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  • Employee or independent contractor? | Small Biz Advisor
    law and created a new two part test The case Connor Homes operated foster homes and group homes for children with behavioural problems They engaged both employees and independent contractors This appeal involved three workers who signed contracts to provide services as independent contractors The issue was whether or not CPP and EI contributions should have been made Justice Mainville who wrote the decision gathered analysis from three very well known Canadian cases and then created a new two part test At paragraph 39 of the decision Justice Mainville explained that the first step is to always clearly define the intent of the parties the subjective intent of each party to the relationship must be ascertained This can be determined either by the written contractual relationship the parties have entered into or by the actual behaviour of each party such as invoices for services rendered registration for GST purposes and income tax filings as an independent contractor With the intent of the parties in mind Justice Mainville then turned his attention to analyzing the actions of the parties in preparation for step two Using the checklist that had been established by some of the leading cases in this area of law he asked a What level of control is exercised over the worker s activities b Does the worker provide his or her own equipment tools c What is the level of financial risk assumed by the worker d What is the opportunity for profit in the performance of the tasks Under this second step of analysis Connor Homes failed to prove that the three workers were independent contractors Although there were contracts stating that the relationship was independent contracting the reality of the actions of the parties created an employer employee relationship The workers had to adhere to company

    Original URL path: http://www.smallbizadvisor.ca/group-benefits/employee-or-independent-contractor-2855 (2016-04-26)
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  • Employers ready for mandatory pensions: Survey | Small Biz Advisor
    required employee and employer contributions by a margin of nearly two to one over auto enrollment with the ability to opt out The preferred mandatory DC plan would require employees to contribute only on earnings more than 25 000 rather than on the first dollar of earnings For the last seven years employers and the public at large have been bombarded with white papers and public consultations on pension reform

    Original URL path: http://www.smallbizadvisor.ca/news/employers-ready-for-mandatory-pensions-survey-2854 (2016-04-26)
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  • Long-term care insurance: Most claims paid at home | Small Biz Advisor
    Canada s elderly and those suffering from chronic illness or disability are cared for by family members and four fifths of those suffering from Alzheimer s or other dementias are cared for in their own homes From 85 to 90 of claims are paid to people living at home According to a Conference Board of Canada report less than 5 of Canadian employee benefits packages now offer LTCI It has to be better supported so that more Canadians are aware of the product Henderson says People are spending too long in retirement and living too long to ignore it Henderson believes that once LTCI becomes a more established product for individuals organizations might also begin to include it in benefits packages but thinks that similarly to critical illness coverage benefits will probably have to be capped perhaps at 25 000 to 50 000 That doesn t go very far when you re looking at needing long term care for five or 10 years she says Current government programs will fund only about half of the baby boomer generation s long term care costs estimated at almost 1 2 trillion What happens when we age is the largest threat to everything

    Original URL path: http://www.smallbizadvisor.ca/group-benefits/long-term-care-insurance-most-claims-paid-at-home-2853 (2016-04-26)
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  • Group retirement plans for small biz: What to look for | Small Biz Advisor
    says small businesses have a number of factors to weigh when it comes to deciding whether or not to offer a group retirement plan including cash flow a willingness to match contributions and sustainability We take a look at each of those issues in Is your small business client ready to offer a retirement plan But for those clients who are ready to start offering a competitive group savings and retirement plan what should they look for Steven Cohen owner of Steven Cohen Insurance Agency says advisors helping business owners with setting up a group retirement plan should Review the various features and benefits required to meet the company s needs Assist with the choice of carrier Aid in the plan design Offer administrative management support and implementation services such as employee meetings and information sessions On a global basis help advise on the various investment options available Look for quotes from providers who can offer your client a broad range of investment options beneficial management fees strong administration services and financial advice for employees and who can ensure compliance with the Capital Accumulation Plan CAP Guidelines says Cohen Ultimately he adds business owners need to go into this decision

    Original URL path: http://www.smallbizadvisor.ca/group-retirement/group-retirement-plans-for-small-biz-what-to-look-for-2827 (2016-04-26)
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  • Target practice | Small Biz Advisor
    post retirement indexing become conditional upon affordability and accrued benefits become subject to the same risks as future accruals These changes can significantly reduce a plan s funding liabilities on conversion The reason is that the previously automatic inflation protection provisions which can be expensive no longer have to be reflected until the conditional benefit increases are actually granted To ensure that these plans target a high degree of benefit security robust risk management objectives are needed Specifically the regulations require that plans meet the following minimum risk management goals upon conversion at least a 97 5 probability that base benefits will not have to be reduced in any year over the next 20 years since 97 5 represents 39 times out of 40 this means that bad news regarding benefit reductions is anticipated in just one year out of every 40 and conditional indexing inflation protection provisions that are expected to provide on average over the next 20 years at least 75 of the value of the prior plan s indexing provisions as well as 75 of annual increases in the consumer price index CPI in respect of accrued benefits that had previously been based on a final average earnings formula These risk management objectives which must be tested using stochastic asset liability modelling showing the full likely range of potential financial results over future decades effectively result in building significant margins into the underlying contribution rules of the shared risk plan Therefore while this model can significantly bring down volatility in funding requirements and possibly reduce volatility in the annual accounting cost it will not likely reduce the plan s long term cost Also stochastic projections involve complex mathematical modelling and can therefore be expensive to create so these projections effectively increase the administrative complexity of operating the plan going forward Variations and alternatives While the New Brunswick approach is groundbreaking in many ways and has already been adopted by a number of plans in both the public and private sectors such as the province s plan for civil servants and the University of New Brunswick there are some elements that other jurisdictions may want to consider adapting if they establish their own target benefit framework In particular alternative regulatory models that allow for greater flexibility by being less prescriptive in their risk management procedures or that reduce administrative complexity could further increase the appeal for plan sponsors For instance another regime could allow the various stakeholders to negotiate either the degree of confidence that accrued benefits will not be reduced or the target level for future conditional indexing rather than having these thresholds prescribed by regulation Alternatively the underlying governance framework and funding mechanism could be modified more substantially by removing the mandated risk management goals altogether For example a regime could allow required contribution levels to be established based on a best estimate going concern valuation with an explicit PfAD provision for adverse deviations sometimes known as a going concern plus regime Minimum PfADs and surplus

    Original URL path: http://www.smallbizadvisor.ca/group-retirement/target-practice-2821 (2016-04-26)
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  • Prognosis positive for pensions’ equity investments | Small Biz Advisor
    alternatives performed well and the value of long and real return bonds fell reducing pensions obligations said Hari Pushparaj senior associate investments with Mercer speaking Thursday at Mercer s 22nd annual Fearless Forecast in Toronto While 2013 was a very good year for pension funds investments what do investment managers expect this year There was less pessimism in the forecast with fewer managers predicting low or negative equity returns said Pushparaj Surveyed managers expect strong equity returns with domestic and global markets producing returns somewhere between 8 and 9 They expect investment returns of 9 5 in private equity and between 5 and 6 for alternatives real estate hedge funds and infrastructure As for bonds managers were more bearish in their expectations Those returns are forecast to be 1 5 for the DEX Universe Bond Index and 0 5 DEX Long Bond Index Managers forecast Canadian GDP growth at 2 0 and global GDP growth at 3 5 But in case strong equity returns aren t enough to keep pension investors happy 85 of managers think Canada will win gold in men s hockey at the Sochi Olympics That would make another dream come true Mercer surveyed 47 Canadian and

    Original URL path: http://www.smallbizadvisor.ca/group-retirement/prognosis-positive-for-pensions%e2%80%99-equity-investments-2817 (2016-04-26)
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  • Is your small biz client ready to offer a retirement plan? | Small Biz Advisor
    are either customized or pre packaged such as PRPPs Deciding which to use begins with understanding the anticipated annual cash flow A cost effective customized plan should have a minimum annual employer employee contribution of at least 50 000 The minimum contribution for an effective pre packaged plan is 10 000 Based on a cash flow of 10 000 Abrahams expects that there would be a minimum of five employees participating in a plan If a business isn t able to commit this kind of cash year after year it is not ready for to offer a group retirement plan Willingness to match contributions A second key factor to consider is whether or not the business is willing to match employees contributions whether at a certain percentage or up to a maximum amount Matching is by far the most significant cost associated with offering a plan says Abrahams While there are many creative ways to structure this for example building in a retention strategy by increasing the employer contribution amount after an employee has been with the firm for several years the bottom line is that a pension plan isn t going to be viable without it Although we know that group plans offer lower management fees and thus potentially better returns than what you may find in an individual RSP employees generally don t perceive exceptional value unless there is matching notes Abrahams If the firm isn t going to contribute something too most employees will be just as inclined to top up their own privately held RRSP instead Sustainability Thirdly having committed to some degree of matching the firm should be mature enough to expect to sustain these contributions for the foreseeable future This is where some careful thought is required Business owners need to consider whether or

    Original URL path: http://www.smallbizadvisor.ca/group-retirement/is-your-small-biz-client-ready-to-offer-a-retirement-plan-2807 (2016-04-26)
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  • Ontarians forgo retirement savings to pay off debt | Small Biz Advisor
    top financial priority is paying off debt while 19 said it s to pay down their mortgage and 10 said their top financial priority was to stop having to live paycheque to paycheque Of the 21 of respondents who said they had yet to start saving for retirement 52 said they were focused on paying off debt 51 said they couldn t afford it 49 said saving for retirement is not a priority for them at the moment As household debt in Canada hits a new high it s encouraging to see Ontarians recognizing how important debt repayment is to their financial future says Bill Maurin Meridian s acting CEO and CFO At the same time however it s important to not lose sight of their retirement goals Saving for the future can be easier if you put your investments on autopilot with a pre authorized contribution plan to contribute to an RRSP or TFSA If you coordinate the withdrawals to align with your payday the money likely won t even be missed Despite the survey s findings most Ontarians plan to retire at 62 years of age while current retirees on average retired at 59 years of age Of

    Original URL path: http://www.smallbizadvisor.ca/news/ontarians-forgo-retirement-savings-to-pay-off-debt-2806 (2016-04-26)
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