© Copyright 2000 Rogers Media. The following article first appeared in the February 2001 edition of BENEFITS CANADA magazine.

Insights

Contrarian views, news and international intrigue

By Andrea Davis

The Canada Pension Plan (CPP) has taken a page from the books of plan sponsors by introducing annual pension statements. Since last August, the federal government has mailed statements of contribution to approximately 9.7 million Canadians.

"I think there was a sense during the consultations that were held across the country on the CPP in 1997 that people didn't understand the CPP as well as they might. And because of a lack of understanding, [Canadians] had a bit of a lack of confidence in the CPP and what they would get in the future," says Cathy Drummond, director general, program policy and planning, income security programs branch of Human Resources Development Canada in Ottawa.

"We felt people needed to understand a little more about the retirement income system in general, the CPP and their own contributions," she adds.

The new statements include all contributions a worker has made to date, as well as an estimate of what their CPP retirement income will be when they turn 65, assuming the worker's earning pattern remains the same. The statements also include an estimate on disability and survivor benefits.

In a bid to further educate Canadians about the public pension system, informational inserts are mailed out with the statements. The leaflets are geared towards specific age groups.

"It gives them general information about the income retirement system in Canada, reminds people that public pensions--Old Age Security and CPP--are a base and it's secure, but it's a base to plan your retirement on. It's not going to give everything that everybody needs for retirement," says Drummond. She adds that feedback on the statements has been positive so far. "People seem to find the statement clear and easy to read."

The statements are just the beginning of an educational push by the federal government to educate Canadians about the CPP. "We've been talking to people in the private retirement industry, to associations, financial planners and other groups about partnering [and] getting more information out," says Drummond. "We're also developing a calculator tool for the Internet to help people in their retirement planning."

Plugging in employees

Ford of Canada is giving new meaning to the term homework. The automaker's global computers-at-home program--dubbed Model E--rolls off the assembly line this month. Ford's 17,000 eligible Canadian employees will receive home computers--with unlimited Internet access--for $10 a month. After three years, employees will own the equipment. In the U.S., where the program has been running for a year already, between 85% and 90% of employees signed up for the benefit. The program will cost Ford about $1,000 per employee.

"This is a means for communicating with our employees, on their terms and on their time," says Eini Di Bon, Ford of Canada's director of information technology. Eventually, he says, the company hopes to put pay stubs and other benefits information online.

Getting employees plugged in makes good business sense too, says Di Bon. "It's a way for our employees to experience what our customers are experiencing today on the Internet, [and to see] how the consumers perceive our products," he says. "Sometimes we're removed from how we do our work every day and how it affects the customer's perception of our products. But in reality, we all affect the consumer."

In addition, the company views the program as a family-friendly benefit. "One of the side benefits is that it's extending the [computer] competency beyond the immediate employee [because] it's also available to the family," says Di Bon.

The big smoke

Tobacco tops the list of ethical screens used by investment management firms. Of the 89 money managers surveyed, 33 have screened accounts.

SOURCE: Social Investment Organization

Corporate governance online

Leading the way in corporate governance is the Ontario Teachers' Pension Plan Board, which recently launched a new section on its Web site devoted to the issue. The massive $70-billion pension fund made public its proxy voting record for 2000 for over 350 companies it invests in. In the future, all voting decisions related to a shareholders' meeting of a Canadian company in which Teachers' owns shares will be posted about a week before the meeting date.

"We are increasing the transparency of our corporate governance actions," says Robert Bertram, executive vice-president with Teachers' in Toronto. "The Web site now provides our sponsors, plan members and others with disclosure, in full and in advance, of our voting intentions." The pension board will also include the reasons for its voting decision, where appropriate.

Q&A

John Izzo is the author of Values Shift: The New Work Ethic & What It Means for Business. He spoke to benefits canada about today's new breed of employee and the changing nature of work.

What inspired you to write this book?

I do a lot of work with companies around attraction and retention and I sense there is an A team and a B team emerging. The A team gets the fact that there are some fundamental changes in terms of what people want from work. The B team doesn't. I wanted to talk about what some of the A team is doing. The second thing is that all three of the major generations in the workforce in North America are profoundly changing what they want from work and companies have to pay attention.

Are companies clueing in to the changing nature of work?

Some are resisting it, saying it's just an artifact of a temporarily hot economy. Money is easier to understand, benefits are easier to understand and less endemic to who we are than things like partnership, balance, noble cause and development. Those things are much more a part of who we are and require deeper changes than many companies are wanting to make.

What will happen when the economy takes a downturn?

Values change very slowly in society--they come from an imprint that people get at a certain age. If the economy slows down, will the less skilled and inexperienced employees be able to act on those values as boldly as they might be able to right now? No. But if you're still trying to attract the top people, you're still going to have to respond to those values. The values won't change if we get into a recession.

What role do pension and benefits play in the new world of work?

I think we've made some assumptions about what people want their money in benefits to go towards. The shift towards partnership--people really want-ing more choice and more say--has direct implications [for benefits]. Sabbaticals and time off are an example of that. I think you're going to see time, and time off to do things [employees] are interested in, becoming a core part of the benefits package.

FOCUS

Maternity leave plans explained

By Kathryn Dorrell

The federal government has extended employment insurance benefits for employees in federally regulated industries (including shipping, telecommunications, banking and broadcasting) to a total of 52 weeks. This applies to employees taking combined maternity/parental leave for babies born or adopted as of Dec. 31, 2000.

Natasha vandenHoven is vice-president, research and corporate counsel, with Aon Consulting in Toronto. She spoke with BENEFITS CANADA about what the changes mean for plan sponsors.

What is the biggest misunderstanding surrounding this new maternity/parental leave legislation?

Many people think that because employment insurance benefits have been extended to 50 weeks, plus the two-week waiting period, that their jobs are protected for a year under provincial legislation. In fact that's not the case in many provinces (see "Parenting by province," below).

Does an organization have to let its employees know if their job will not be held if they choose to take a 52-week leave?

It's good human resources practice to do so. Employers have to assess what they're required to do under provincial legislation and they should have a policy on how they're going to address employees who are going on leave.

National employers will have to assess what they're going to do on a national basis. For example, whether they'll follow the provincial employment standards for where employees work, or have a national maternity/parental leave policy that may be more generous than the minimum standards in some jurisdictions.

What is the likelihood of all provinces adopting a 52-week leave policy that ensures job protection?

For some provinces it's a big change. For example, it would be a huge leap for Alberta to go from the current 18-week maternity leave to a 52-week combined leave. I would expect the territories and the other provinces to follow suit eventually. Jurisdictions are watching to see what other regions are doing.

Parenting by province

An important note for plan sponsors of non-federally regulated companies. Let plan members know that unless the province they work in has made amendments to maternity/parental leave legislation, as Nova Scotia and Newfoundland have recently proposed, their organization does not have to offer them job protection if they choose to take a leave longer than what is listed below.

Source: Aon Consulting

Notes: * Legislation has been introduced but was not passed at press time.

1. In many regions, the maternity and parental leave may be extended depending on medical or other criteria. Not all provinces offer a combined leave.

2. Where benefits plan is contributory, coverage is continued as long as employee continues to make benefits plan contributions.

3. For federally regulated industries.

The Romanow Commission has released its final report on the future of healthcare in Canada.

For Commissioner Romanow's recommendations, click here.

Click here for Senator Michael Kirby's report, "The Health of Canadians – The Federal Role: Recommendations for Reform."