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© Copyright 2000 Rogers Media. The following article first appeared in the May 2000 edition of
BENEFITS CANADA magazine.
Insights
Contrarian views, news and international intrigue
By Andrea Davis
Show me the money
Imagine paying employees for going to the gym. Or offering extra vacation days for participating in a
healthy eating program. Such benefits might seem extravagant, but they could save plan sponsors money in
healthcare costs down the road.
"There's a great deal of potential for financial incentive programs. The benefits of a healthy lifestyle
seem to be fairly well-documented but not necessarily well-quantified," says Bruce Jones, associate
professor and actuary in the department of statistical and actuarial sciences at the University of Western
Ontario in London, Ont.
Financial incentives to promote healthy living is the subject of a recent paper by Jones.
He outlines several possible models in his paper, entitled Promotion of Healthy Lifestyles in Retirement
through Financial Incentives. Employers, for example, could offer financial incentives to employees for
increased physical activity through monetary bonuses, additional vacation days or extra credits in a
flexible benefits plan. Life insurance policies could also serve as a vehicle. A financial incentive could
be provided in the form of a dividend payable to those who meet criteria specified in the contract.
"It's not at all clear which approaches are going to lead to the most effective program," says Jones.
While financial incentives may lead to savings on the healthcare side, pensions may also be affected.
"There could be additional costs for pensions because individuals are living longer because of healthier
lifestyles," says Jones.
There's still much work to be done in the area, says Jones, noting that there could be significant new
business opportunities for financial institutions that are willing and able to market financial incentive
programs.
Calling Mr. Mom
Soon-to-be implemented changes to Canada's employment insurance laws could result in more men trading in
their day jobs for diaper duty. As of Dec. 31, 2000, parental leave--available to either mother or
father--will be extended to 35 weeks from 10 weeks, and the number of hours of work required to qualify for
this benefit will be lowered.
"I think we will see families split the longer leave between the mom and dad," says Jane Boyd, president of
Work, Family & Life Consulting in Langley, B.C.
New fathers were first granted a paid 10-week leave in October 1990. Since 1991, fathers as a percentage of
all parents taking leave has hovered around 3% to 4%, according to a 1998 Statistics Canada report,
entitled Stay-at-home dads. The concept of Mr. Mom is gaining ground, though. Last August, this rate
jumped to 6%.
The biggest obstacle for men to overcome is perception in the workplace. "This could be a barrier for men
working in organizations that do not have a culture that is supportive for such leaves," concedes Boyd. She
does believe, however, that the tide is turning.
Boyd points out that one hallmark of a family-friendly workplace is men taking parental leave. "It's just a
matter of time before [more of] this occurs. As society changes its perception of men taking parental
leave, so will employers."--Kathryn Dorrell
Brave new economy
Keep the recent downturn in technology stocks in perspective. A comparison of the top 10 companies by
market capitalization reveals how far technology stocks
have come.
Stressed out
Perhaps it's pure coincidence, or perhaps it's some kind of sign. The day after North American stock
markets--Nasdaq, the Dow Jones and the Toronto Stock Exchange--lost ground on April 4, sending some
investors into panic mode, the Ontario Psychological Association (OPA) launched a pilot project to help
employees in downtown Toronto deal with stress.
Employees in Toronto can call a hotline between now and June 30 to schedule a free, one-hour session with a
psychologist, who will help them identify stress, present them with options to deal with the stress and
outline steps they can take to overcome future stress.
"In this period of tremendous prosperity, people are becoming a little more bold, particularly around the
expansion of discount trading," says Sharyn Salsberg Ezrin, an industrial psychologist who works with
corporate executives in Toronto. "It's adding a tremendous amount of stress to their mental well-being."
Diseases such as depression, which can be triggered by excessive stress, are one of the leading causes of
employee absenteeism, according to the OPA.
Head games
The benefits of massage are all in your head, says a new study published in the British Journal of
Sports Medicine. A team of researchers from University College Northampton measured the blood glucose,
lactate and heart rates of amateur boxers before and after two separate fights. Following the first bout,
half the boxers received a 20-minute massage from a qualified sports therapist, while the others rested on
mats. The researchers found no significant differences in the measures taken in each group. Performance did
not improve in those who had massages.
But before you start yanking massage off your plan's list of covered health benefits, consider this: the
British study also concluded that post-performance massage has definite psychological benefits. The boxers
who were massaged said they felt less sore and tired than the group that had not been massaged.
IN FACT
With tax season at an end, here's a compendium of Canadian tax facts.
The Canadian Taxpayer's Federation bestows annual awards to the public office holder, civil servant or
department that most exemplifies government waste, overspending, over-taxation, excessive regulation, lack
of accountability
or any combination of the above. This year's winner in the federal category:
Human Resources and Development Canada for the job grants scandal.
Source: www.taxpayer.com
Tax Freedom Day--the day when Canadians start working for themselves instead of the tax man--fell on July 1
last year. In 1961, the earliest year for which the calculation was made, Tax Freedom Day fell on May 3.
Source: www.fraserinstitute.ca
Foreign investments were popular with investors during this year's registered retirement savings plan
season. In a ranking of investment products, 94% of financial advisers said international equity funds were
bestsellers. Advisers also reported that minimizing taxes was the No. 1 concern for their clients.
Source: Trimark Investment Management Inc.
Riding the wave
ension fund managers may be cooling to Nortel and BCE, according to a recent survey of investment managers
conducted by consulting firm Towers Perrin. The company polled 50 pension investment managers in Canada to
get a sense of how they feel about soaring levels of exposure to the two stocks.
More than 50% of the managers' segregated clients have guidelines that restrict exposure to a single issue
to 10% of the market. More than 30% of the managers' clients are allowing them to overweight BCE and
Nortel. Almost 60% of the managers surveyed offer or plan to offer a pooled Canadian equity fund with
capped exposures.
"I would have expected more of them to say 'if Nortel's going that high then we're going right along with
it' but it seems pension managers at least, are experiencing an untypical bout of prudence and that should
be a warning, I think, to everybody in the industry," says Kevin Martino, a consultant with the asset
management group at Towers Perrin.
Regulatory runaround
n Ontario, New Brunswick and Newfoundland, pension plan sponsors must explain any plan amendments to
members within 60 days of registering the amendment with the provincial regulator. In B.C., Alberta and
Saskatchewan, it's 90 days. In Manitoba, it's 180 days after the effective date of the amendment or within
90 days of registration. In Quebec, an explanation is required within 90 days only if the plan member is
affected; otherwise, plan sponsors can explain the amendment in the next annual statement. The federal
Pension Benefits Standards Act (PBSA), meanwhile, requires that an explanation of a plan amendment be given
to the member and the member's spouse within six months after the amendment's been made.
Confused? You're not the only one. The above scenario is just one example of how convoluted pension
legislation in this country has become. A document prepared last fall by the Pension Review Committee--a
group of representatives from pension and benefits consulting, law and accounting firms--compares
provincial pension benefits legislation with the federal PBSA. The 70-page document is organized by topics
such as registration, administration, disclosure, new plans, marriage breakdown, vesting and wind-up.
The mish-mash of regulations is enough to make a grown plan sponsor cry--particularly multi-jurisdictional
plan sponsors who have several provincial regulators to deal with. Moreover, says Lyle Teichman, a
consultant and lawyer with Towers Perrin in Toronto, over-regulation interferes with the delivery of
benefits. Employers allocate a certain percentage of their payroll for pension benefits and if some of that
money has to go to unecessary administration, there's less money available to be delivered in the form of
benefits.
"The purpose of the document was to show how absurd the regulators have made the industry. It's the plan
sponsors who are carrying the weight of the absurdity on their shoulders," says Teichman. "It's
counter-productive and it's damaging to the long-term health of pension plans."
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