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© Copyright 2000 Rogers Media. The following article first appeared in the April 2001 edition of
BENEFITS CANADA magazine.
Insights
Contrarian views, news and international intrigue
By Andrea Davis
DC growth slows
Defined contribution (DC) plan assets worldwide have grown by 17% annually in the four years ending in
1999, according to a study by InterSec Research Corp. The survey looked at DC plans in 14 countries,
including Canada. It reveals that in Canada, the percentage of total pension assets in DC plans has dropped
from 5% in 1995 to 4% in 1999.
"In large part that's because the defined benefit plans [in Canada] have a larger allocation to equity and
therefore have had a bigger boost due to market appreciation," says Sarah Bever, vice-president with
InterSec in Stamford, Conn.
Bever says it's hard to make broad generalizations regarding DC plans. "Each country is so dominated by its
own influences, which affect the way each country's system is designed," she says. She cites South Africa
where the AIDS epidemic is affecting life expectancy, which in turn affects the approach to the pension
system.
Other key findings in the survey include:
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There is a trend towards increased equity and the global investment of assets in DC plans.
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Margins for both asset managers and administrators in some countries are low because of competitive
pressures or capped fees. For example, the Stakeholders' Pension System in the U.K. caps investment
fees at 1%.
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No consensus exists among the 14 countries surveyed with regards to the appropriate level of plan
member choice of investment options within the DC plans.
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The Internet will become increasingly important for sales and administration in DC plans. "There's
quite a span from country to country with regards to the amount of Internet penetration," says Bever.
"But the Internet is on the radar screen in just about every country. In most countries, at the very
least, information is transmitted over the Internet but they're not really there in terms of
transactions."
In fact, Canada is the only country surveyed that has the technology in place to enable financial
transactions online.
The DC market in the 14 countries surveyed is worth US$543 billion.
Migraine meltdown
Are migraine headaches affecting your workplace absenteeism and disability rates? If the results of a
recent Statistics Canada survey are any indication, the answer is probably yes. Nearly two million
Canadians have been diagnosed with migraines. The condition has a major impact on productivity and
lifestyle, according to the report, including days away from work, hindered job performance and restricted
activities.
Migraines account for seven million lost working days annually, reports the study. Migraine sufferers
reported an average of 1.8 disability days for the two-week period before the survey was taken, while
non-sufferers reported only 0.8 days.
For employers, "having a dark, quiet room with a bed [can make a big difference]," says Michele Sharp,
director of development and communications with The Migraine Association of Canada in Toronto. "If somebody
goes and lies down and they take their medication right away, they're usually only out [of work] for one to
two hours. Instead of losing eight hours out of that person because they have to go home, you'll lose two."
Migraine sufferers make heavy use of healthcare services, with 33% of those diagnosed with the condition
reporting seven or more consultations with healthcare professionals in the 12 months preceding the survey.
In addition, migraine sufferers tend to have more chronic health conditions--such as allergies, arthritis,
back problems and ulcers--than non-sufferers.
The Migraine Association of Canada offers a new workplace program, where it will visit an organization,
assess the physical work environment and give pointers on ways employers and employees can avoid migraines.
Common triggers in the workplace include shift work or travel that disrupts sleep patterns, perfume,
fluorescent lights and computer screens.
Workload alert
Workload is becoming one of the key collective bargaining issues among time-strapped employees, according
to a survey of more than 1,200 private and public sector employees conducted by Ekos Research Associates
Inc. in Ottawa for the Canadian Union of Public Employees. The majority of unionized employees (71%) want
their unions to place high priority on workload concerns and work-family balance. Nearly half of the
respondents (43%) say that their workload has increased over the past two years, with full-time employees
working an extra 5.5 hours a week.
Organizations, for their part, are making an effort. Half of those polled say their employers have tried to
address workload concerns by introducing new tools, technology and training, increasing staff levels,
organizing work more efficiently and establishing more flexible work arrangements.--Young Um
Sharing surplus
Almost 60% of respondents believe plan members should be entitled to a portion of their pension plan
surplus.
Stock options for all
Telus Corp. has extended stock options to all employees, which means janitors as well as top brass at the
Burnaby, B.C.-based company will receive the perk.
More than 20,000 employees will each receive 100 stock options in the firm's non-voting shares at an
exercise price of $34.88 a piece. Plan members will be given an extra 100 stock options in each of the next
two years, bringing the three-year total to 300. The first 100 options vest with employees in 2003, at
which time they can purchase their shares at the exercise price, sell the shares and receive the difference
between the selling price and the exercise price or keep their options for up to eight more years. The
options must be exercised within 10 years of being granted or they are forfeited.
The stock-options-for-all plan is aimed at helping Telus attract and retain employees.
"Traditionally, telecommunication companies have invested in switches and equipment and networks and done a
pretty good job at it," says Doug Strachan, media relations manager with Telus. "But there's been less
emphasis on investing in the most important asset of the company and that's the people. The stock option
plan is a step in that direction."
In a recent report, the Conference Board of Canada says that only 6.5% of mid- to large-sized businesses in
Canada currently provide universal stock options.
--Kathryn Dorrell
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