Industry

Saskatchewan is granting its retirees a little more freedom. The Department of Justice announced changes to the province's pension regulations in October that effectively remove current withdrawal limits on life income funds (LIF) and locked-in retirement income funds (LRIF).

"There'll be no restrictions on the amount of withdrawal that can come out," says David Wild, superintendent of pensions. "Anyone with a locked-in retirement account will have the option of moving monies to a RRIF [registered retirement income fund] at retirement. Anyone who already has a LIF or an LRIF in Saskatchewan will have that money in a RRIF immediately. So the LIF and LRIF will no longer exist."

According to Wild, retirees, financial planners and financial institutions had become "frustrated" with LIF and LRIF rules in the last four years. On a technical basis, he says, they couldn't plan ahead because maximum withdrawals from LIFs and LRIFs change according to market conditions. Also, many found the formulas for calculating maximums complicated. On a philosophical level, Wild says regulators "received complaints, such as 'I'm a responsible adult. Who is the government to tell me how much money I can withdraw from my own LIF or LRIF?'"

But not everyone supports the amendments. Greg Hurst, manager, pension division, at Heath Lambert Benefits Consulting in Vancouver, says "if a person retires at age 50 (this is, by the way, the earliest retirement age under Saskatchewan's Public Employees Pension Plan, a defined contribution arrangement) and can have the discretion of cashing out their pension, how much justification can you have in restricting a 48, 45, 40, 35 year-old from the same rights?"

Hurst says the amendments won't promote private pension coverage. He adds the changes are a signal that Saskatchewan isn't interested in protecting pensioners. Wild says this is untrue, pointing out that the amendments show the province respects retirees' ability to manage their own affairs.

Pension regulators held their semi-annual meeting in late September and came to a consensus on a set of regulatory principles for the Model Pension Law, says the past chair of the Canadian Association of Pension Supervisory Authorities (CAPSA) and superintendent of pensions for B.C. Sherallyn Miller explains that currently, pension legislation differs across the country, so before the industry can harmonize, it has to draft a consensus model.

"It's going to take some time, but we do have a set of principles," says Miller. "Now we'll go to our ministries and say, 'what do you think?'"

The regulators also made minor revisions to the Proposed Regulatory Guidelines for Electronic Communication in the Pension Industry. This paper will be published in November.

You'll have to wait for a ruling on the Proposed Regulatory Principles for Capital Accumulation Plans and Pension Governance Guideline and Implementation Tool papers, though. Miller says consultations with the Joint Forum of Financial Market Regulators on those two papers are ongoing. "These are fairly substantial policy issues that people needed more time to look into."

From comments to date, the significant concerns raised on the Proposed Regulatory Principles for Capital Accumulation Plans are the potential increase in cost to members and the lack of a safe harbour. From the Pension Governance Guideline and Implementation Tool, respondents say some guidelines are not applicable to defined contribution or small plans. Miller says revisions won't be implemented until all comments are received.

The security of Canadian pension assets was put to the test on Sept. 11 and passed with flying colours. "We were happy to see how trades were settled directly and that brokers and portfolio managers were on top of everything," says Raymond Beauchamp, senior vice-president of corporate services with Desjardins Trust in Montreal. "This shows how secure pension assets are."

Custodians agree that the terrorist attacks on the World Trade Center were an excellent test of the industry. The leading firms say only a few clients contacted them inquiring about the safety of their assets and whether trades would be completed.

Jose Placido, senior vice-president at RBC Global Services in Toronto, says immediate communication to clients to address any fears was the most important aspect of managing the ordeal. "We reached out to clients, to tell them the markets were down and ensure them that their assets were safe and [we could] get them cash balances if they were needed."

Y2K preparation helped custodians through the crisis. As part of Y2K, custodians had business contingency plans in place to ensure that there was a complete back-up of all systems and transactions at another site. "[We] had time to plan for a predicted disaster. This was the building block for what happened when the surprise disaster occurred. It definitely helped," says Placido.

Tom MacMillan, president and chief executive officer, CIBC Mellon in Toronto, adds that its business recovery plan was more rigorous because of Y2K preparation. CIBC Mellon also had grief counsellors on site on Sept. 12 to help employees cope with the tragedy.

- with files from Kathryn Dorrell

Canadian Healthcare Manager honoured leaders in the healthcare industry at its third annual Who's Who in Healthcare awards last month.

This year's winners are: government category: Dr. Larry Ohlhauser, former registrar of the College of Physicians and Surgeons of Alberta in Edmonton. Group insurance category: Fred Holmes, national practice leader, group health & welfare, Buck Consultants in Toronto. Healthcare provider category: Dr. Estelle Simons, professor and head of allergy and clinical immunology at the University of Manitoba's faculty of medicine. Hospital management: Tony Dagnone, president and chief executive officer of London Health Sciences Centre in London, Ont. Medical research: Dr. Salim Yusuf, director of the Population Health Research Institute at Hamilton Health Sciences Centre, and director of McMaster University's division of cardiology in Hamilton, Ont. Pharmaceutical category: Dan Clow, senior manager, health strategies at GlaxoSmithKline in Mississauga, Ont. Plan sponsor: Roger Melançon, director of employee benefits at the National Bank of Canada in Montreal. Technology: Dr. Stephen Lapinsky, associate director in the intensive care unit at Mount Sinai Hospital in Toronto.

Canada will follow a U.S. decision to push back conversion to single-day settlement of securities trades, known as T+1, for one year to 2005. The Canadian Capital Markets Association (CCMA) says the delay will only affect trading in equity markets. "Because of the integration between Canada and the U.S., and the inter-listing of stocks, the move to T+1 for equities has to be at the same time," says CCMA spokesperson Eric Pelletier. The U.S. Securities Industry Association (SIA) says the new plan, to be announced in January, would build on "lessons learned from recent events," referring to Sept. 11. Pelletier says it's still unclear if the U.S. is delaying its entire T+1 initiative.

- Doug Watt, advisor.ca