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© Copyright 2000 Rogers Media. The following article first appeared in the August 2000 edition of
BENEFITS CANADA magazine.
Insights
By Andrea Davis
High-tech
When it comes to personal investments, we're typically Canadian--reserved and content--according to a new
survey on the financial attitudes of Canadians.
The annual study, conducted by Investors Group and Gallup Canada, reports that 70% of this year's
respondents are satisfied with their one-year investment performance compared to only 14% that are
dissatisified. Interestingly, the survey was conducted between April 10 and 19, 2000, a particularly
volatile time for Canadian financial markets.
Overall, 43% of Canadian investors expect returns of less than 10% over the long-term. Almost one-third set
their expectations between 10% and 15% and approximately one-fifth are looking for loftier investment
returns of 15% or more.
"Canadian adults continue to describe their investment style as somewhat or very conservative. Meanwhile
the number that indicate they are aggressive investors has grown by 7% (from 16% to 23%)," says Sandra
Metraux, senior vice-president, marketing, with Investors Group in Toronto.
"Despite some heady movement [in market volatility] Canadians have not been deterred [from investing in
high- tech]," she adds. "In fact, two out of five Canadian investors are choosing to ride the technology
wave."
According to the survey, 39% of Canadians own technology investments such as high-tech, biotechnology or
Internet stocks or mutual funds. Not surprisingly, 45% of technology-focused investors describe their style
as aggressive--double the rate for other mutual fund and stock owners. As well, 23% of technology investors
expect long-term returns of 15% or more.
High-tech investors also appear to be a wealthier bunch. Investors with portfolios worth more than $100,000
represent almost 40% of technology-focused investors. --Kathryn Dorrell
Pension plan touchdown
If you think motivating defined contribution (DC) pension plan members who have traditional desk jobs is
challenging, imagine motivating football players to learn about investing. It's a significant challenge for
Fred James, a former player in the Canadian Football League (CFL) and chairman of the CFL Players' Pension
Plan. He is currently an estate planning specialist with Merrill Lynch in Calgary, Alta.
"Dealing in that environment is very challenging because they [the players] make pretty good money and
they're treated in a different manner that is not necessarily the real world," says James, noting that the
average career of a running back in the CFL is about three years. Linemen have slightly longer careers,
averaging about five years.
The CFL plan, which has been around since 1967, recently moved from a DC plan with only one investment
choice to a plan with six investment options. James will spend part of this year's football season touring
with the eight teams, educating players about their new options. He says the most common question he gets
from players is 'when can I get my money?'
The plan currently has 400 active members and 2,800 inactive members. Maintaining a database of current
addresses presents another challenge. "Of the 2,800 inactive members, we probably have about 1,000 that we
can't locate," he says.
Max tax
The average Canadian family will pay $31,404 in taxes this year. Social security, pension, medical and
hospital taxes account for nearly 20% of the bill at $6,068.
SOURCE: The Fraser Institute
Common ground
Good working relationships and high morale are the top two indicators of a healthy workplace, says a new
study comparing the views of business and labour leaders. But that's as far as the agreement goes,
according to the Canadian Labour and Business Centre's bi-annual leadership survey.
Half of business leaders surveyed say that working relationships--ranked by both sides as the most
important indicator of a healthy work environment--have improved over the past two years, while 61% of
labour leaders feel working relationships have deteriorated. Fifty-four per cent of managers surveyed
believe that stress levels have worsened in the past two years while 84% of labour leaders believe the
same.
Other factors cited by management as indicators of a healthy workplace include attraction and retention
(60%), low absenteeism (59%) and high motivation levels (56%). For labour leaders, meanwhile, relevant
indicators include work-life balance (52%), a safe and secure workplace (51%) and manageable stress (46%).
But the differences between managment and labour may not be as great as the results suggest, says the
study. Unions and management "usually focus on different specific measures as symptoms, but often share
common concerns at the workplace."
IN FACT
Canadians made 288 million visits to their physicians last year, up from 265 million in 1998. Other points
of interest:
Canadians aged 40-59 account for the bulk (52%) of the increase.
The number one reason Canadians see their doctor:
High blood pressure.
High blood pressure was the leading diagnosis in 1999, accounting for 16 million patient visits. Diabetes
was the second leading diagnosis, accounting for 7.5 million visits, followed by depression at 7.1 million.
Sales of generic and patented drugs in Canada totalled $8.3 billion in 1999, up 11% over 1998. The number
of prescriptions dispensed in 1999 was 270 million.
Total generic drug sales reached $1.2 billion in 1999. Generics accounted for 41% of all prescriptions
dispensed.
Despite all the ink garnered by Viagra and Celebrex, the most dispensed medication in 1999 was Synthroid, a
drug used in the treatment of hypothyroidism.
SOURCE: IMS Health
Love-in
Treat your employees the way you would treat your spouse or a close friend and you may have a leg up on the
competition.
Michael O'Malley, the author of Creating Commitment: How to Attract and Retain Talented Employees by
Building Relationships That Last (John Wiley & Sons, Inc.), argues that employees look for the same
elements in their employer relationships--respect, commitment and dependability--that they look for in
their personal relationships.
O'Malley, who is a prinicpal with consulting firm William M. Mercer, uses case studies of companies that
have been successful in creating employee commitment. While the examples are U.S.-based, they do have
application in a Canadian context.
Creating commitment through benefits depends on a number of factors such as the nature of the benefit, the
importance of the benefit, immediacy and magnitude. For example, a married employee who can get drug
coverage through a spouse may not place as high a premium on health insurance as a single employee who has
no other coverage options. Similarly, an older employee may place greater value on retirement benefits.
"Various types of benefit plans mean a great deal to employees," he writes.
Learning curve
Pension plan members in Ontario have a new resource to turn to for information on their plans, thanks to a
publication from the Financial Services Commission of Ontario. Entitled Your Pension Rights, the
guide covers such topics as the various types of registered pension plans, vesting and locking-in of
pension benefits, leaving a job and transfer rights as well as wind-up of a pension plan. It also includes
a glossary of pension terms. For ordering information, call (800) 668-0128.
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