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The most current pension and investment information available in Canada, located in these easy to use directories. Click on any logo for information.
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©Copyright 2001 Rogers Media. The following article first appeared in the December 2001 edition
of BENEFITS CANADA magazine.
Insights
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Contrarian views, news and international intrigue
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By Deanna Rosolen
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Insights:
Picking up the pieces post-Sept. 11
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Veiwpoint:
Keeping plan members in the loop
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Picking up the pieces post-Sept. 11
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Canadian employees have spoken and since Sept. 11, they have
given top executives low marks when it comes to how they helped the workforce
during the traumatic period following the terrorist attacks in the U.S. At the same
time, employees give these leaders top marks for how they've chosen to direct their
organizations. These and other results are part of Aon Consulting's Canada
Back@Work study released in November.
Marilynne Madigan, Aon's senior vice-president in Toronto,
says the company was set to launch the research, compiled in the spring, in
September, but with the tragic events of the 11th, "we assumed that the landscape
had changed and we went out and did some additional research to compare what
employees were saying in terms of [employer] commitment pre-and post-Sept.
11."
The research found that employees are generally content with
their workplace and organization's direction since Sept. 11. But it also found that
one in five employees gave their employers a low grade (C+) for how effectively
they provided programs to help employees suffering stress or anxiety due to the
events of Sept. 11. Supervisors were given a slightly higher mark (B-) for their
efforts in helping the workforce readjust during the same period.
On the other hand, Aon discovered that the majority (69%) of
employees say management recognizes the importance of personal and family life, up
7% from the spring results. Madigan says that while work/life balance has always
been important to employees, it has taken on even greater significance.
"One of the things you'll see in our study is that since
Sept. 11 there's been an increase in terms of Canadian employees deciding to focus
more of their time and energy on personal matters and family life," she says.
Employers will have to recognize that work/life harmony is, in fact, a critical
factor in employee commitment. "In terms of impacting productivity and retention,"
she adds, "organizations are going to be obliged to really focus on what work/life
harmony means for their organization."
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A SAD FACT
According to World Health Organization statistics in a report entitled, WHO World
Health Report 2001, Mental Health: New Understanding, New Hope, one in four people
in the world will be affected by mental or neurological disorders at some point in
their lives. And as many as two-thirds of these may never seek the help of health
professionals, even when treatment is available.
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Viewpoint
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Keeping plan members in the loop
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What happens when members aren't informed of changes to their pension plans?
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By Ian Edelist
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Mystery. Intrigue. Surprise twist. These aren't usually the first
words that come to mind when we think of pension plan administration. However, they're
an apt description in this tale by an actuarial sleuth with a penchant for
pensions.
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The story starts when Company X offers an early retirement window
to its salaried employees. Company X's pension plan normally requires retiring members
to take a monthly pension on retirement. However, the early retirement window includes
a special provision allowing members to take a lump-sum commuted value instead of the
monthly pension. Mr. Y signs up for the early retirement window and transfers the
commuted value of his pension to Financial Institution Z.
Everything is merry until one year later when the provincial
regulators ask Company X why Mr. Y's ex-spouse can't receive her entitlement from
the plan in cash. "Ex-spouse? Entitlement?" asks the sleuth.
Company X informs the sleuth that Mr. Y and his ex-spouse had
signed a divorce decree six years before the early retirement window. The divorce
decree entitles the ex-spouse to a monthly pension of $500 when Mr. Y retires.
Financial Institution Z tries to come to terms with the ex-spouse and have the
monthly pension paid from the lump sum previously transferred. The ex-spouse wants
cash. "Oh boy!" cries the sleuth.
First, the provincial regulators need to be answered. Was Mr.
Y employed in Quebec where the law allows the ex-spouse to receive her entitlement
in cash? "No," explains the sleuth. The member resided in Quebec but reported to an
office in Ontario, which doesn't allow for such a transfer.
The Ontario provincial regulator wants to know why the
ex-spouse wasn't given the same options as Mr. Y on retirement, which include a
lump-sum transfer option. "Good point!" exclaims the sleuth.
Eventually, all is rectified and the ex-spouse is set to get
her money. In true Hollywood style, a twist occurs at the end of the story. Mr. Y
is struck by lightning, leaving his ex-spouse's daughter as the recorded
beneficiary of his funds at Financial Institution Z. The daughter agrees to
transfer the cash equivalent of a $500 lifetime pension to her mother who withdraws
the money in cash (after paying a withholding tax). For what purpose? We can only
speculate.
The moral of the story? Pension administrators and their
agents must send out regular reminders to members to keep them informed of changes
in family status and use this information to maintain a database of ex-spousal
entitlements. BC
Ian Edelist is a consulting actuary in the Toronto
office of Eckler Partners Ltd. iedelist@eckler.ca.
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Volatility
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Illustrated by David Brown
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News
News
