisors (many commission-paid) now realize they didn't come first. Too many conflicts of interest still exist. Our approach is that the investment process is the most important part, not the investment product. What many people are missing is a basic financial plan, as this will tell them what rate of return they need to live their lives. From this, a proper portfolio is structured. If you need only a rate of return of 5% to maintain your lifestyle, then you would have very little need for some of the aggressive products that continue to be sold in portfolios. We see this all the time, but they are the products that pay the most money to the advisor and their firms. Appreciating the need for budget cutbacks in the global slowdown, it would be a mistake for firms to take a step back and do nothing regarding independent financial education. It is needed more now than ever. - Greg York, director, corporate services, Second Opinion Investor Services Inc.
Re: Target benefit plans: the overlooked gem in the OECP report It is interesting how enamoured various stakeholders and commissions have become with target benefit plans and multi-employer pension plans (MEPPs) in general. To any employer that is seriously considering joining one of these plans, you should be very careful that you fully understand what you are signing on for. In the past, these plans have been sold to employers as plans that limit employer liability to only the amounts contributed, with no overall responsibility for the sufficiency of the funds to pay the future promised benefits. In Ontario, these plans are heavily promoted as defined benefit plans with very fine print alluding to the risk of benefit reduction should there be a funding shortfall. There have been a number of cases in which benefits have been reduced, and plan members and retirees were surprised that this could happen. This plan feature is rarely highlighted at the shop-floor level. If a plan does become underfunded, it has the potential to create a two-class system of plan members, with existing or new members having future benefits reduced while retirees are fully subsidized. Pension plan coverage of any kind is preferable to no coverage, but there are cost-effective alternatives for employers to assist employees with saving for retirement without having to expose the employer to risk levels above and beyond the fixed compensation dollars allocated to pension expense. - Neil Craig, senior pension consultant with Stevenson & Hunt Insurance Brokers Ltd.
Re: What's so super about a superfund? Spoken like a true consultant, investment advisor, investment manager, custodian and/or actuary, all of whom will suffer revenue loss if this idea takes off! I am confident that some of the biggest funds in Canada like CPPIB, Ontario Teachers and OMERS would be able to figure out many of the issues raised in this article. In addition, there are many multi employer plans that seems to manage pretty well on the governance matters identified. Non-public sector single pension plan sponsors (SEPPs) in Canada face fragmentation, non-uniform legislation, and a multi-stove piped service industry which has not served pension plans as well as this article would like to suggest. We still have over 40% of Canadians not even covered by employer-sponsored registered plans, largely because of the costly and complex "price of entry". Evidence shows that when it comes to pension fund performance, size does make a difference. The chance for small to medium size employers to take advantage of the buying power of larger funds, without having the internal resource commitment, legal and governance risks, is pretty compelling to me. - Gretchen Van Riesen, GVR Consulting
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