Gen Y too upbeat about retirement

Many millennial Canadians are confident that they’ll be able to put away enough for retirement— yet some of them haven’t started saving for their golden years.

This is according to a 2014 BMO Wealth Institute survey, Wealth Generation: The Financial Challenges for Generations X & Y. The majority (65%) of respondents expressed some degree of confidence that they will be able to retire comfortably when they decide to. Within that group, about one quarter (26%) of gen Y Canadians say they are very confident about retiring comfortably, compared with 17% of generation X and 16% of baby boomers.

However, the study reveals that gen Y does not use the most popular retirement savings vehicles, RRSPs, to the same extent as other generations. About 50% of gen Y respondents use RRSPs— compared with more than 60% of gen X and more than 70% of boomers. And 14% of gen Y say they aren’t saving for retirement at all, compared with 10% of generation X and 6% of boomers. Part of the reason for this discrepancy, according to the report, is that many companies no longer offer DB plans to new employees.

The study also shows that generations X and Y intend to retire two years earlier than the average baby boomer (at age 61.7 versus 63.7). The compound effect of saving less for retirement, having reduced access to company pensions, planning to retire earlier, saving for their children’s education and paying more for basics such as food and housing means that both generations X and Y are less likely to meet their retirement goals than the generation before them, the report notes.

The survey polled 1,413 Canadians (842 gen X and gen Y, and 571 boomers).

Brand drug cards: Some plan observations

The area of extended health benefits doesn’t often lend itself to controversy across multiple stakeholder groups. The most debated drug plan issue of the day appears to be that of the impact of brand name drug cards (also referred to as patient choice cards or brand drug coupon cards). Regardless of the title used, we are talking about a third-party payment card that’s intended to cover the difference between the cost of a brand name product that has lost its exclusive patent protection and the cost of a generic equivalent.

Brand drug cards have both advantages and disadvantages, so there is no right answer when it comes to their impact. The effect on plan sponsors and their members can vary significantly. Regardless of one’s perspective, this is an area that carriers, claims processors, plan sponsors and advisors need to give due consideration, because the use of these brand cards is not a trend that will disappear any time soon. In fact, it’s very likely that we will see greater utilization as these programs continue to evolve and the number of products made available grows….

What are the pros and cons of these cards, and what’s the impact on employer-sponsored drug plans? Read the full article at

Meet an Advisory Board Member

Jean-Guy Gauthier, independent benefits consultant

What are some of the highlights of your career in benefits so far?

I started in 1985 as one of the first pension analysts at Hewitt in the team that started its first Canadian office. I then switched to the benefits side to work on new innovative flex plans and participate in the opening of the Montreal office. Next, I was a partner at Morneau, where I participated in building a great team of benefits consultants—most of whom are still there. Then I moved to the insurance company side, where I worked at Desjardins, helping to set up its risk management structure and, finally, to Standard Life in a strategy/marketing/product development job. Now I’m working as a freelance consultant on great projects.

What is one major benefits development that you’ll be looking out for in 2014?

With so much attention being given to prevention and case management in the disability and prescription drug areas, I will be looking at how employers, brokers, consultants and insurers all take some leadership in that area.

What’s the last movie you saw?

Rush—a great movie for a Formula 1 racing fan! And a great story on how two different types of people can be successful in the same competition and learn from one another.

Market Watch

Empire Life Investments Inc. recently launched the Empire Life Emblem Diversified Income Portfolio, designed for conservative institutional and retail investors seeking predictable and diversified income. The portfolio includes a target asset mix of 80% fixed income and 20% equities. Diversified sources of income include government and corporate high-yield bonds as well as dividend-paying equities.

Liberate Health, a Toronto-based healthcare company, in conjunction with the Rogers Healthcare Group, has launched the first web platform to help patients better understand their diagnoses and treatment options and encourage adherence. Liberate combines a free iPad app and an online portal. Once a physician downloads the free app, his or her patients gain access to a website where they can review all of the information provided to them during their clinical visit—which includes infographics, test results and an audio recording of the conversation that took place during the appointment—on their own time.

Alberta Blue Cross has created a website to promote wellness at work. Designed as a one-stop shop, includes wellness resources, a listing of relevant upcoming events and a downloadable tool kit providing a step-bystep approach to cultivating workplace wellness.

2014 CPBI Charity Benefit

Attendees got down and got groovy at the 1970s-themed 2014 Canadian Pension & Benefits Institute (CPBI) Charity Benefit gala in Toronto on Feb. 6. This annual event raises funds for research into Crohn’s disease and ulcerative colitis.

In all, 290 people attended, raising $107,000 through ticket purchases and an additional $6,000 through activities such as a raffle and a 1970s historical trivia contest among the different tables. The Industrial Alliance table came out ahead to win the contest.

All donations will go toward the research of Dr. Nicola Jones, a gastroenterologist at the Hospital for Sick Children in Toronto, who is working on improving treatments for youth suffering from these conditions.

2014 CPBI Ontario Volunteer of the Year Award

Recipient: Martin Leclair, vice-president, Proteus Advisory Services

Q: What has been your involvement with the CPBI?

A: I am the current vice-chair of the Ontario Regional Council. I also lead the education committee. I served as a chair of the CPBI Pension Investment Forecast in 2011, 2012 and 2013. I was also a member of the organizing committees for the CPBI Benefit Ball in 2011 and 2012, as well as the CPBI Ontario Regional Conference in 2009, 2010, 2011 and 2012.

Q: What do you like about working in the pension industry?

A: What’s not to like? This industry is a playground for the true innovators, filled with opportunities to make a difference and have a positive impact on the lives of millions of Canadians. We’re only starting to understand plan member behaviour—what they need and want, and what role technology should play. So much is left to improve or build from the ground up. No one knows for sure where this industry will be in 10 years, but playing a role in taking it to the next level is very exciting.

Fixed income restructuring on the horizon

Investment consultants, institutional asset owners and intermediaries across the globe predict significant fixed income restructuring this year amid concerns about rising interest rates and a greater appetite for real assets, research suggests.

The 2014 Global Investor Survey from Casey Quirk and eVestment foresees a significant realignment of fixed income portfolios for 2014. Nearly half (48%) of respondents expect to restructure their fixed income portfolios— particularly as corporate pensions continue to embrace liability-driven investment strategies and as investors worried about interest rates move away from strategies that are sensitive to rate changes. Rising interest rates are the biggest concern for the investors polled (corporate pensions, public pensions, DC plans, non-profit investors, investment consultants and other types of institutional investors). On average, 53% of all of these different types of investors cite interest rates as a major worry.

The study also predicts a stronger desire for real assets as investors continue to diversify their portfolios. Real assets are expected to be the largest category (14%) of new search activity in 2014, compared with 6% in 2013.

“The survey findings indicate that to be successful, fund managers will have to become adept at meeting the needs of asset owners seeking specific solutions, elevate their fixed income game and shift more rapidly to offering a globalized investment framework that incorporates both traditional and alternatives skills,” says Jeffrey Levi, director at Casey Quirk.

The survey polled more than 65 investment consultants worldwide and more than 135 institutional investors globally.

This month in numbers

49% of institutional investors around the world expect to boost their real estate allocations in 2014 — BlackRock survey

2014 Benefits & Pension Summit

April 28 & 29, 2014 / Marriott Eaton Centre, Toronto

This annual event offers presentations and case studies for employers to learn about reducing costs, improving productivity and managing risk. With three tracks (Group Benefits, DC and DB), delegates can customize their conference experience. More than 40 speakers have been confirmed, including:

  • Opening keynote: David Horsager, award-winning speaker, bestselling author, producer and business strategist
  • Expert Panel on Pension Reform: Exploring New Solutions Bill Robson, C.D. Howe Institute; Jim Keohane, HOOPP; Zev Frishman, Open Access Ltd.; Michael Millns, Towers Watson; David Lawson, Workers Compensation Board–Alberta
  • Employer Panel: Wellness Strategies that Work Melissa Barton, Mount Sinai Hospital; Doug Dickson, BP Energy; Colleen Falco, Niagara Casinos
  • Closing keynote: Max Valiquette, managing director of intellectual property, Bensimon Byrne

View the full agenda online at


In the February 2014 issue, an incorrect amount was cited in “The Real Deal.” The sentence should read as follows: “Real estate equity increased to $86.51 billion in 2012 from $55.43 billion in 2008, while infrastructure increased to $43.66 billion in 2012 from $20.15 billion in 2008.” Benefits Canada regrets the error.

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