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© Copyright 2000 Rogers Media. The following article first appeared in the October 2000 edition of
BENEFITS CANADA magazine.
Insights
By Andrea Davis
Tasty treats
Want to tell your employees they're valued? Let them eat chocolate. That's one of the mottoes of AIT
Corporation, an Ottawa-based company that gives its employees a chocolate with an inspirational message
each week.
The perk was initiated by the company's administrative assistant Roseann Vaughan, who picked up the idea at
a conference on nurturing employees in the workplace. "People spend a lot of time at work. This makes them
feel appreciated," she says, pointing out there aren't many employees who don't like chocolate.
AIT employs 90 people and the treats are hand-delivered every Tuesday morning. Vaughan maintains that large
organizations can also implement this cost-effective strategy that says "you care." Big firms can target a
particular department each week or offer the perk on special occasions, she suggests.
Another small high-tech plan sponsor, PixStream Incorporated of Waterloo, Ont., sends flowers and dinner
certificates home to employees' partners when workers are putting in long hours or are away on business for
several weeks at a time.
The company's human resources administrator, Jennifer Patterson, says the gesture acknowledges that family
support of its employees plays a role in helping the company thrive, and that it has an obligation to the
partners of its workers when work life intrudes on family time.
"When we are closing a big project, employees can work 60 hours a week," says Patterson. "Sales staff can
travel for two, three and four weeks at once." She says the flowers and dinners are a "token of the
company's appreciation."
Patterson adds that PixStream values well-rounded employees and thinks they are more productive. It
recognizes that personal time, which is sometimes sacrificed for work, plays a crucial role in this.
--Kathryn Dorrell
Anticipating retirement
If your employees expect to be bored and lonely once they retire, chances are they will be. New research
reveals that managing people's expectations for retirement may contribute to a better quality of life in
later retirement.
The study, published in the Canadian Journal of Behavioural Science, shows that how retirees
perceive retirement heading into it is the most important factor for their adjustment. For plan sponsors,
this means that a little extra education to help plan members have realistic expectations could be
beneficial.
"There should be an emphasis on helping employees heading into retirement assess what their expectations
are for social activities, leisure activities and income level," says Terry Gall, an assistant professor in
the faculty of human sciences at Saint Paul University in Ottawa and lead author of the study. Gall and
David Evans, a professor of clinical psychology at the University of Western Ontario, interviewed 109 men
two to four months pre-retirement, one year post-retirement and then six to seven years post-retirement.
"The expectations retirees had before they retired were quite important for their later quality of life,"
says Gall. "If they expected to have relatively good health and to have satisfaction in activities then
they tended to have a better quality of life in the long term than if they didn't expect those things."
Payroll taxes
Employment insurance makes up the biggest chunk of payroll taxes. In 1997, total premiums collected from
employers and employees reached $19.7 billion.
Health/education/ training
14%
Employment insurance
41%
Workers' compensation
13%
Canada and Quebec Pension Plans
32%
SOURCE: Statistics Canada
Techie listings
Institutional investors who shy away from technology stocks because of fluctuating valuations may take some
comfort in the fact that tech companies now have more stringent standards to follow if they want to be
listed on the Toronto Stock Exchange (TSE). The TSE recently adopted new listing requirements for
technology companies, which focus on the level of investor support, adequacy of funds, management and stage
of commercialization of products or services. Specifics include a $50 million minimum market value of
listed shares, a $10 million minimum market value of the public float and evidence that a company's
products or services are at an advanced stage of development.
Insider trading
The Ontario Securities Commission (OSC) is flexing its regulatory muscles on selective disclosure. The
regulatory body recently released the results of a survey on corporate disclosure conducted by its new
continuous disclosure team.
Selective disclosure (which is a breach of the Securities Act) occurs when corporate officers disclose
material information about their company to select groups or individuals, such as analysts or institutional
investors, that has not been disclosed to the public.
"We have become increasingly concerned about selective disclosure and the potential impact of this practice
on market integrity," says John Hughes, manager of the OSC's continuous disclosure team. "It creates
opportunities for insider trading and undermines retail investors' confidence in the market by creating a
perception that analysts and institutional investors have access to information that is not available to
other investors."
In the OSC's survey of 170 companies, less than one-third (29%) have written corporate disclosure policies,
while only 19% of respondents invite retail investors to the quarterly conference call. More than 80% of
respondents hold one-on-one meetings with analysts. Only 18% of respondents broadcast their quarterly
conference call via Internet or by other means.
In the past, most of the OSC's efforts with regards to corporate disclosure have focused on initial public
offerings, says Hughes.
After the IPO had been filed, he says, the OSC was less likely to take a look at a company's disclosure
practices.
"[But] most trading is not done through IPOs," says Hughes. "The secondary market is by far the main thing
and that's where the bulk of our efforts should be over time."
The OSC will use the survey results to publish a policy statement later this fall, which will offer
practical steps companies can take to ensure they meet the letter and spirit of Ontario's regulatory
requirements. Moreover, it "will give some indication as to when we would think the Act had been breached
and when we'd be likely to consider taking an action under the Act," says Hughes.
Debunking age-old myth
Despite the popular image of pimply faced teens ruling the new economy, Canadian high-tech firms are led by
industry veterans. According to a study of the 50 fastest-growing technology companies conducted by
consulting firm Deloitte & Touche, more than half (52%) of the CEOs surveyed are between 40 and 49
years old. Another 22% are 50 to 59 years old.
The study also debunks the belief that retention is one of the biggest challenges faced by tech companies.
Although 38% say that finding and hiring qualified employees is the most significant challenge, only 3%
believe that retaining skilled workers is the greatest obstacle to overcome.
Q & A
Meredith Brooks is managing director, institutional investment services with Frank Russell Company,
responsible for investment services for institutional clients in the U.S. and internationally. She spoke to
benefits canada recently about the challenges facing the money management industry.
Are plan sponsors too focused on short-term performance?
I'm not seeing that plan sponsors are overly focused on short-term performance. They certainly won't react
on the basis of short-term performance. When it comes to a fiduciary making decisions with someone else's
money, I think we've trained plan trustees well. It's taken us years to map out this industry and
understand risk, to be more long-term focused. Now we're going into an individual-driven environment with
defined contribution (DC) investors and we're going to have to try and teach those same things. It takes a
long time.
Are DC plan members prepared for a market downturn?
A market downturn would be a graphic illustration of the challenges we face in education and helping
employees make decisions. It's a very hard lesson to explain. How long did it take the industry to get
trustees to come towards the idea that managers can't time the market? Years. They all had to try it and
they all had to try it with multiple managers and every variation before they finally realized you cannot
time the market. DC investors will have to go through the same process.
How vigilant should plan sponsors be in monitoring their money managers for style drift?
You can't get too rigid about style. Managers need to able to move with what's actually happening in the
economy, not just with what's happening in the markets. Style purity limits your ability to find good
managers because talent often doesn't come in a neat little box. Talent's almost a dirty word. It's wishful
thinking that we're all equal and that if you give someone the data we could all do it. It's not true.
Markets are dynamic. People are dynamic. You want a framework, you want a level of rules, but you don't
want to box yourself in so you don't pick up new opportunities.
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