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  • Canadian pension system outshines U.S. | Small Biz Advisor
    National Institute on Retirement Security The research of Turner and Rhee shows that in none of these three countries does the average employee alone absorb all of the funding investment and longevity risks in order to reach with the help of government assistance a basic standard of living By contrast in the U S nearly all of these risks are borne by the individual rendering the majority of the country s employees woefully underprepared for their golden years Americans are struggling to save for retirement says Rhee The typical family has only a few thousand dollars saved The research also finds that compared to the U S Canada Australia and the Netherlands offer greater economic security in retirement through higher income for low and mid wage workers provided by government assistance and universal or quasi universal employer sponsored retirement plans In Australia and the Netherlands universal or quasi universal employer sponsored programs provide a significant supplement to government retirement income The paper suggests that while all countries are unique the U S could borrow elements from the pension programs of Australia the Netherlands and Canada Australia Australia s universal workplace retirement system is a DC system in which employees are individually responsible for investment risks However the success of the system is based largely on nearly universal coverage and high mandatory employer contributions which are now a gross 9 of pay and will rise incrementally to a gross 12 of pay in 2019 the study notes Australia is also setting standards for things such as fee disclosure and financial advice The Netherlands Funded primarily by employers the Dutch pension model provides some of the highest income replacement rates among wealthy nations Employers are shifting market and longevity risks toward employees but employees absorb those risks as a group and intergenerationally

    Original URL path: http://www.smallbizadvisor.ca/news/canadian-pension-system-outshines-u-s-2504 (2016-04-26)
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  • Group Retirement | Small Biz Advisor - Part 9
    18 2013 Industrial Alliance s new group savings and retirement statement has been ranked first in Canada by Dalbar an DPSP available in Manulife GRS product BY Staff April 11 2013 Manulife Financial s FutureStep product now offers small and mid sized Canadian businesses a deferred profit sharing Saskatchewan Pension Plan to apply for PRPP BY Staff April 10 2013 Saskatchewan s deputy premier and minister of finance Ken Krawetz introduced legislation to enable the Saskatchewan Pension Supreme Court dismisses Carrigan BY Staff and BenefitsCanada com Staff April 2 2013 The Supreme Court of Canada has dismissed the application for leave to appeal in Carrigan v Carrigan New retirement funds from Great West Life BY Staff April 1 2013 Great West Life Group Retirement Services is now offering a comprehensive suite of multi manager asset class Saskatchewan next to introduce PRPP legislation BY Staff March 21 2013 Saskatchewan Finance Minister Ken Krawetz announced yesterday in his budget address that his government intends PRPP bill dies in B C BY Staff and BenefitsCanada com Staff March 20 2013 When the B C legislature adjourned on March 14 the Pooled Registered Pension Plans Act which was Are bonuses part of pensionable earnings

    Original URL path: http://www.smallbizadvisor.ca/group-retirement/page/9 (2016-04-26)
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  • PRPPs would help Canadians save: CLHIA survey | Small Biz Advisor
    working Canadians say they would save more for retirement if a Pooled Registered Pension Plan PRPPs option was available to them according to a new poll conducted by Research House on behalf of the Canadian Life and Health Insurance Association CLHIA A PRPP is aimed at small and medium sized business owners because it is intended to make it easier and cheaper for employers to offer a retirement savings program By relieving the employer of almost all administrative costs and compliance issues except for payroll deduction processing more companies employees and the self employed can participate However the Federal and provincial governments are still in discussion mode on the details of how PRPPs would work It is too early to understand exactly how this retirement option will impact business owners ability to offer them and Canadians motivation to save The poll also showed that 90 of those asked support the federal government s proposal for employers to have better access to pension plans through PRPPs which would be administered by regulated financial institutions PRPPs have been in the spotlight in recent months after Federal Finance Minister Jim Flaherty announced agreement with the provinces for governments to move ahead with plans

    Original URL path: http://www.smallbizadvisor.ca/news/an-prpp-would-help-me-save-say-canadians-209 (2016-04-26)
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  • The pros and cons of a group retirement plan | Small Biz Advisor
    align the interests of the employer and the employee he says Pre tax deduction for employee contributions is the third major benefit When an employee contributes to a retirement plan through payroll deduction contributions are made on a before tax basis It is an immediate tax break for employees The final benefit is that a group retirement plan can allow employees to access to a broader selection of investment choices under one roof including institutional investments that aren t available to retail investors Because employees are part of a group they can have access to institutional funds that usually have lower investment management fees than traditional retail funds explains Proulx These savings translate into more money in the employees pockets working for them over the long term The Cons of a GRP Proulx says there are three major challenges to implementing a GRP for employees The first is the perception of cost Many small business owners think the price of running a plan too high and that they cannot afford to implement one he says The second is that GRP plans can be complicated to implement and run Legislations guidelines and mandatory governance for some plans are often more than enough to cause an owner to second guess his desire to implement a plan Business owners worry that they don t have the time or expertise to administer a plan says Proulx But increasingly providers have products tools and support in place to help out business owners and ease the burden of complicated administration The last challenge is that a GRP is still not very popular in the small business industry This can leave business owners unsure if it is necessary or worth the challenges to implement a plan GRP Options If an owner does decide a GRP is the

    Original URL path: http://www.smallbizadvisor.ca/group-retirement/the-pros-and-cons-of-a-group-retirement-plan-202 (2016-04-26)
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  • Bigger pensions over higher pay, U.K. study reveals | Small Biz Advisor
    pension contribution by their employer compared to only 13 who would give up some of their salary for a extra vacation days The survey is part of a benchmarking research program funded by Aon Hewitt and asked over 7 500 workers across Europe about their views on topics such as retirement employee benefits and other pension related issues Surprisingly the desire for greater pension contributions from employers is the benefit

    Original URL path: http://www.smallbizadvisor.ca/news/bigger-pensions-over-higher-pay-uk-study-reveals-147 (2016-04-26)
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  • Rocky retirement ahead for younger workers, says Aon Hewitt | Small Biz Advisor
    Size S tagnant wages job insecurity and a steady decline in pension plan and retiree medical benefits have jeopardized the retirement security of many workers but to different degrees A new U S based analysis by Aon Hewitt shows that Generation Y workers those ages 18 to 30 may be most at risk from these trends despite having the most amount of time to save Due to lack of participation in defined contribution plans low savings rates and high rates of cashouts eight in ten Generation Y workers will not meet all of their financial needs in retirement unless they significantly improve their saving and investing behaviors Employees with no pension plan are at the greatest risk After factoring in inflation and postretirement medical costs Aon Hewitt projects Generation Y workers will need to save 18 7 times their final pay in retirement resources this assumes retiring at age 65 more will be needed to retire earlier Those without a pension plan will have a shortfall of 8 times pay assuming no withdrawls or cashouts during the saving period which is unlikely Aon Hewitt says that in addition to getting more employees onto retirement plans the plans should include auto

    Original URL path: http://www.smallbizadvisor.ca/news/rocky-retirement-ahead-for-younger-workers-says-aon-hewitt-145 (2016-04-26)
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  • A quick guide to DC pension compliance | Small Biz Advisor
    part by defining the roles and responsibilities of plan sponsors service providers and plan participants The guidelines were also designed to ensure that plan participants were well prepared to make their investment selections and that they were consistently provided information about the status of their investments When setting up a CAP it s important to understand the SMBs and or plan sponsor s expectations for the plan so that they receive best solution for their company Plan sponsors should be encouraged to also know their employees retirement savings goals and investment profiles This helps them to define the purpose of their plan and to identify the most efficient retirement solution to their participants For example are they focused on finding top talent becoming more competitive looking to help employees save for retirement or are they simply looking for a tax deduction The fund selection process runs much smoother when the purpose of the plan and the participants profiles are well defined Other important considerations during this stage include what are the key considerations involved with creating the plan who will lead the fund selection process who will offer advice about the funds to the plan sponsor To ensure that the process runs smoothly these points should also be followed ensure that the fund management team has a long standing successful track record have a solid understanding of their work style and investment philosophy confirm that there will be effective communication with unit holders thoroughly research their fund s performance history based on an appropriate benchmark confirm that the cost of managing the funds will be affordable Number of Funds The SMB plan sponsor or the third party will have to decide on the number of funds to be offered during the fund selection process Having the right amount makes it easy for participants to choose Keep in mind that fewer investment choices may simplify the decision making process for those who might otherwise be overwhelmed by having too much to choose from Also the correct number of funds means that the service provider can effectively monitor each fund s progress Another solution for SMBs and or plan sponsors is to choose pre selected packages This choice is particularly empowering and reassuring for participants In case a participant does not choose from one of the selected funds the plan sponsor is required to ensure that a default fund is selected on behalf of the participant The plan sponsor is also responsible for making sure that there is a process to review fund performance and remove those funds that under perform Selection Tools Once the CAP plan has been created participants will need to understand their roles and responsibilities For example they should understand how and why the plan has been created Any associated contribution limits available investment options and fees should be clearly defined They should also be made aware of the name of the service provider as well as the availability of calculators and other financial and research tools They

    Original URL path: http://www.smallbizadvisor.ca/group-retirement/a-quick-guide-to-dc-pension-compliance-141 (2016-04-26)
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  • Advising on group assets pays off in the end | Small Biz Advisor
    comes to me it does take a lot more work because I have to familiarize myself with funds I may not have seen before he says A client may have to give the advisor permission to access plan information Claude Leblanc senior vice president of group savings and retirement at Standard Life says that advisors should get access if they want to create a comprehensive plan for their client If the client has some years to work this could be quite a substantial part of the assets when considering full retirement planning he says When it comes to one specific client helping out pro bono until they remove their assets from the plan and invest with you is about as far as you can go However advisors may want to make working with insurance companies and plan sponsors part of their business For tips on prospecting click here Bruce Moir senior manager of product and services at ScotiaMcLeod says his advisors work with plan sponsors to develop DC options and then the company can choose to place their business with the bank ScotiaMcLeod has been doing this for years but any advisor could approach a company and offer their services A good first step is to connect with an existing client who has a position of influence in a company Maybe the advisor knows the head of HR or a CFO who says we need to look at our group plan can you help me says Moir Some advisors are more proactive in calling clients and saying they d like to get into that business Advisors at ScotiaMcleod usually go through the KYC process with employees and talk to plan members about their options It s a hands on approach says Moir adding that they work in teams rather than one advisor servicing hundreds of clients Leblanc says it helps if an advisor understands what it s like to work in a group RRSP context especially if they re helping design a plan They have to know something about corporate budgeting costs liabilities compliance and the ins and outs of that particular company They have to build the right design in a corporate context and develop a plan that would help make the company competitive in the work force he says If you want to work with group plans getting experience and then developing a good sales pitch is a good option What an advisor shouldn t do is call a client s employer and say they want to get involved on behalf of their client Almost 100 of the time an employer would say no says Moir The integrity of the plan has to remain with the plan sponsor You can t have 25 different people giving advice Moir points out advisors must document any off book advice they give a client because talking to clients about off book assets is generally frowned upon by regulators An IIROC spokesperson says it could be crossing a line though every situation

    Original URL path: http://www.smallbizadvisor.ca/group-retirement/advising-on-group-assets-pays-off-in-the-end-135 (2016-04-26)
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