©  Copyright 2002 Rogers Media. The following article first appeared in the March 2002 edition of BENEFITS CANADA magazine.

> Regulatory change. The principal theme of recent change is increased member protection. In Canada, the primary initiative was the report by the Joint Forum of Financial Market Regulators, which aims to harmonize regulations and standards applied to DC plans across all provinces and plan types.

The U.K. has introduced a maximum expense level payable from a qualified pension equal to 1% of assets. While this does not apply to all pension plans, it is expected to set the standard for expenses.

In Australia, the minimum employer contribution to a DC plan has increased from 8% of pay to 9%. In the U.S., sponsors are waiting for new regulations on company stock within DC plans and guidelines on providing investment advice to members.

> Plan design. In Canada and abroad, the movement towards DC plans continues, as investment results in defined benefit (DB) plans worsen and budgetary restrictions increase. In the U.K., this trend is bolstered by new accounting rules that require the immediate recognition of DB gains and losses. In Australia, where plan sponsors have tended to control investment decisions, there is a trend towards more member control.

> Investment structures. At home, there is less demand for sector funds, company stock and passive funds. More organizations are offering multiple funds with offsetting investing styles in key asset classes. As well, an increasing number of sponsors are supplementing their foreign equity options to take advantage of revised foreign content limits.

American sponsors are restricting employees' stock balances in 401(k) plans. In the U.K., where DC options have traditionally focused on domestic equities, more organizations are offering foreign equity options. Down under, master trust structures--which allow multiple sponsors to share plan investment costs--have helped employers increase the number of investment options they can offer to members. Meanwhile, the Australian market has seen a growth in sector and ethical funds.

> Recordkeeping. Consolidation has been a global phenomenon as recordkeepers try to achieve critical mass to support expensive investments in technology. The focus of service enhancements and technological improvements in both Canada and the U.S. has been on employer reporting and access to information. In the U.K. and Australia, where member-driven technology lags North America, advancements have focused primarily on the development of Internet and interactive voice response capabilities.

> Communication trends. Extreme market volatility has had little impact on member communications. Most sponsors in Canada and abroad are stressing the importance of staying the course. The one notable trend is in Australia where more plan sponsors are offering third-party advice to members.

> Governance practices. The current investment climate has caused sponsors around the globe to focus on the potential legal risks associated with operating a DC plan. This has resulted in the introduction of more formal governance processes, which include the formal monitoring of providers. In the U.S., more sponsors have adopted written investment policy statements for their DC plans. BC

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."