An in-depth look at this and other subjects in the current issue of the Morneau Shepell News & Views
TORONTO, April 26, 2019 /CNW/ - Morneau Shepell has released the April 2019 issue of its monthly newsletter, News & Views, in which the company looks at the following topics:
- Interim report on national pharmacare published by Advisory Council – On March 6, 2019, the Advisory Council on the Implementation of National Pharmacare released an interim report that identifies major prescription drug challenges, sets out core principles that should underpin the approach to national pharmacare, and provides initial recommendations. In the interim report, the Advisory Council recommended the establishment of an arms-length agency to manage and oversee national pharmacare, a national drug formulary and investments in drug-related information technology systems to meet the goals and objectives of national pharmacare.
- Ontario government amends OHIP+ drug program for children and youth – Changes to the Ontario Drug Benefit program for children and youth aged 24 years and under came into effect on April 1, 2019, after having first been announced by the provincial government in January 2019. Under the changes, children and youth aged 24 years and under who have private plan coverage are no longer eligible for OHIP+, while those who do not have a private plan will continue to be automatically covered by OHIP+, including free access to more than 4,400 prescription drugs.
- Quebec Survey of Total Compensation findings released – On February 7, 2019, the Institut de la statistique du Québec (governmental statistics agency of Quebec) issued the results of the 2017 Survey on Total Compensation, which looked into pension and savings plans offered to employees. The survey found that 83.1 per cent of the organizations surveyed sponsor at least one savings or pension plan and that 91.9 per cent of permanent, full-time employees in these organizations have access to a savings or pension plan. The survey compared the costs associated with maintaining pension plans in the public versus private sectors and in unionized versus non-unionized environments, as well as the costs associated with defined benefit plans compared to defined contribution plans.
- Nova Scotia introduces Bill 109 – On March 12, 2019, the Nova Scotia government introduced Bill 109, which permits the use of buy-out annuities and includes measures aimed at reducing funding volatility for defined benefit pension plans. While the bill does not affect the requirement to fully fund solvency liabilities, it permits the use of reserve accounts to hold payments in respect of a solvency deficiency or other prescribed contributions and letters of credit to cover solvency special payments for up to 15 per cent of solvency liabilities. It also provides a full discharge of the obligation to pay pensions upon annuity purchase by pension plans.
- FSCO releases FAQ document on defined benefit funding reform – The Financial Services Commission of Ontario (FSCO) published a frequently asked questions (FAQ) document on March 8, 2019, summarizing key points on the new funding rules for single employer defined benefit pension plans registered in Ontario, which came into effect on May 1, 2018. The FAQ document discusses the new investment categories to be used in describing a plan's target asset allocation in Statements of Investment Policies and Procedures, rules for calculating the provision for adverse deviation and requirements relating to plan text amendments.
- New FAQ document on annuity discharge requirements issued by FSCO – On March 8, 2019, FSCO released an FAQ document summarizing key points regarding the discharge of a pension for a former or retired defined benefit pension plan member for whom an annuity has been purchased. The Act permits the purchase of annuities in respect to DB pensions provided to former and retired members.
- Tracking the funded status of pension plans as at March 31, 2019 – Morneau Shepell describes the funded status of pension plans over the first three months of 2019 based on three typical investment portfolios. A graph shows the changes in the financial position of a typical defined benefit plan since the end of 2018. A table shows the impact of past returns on plan assets and the effect of interest rate changes on solvency liabilities of a medium duration pension plan.
- The impact of pension expense under international accounting as at March 31, 2019 – Morneau Shepell has shown the evolution of the pension expense for a typical defined benefit pension plan. Since the beginning of the year, the pension expense has increased by 17 per cent (for a contributory plan) due to the decrease in the discount rates, despite the good returns on assets (relative to the discount rate).
About Morneau Shepell
Morneau Shepell is the leading provider of technology-enabled HR services that deliver an integrated approach to well-being through our cloud-based platform. Our focus is providing everything our clients need to support the mental, physical, social and financial well-being of their people. By improving lives, we improve business. Our approach spans services in employee and family assistance, health and wellness, recognition, pension and benefits administration, retirement and benefits consulting, actuarial and investment services. Morneau Shepell employs almost 5,000 employees who work with some 24,000 client organizations that use our services in 162 countries. Morneau Shepell is a publicly traded company on the Toronto Stock Exchange (TSX: MSI). For more information, visit morneaushepell.com.
SOURCE Morneau Shepell Inc.
For further information: Cathren Ronberg, Morneau Shepell, 416.355.5632, [email protected]