March 2018 Edition

As announced in September 2017, our contribution management solution allows employees to enter their own special contributions on the secure participant services website. This feature also helps them manage their contributions and encourages them to set up automatic transfers to their group RRSP, TFSA or non-registered plan.

This functionality also makes your life easier! At the end of each bonus period, you receive a detailed report outlining your employees’ instructions on how to invest their bonuses. You can then use this report to make your remittances.

To simplify your administrative tasks even further, you could combine this solution with other contribution level management (CLM) and electronic data transfer (EDT) solutions.

To take advantage of this feature or any of our other tools, contact your client relationship manager or Plan Sponsor Services at 1-888-510-4762 This link will launch your default phone software..

If your plan includes Index Plus Lifecycle Paths, please note that on April 2, 2018, modifications will be made to the underlying funds of these paths. These modifications aim to further diversify the composition of the paths by optimizing the level of complementarity between the actively managed funds used within the Canadian and international equity components.

The changes put in place are as follows:

Canadian equities: Replacement of the Desjardins Canadian Equity GF (DGIA) Fund, previously the Fiera Canadian Equity Growth Fund, and of the CC&L Canadian Equity Fund by the Beutel Goodman Fundamental Canadian Equity Fund and by the CC&L Canadian Equity Growth Fund.

International equities: Replacement of the Mawer International Equity Fund by the Lazard International Equity Fund. The Baillie Gifford International Equity Fund remains in the paths’ composition.

For more information about these changes, please contact your client relationship manager.

As part of the periodic review, we will make modifications to the composition of our Multi-Management funds effective March 28, 2018. These modifications are in line with our management philosophy for these funds, which is to optimize the long-term expected return for a given level of risk. If your plan includes Multi-Management funds, this article will be of interest to you as well as their new target allocation.

The main changes affect the Funds’ fixed-income component. On one end, the Funds’ exposure to more specialized fixed-income mandates will now come through a multi-manager private credit fund, whose objective will be to maximize current income while limiting interest rate sensitivity. This fund will primarily target private strategies that can cover corporate loans, real estate debt and infrastructure debt, as well as other lower-liquidity assets, such as bank loans. The private credit fund will initially be made up of Canadian commercial mortgages (managed by Addenda), U.S. bank loans (managed by AlphaFixe) and Canadian corporate bonds (managed by Canso).

On the other end, the target allocation to foreign securities within the Funds’ fixed-income component will increase to 20%. The additional exposure will partly come through the private credit fund, as well as from the addition of the Desjardins Global Bond (Lombard Odier) Fund to the composition. The Desjardins Global Tactical Bond (PIMCO) Fund will also remain a part of the Multi-Management Funds. In connection with this change, the benchmark for the Funds’ fixed-income portion will now be made up of 80% FTSE TMX Canada Universe and 20% Bloomberg Barclays Multiverse hedged.

Furthermore, the Funds’ exposure to Canadian small cap equities will be removed, primarily due to the volatility of returns associated with this asset class and to its heavy concentration in certain sectors. The Funds’ exposure to small cap equities will instead come from global equity funds. In this regard, the Global Alpha Global Small Cap Equity Fund will be added to the composition, providing complementarity with the already present Desjardins Global Small Cap Equity (Lazard) Fund.

Finally, low volatility strategies will be added to the Funds’ foreign equity component, more specifically the Fidelity U.S. and international low volatility funds available on the platform.

These modifications do not result in a change to the pricing of the Multi-Management Funds. For more information about these changes, please contact your client relationship manager.

As part of its governance process, Desjardins Insurance evaluates each fund offered on its group retirement savings platform on a quarterly basis to ensure compliance with its selection criteria.

This evaluation is based on four main elements:

• Personnel
• Investment processes
• Compliance with the stipulated management style
• Performance

The result of this analysis is that some funds are placed on a watch list that is updated every quarter.

For each fund on the watch list, the areas of concern are identified and then closely monitored. Funds will remain on the watch list until the situation has been resolved, or in the event that the concerns persist, until they are no longer recommended or are removed from the platform.

Our fund watch list, including a list of funds no longer recommended, is published quarterly in the Your news section of the plan sponsor services website (dfs.ca/plansponsor External link. Opens in a new window. ).

Changes at Hexavest

On January 31, 2018, Hexavest announced that Jean-René Adam, co-Chief Investment Officer and portfolio manager, left the firm to pursue other projects. All strategies in which Mr Adam was involved as manager are managed by a team that will continue its activities. Vital Proulx will remain Chief Investment Officer for all of Hexavest’s investment strategies. The investment process will remain unchanged.

Nominations at Invesco

On January 30, 2018, Invesco announced changes to the Invesco Global Targeted Returns strategy’s portfolio management team.

Effective February 28, Gwilym Satchell was promoted from risk manager of the strategy to fund manager, bringing to four the number of managers of the strategy. Mike Marshall will take over risk management responsibilities. He was previously a risk analyst in the Multi Asset team and has worked closely with Gwilym Satchell.

The investment objective, philosophy and team’s three-step investment process will remain unchanged following these nominations.

Nominations at Epoch

In January, Epoch announced that Mike Welhoelter and Bill Booth were named co-Chief Investment Officers. They will join Bill Priest and David Pearl, both currently co-Chief Investment Officers. Epoch also created the ‘’Office of the CIO’’, composed of these four individuals and which constitutes the leadership of the firm in terms of investment. All CIOs will keep their current portfolio management responsibilities.

Changes at Mawer

Also in January, Mawer announced that effective March 31, Paul Moroz, CFA, will assume the role of Chief Investment Officer for the firm. Jim Hall, CFA, who has held the CIO responsibilities since 2004, will continue as Chairman of the Board of Directors and as co-manager of the Canadian Equity and Global Equity strategies.

Also effective March 31, Christian Deckart, CFA, PhD., will assume the role of Deputy Chief Investment Officer for the firm and continue his role as lead-manager of the Global Small Cap strategy and co-manager of the Global Equity strategy.

After ten years as President of the firm, Michael Mezei plans to retire from Mawer Investment Management. Mr. Mezei will remain in his role as President until a successor is in place, likely by the end of 2018, and will continue serving on the firm’s Board of Directors at least until the end of 2019. A succession committee is in place to guide the selection process for the new President and a precise retirement date and successor will be shared once plans have been solidified.

Scotiabank to Acquire Jarislowsky Fraser

On February 12, 2018, it was announced that Scotiabank will acquire Jarislowsky Fraser, one of Canada’s leading independent investment firms. Following the announcement of the acquisition and the details surrounding it, we are relatively reassured based on the information that was communicated. In the short term, we will meet with Jarislowsky Fraser’s management in order to identify the impacts on the funds offered on our platform.

According to the announcement, the firm will maintain its independence and its investment approach will remain unchanged. Moreover, the majority of the partners have agreed to invest half of their proceeds from the closing of the transaction into Jarislowsky Fraser’s investment strategies. The strategies’ returns will therefore have a direct financial impact on them. Finally, Jarislowsky Fraser’s management team will maintain its headquarters in Montreal.

We will however remain attentive to the medium and long term impacts and will communicate any relevant information related to the potential impacts of the transaction.

Nomination at Fidelity

It was announced that Vadim Zotnikov will join Fidelity in the second quarter of 2018 as head of the Global Asset Allocation group. Nancy Prior previously held the role and will continue to manage the fixed income team. Fidelity confirmed that the change will have no direct impact on the daily management of the Fidelity Canadian Balanced Fund and the Fidelity ClearPath target date funds.

"What’s a PAD?"

A pre-authorized debit payment (PAD) is an authorization you give to Desjardins to withdraw the contribution amounts from your company’s bank account when you remit contributions to your plan.

“Why should I change my actual method to PAD?”

Because it’s quick, easy and reliable. A PAD payment is automatically triggered when you send us your contribution list and the exact amount is withdrawn from your account, saving you the extra step of actually sending in the contributions (by cheque, e-transfer or online payment). Two steps are combined in one and your payment and the contribution total will always balance.

“Not sure I want Desjardins to make withdrawals directly from our bank account.”

You control when the withdrawals are made and how much is withdrawn, since the PAD is triggered when you send in contribution list. It is important to note that the PAD doesn’t permit any other types of transactions to be performed in your account.

“How can I sign up?”

Simply fill out the PAD for businesses form, available in the Forms section at dfs.ca/plansponsor External link. Opens in a new window. . You can also get the form by writing to grs_plansponsor@dfs.ca or by calling Plan Sponsor Services at 1-888-510-4762 This link will launch your default phone software., from 8 a.m. to 5 p.m. (ET), Monday to Friday.

Desjardins has been front and centre in recent weeks. We have received three prestigious distinctions.

Desjardins Private Wealth Management named Best Private Wealth Management Company in Canada

Desjardins Private Wealth Management was just named Best Private Wealth Management Company in Canada for a third straight year by The Global Banking and Finance Review. After a rigorous qualitative and quantitative assessment, Desjardins Private Wealth Management was selected for its comprehensive range of products and services, its investment strategy, financial strength and customer experience.

Desjardins’ Guy Cormier tops the list of Quebec executives

Earlier this year, Guy Cormier, President and CEO of Desjardins Group was ranked number one in Quebec’s Finance et Investissement annual Top 25 ranking of the national financial services institutions. The category recognizes 25 executives and senior executives living and working in Quebec who have stood out over the last year. “I’m proud of this recognition,” said Mr. Cormier. “This award encourages us all to continue our efforts to make Desjardins Group even more simple, modern, people-focused and high-performance to the benefit our seven million members and clients.”

Desjardins named one of Canada’s Top Employers for Young People

In February, Desjardins was once again named a top employer in Mediacorp’s annual ranking External link. Opens in a new window. of organizations who are leaders in using innovative practices to attract, train and retain younger workers. The competition also recognizes organizations that are committed to supporting youth at the community level.

There’s good news for Quebec workers: the Quebec Pension Plan (QPP) is being enhanced to increase pension benefits for a more comfortable retirement. One of the changes is an increase in the income replacement rate from 25% to 33.33%. Even so, that’s well short of the 70% retirement income target—which means employers still have very good reasons to offer their employees a retirement savings plan.

Highlights:

• The QPP will now have two components: The basic plan, which dates back to 1966, and the additional plan, which will be rolled out in 2019.
• Pension amounts will be increased, with the income replacement rate rising from 25% to 33.33%.
• There will also be corresponding increases to disability and surviving spouse’s pensions.
• Contributions will increase over seven years (2019 to 2025).
• There will be a 14% increase to maximum pensionable earnings (MPE), which is the maximum salary on which contributions can be made.

For more information, refer to the summary External link. Opens in a new window. on the Retraite Québec website or read the bill External link. Opens in a new window..

Mrs. Rose Camilleri, of Abbotsford, British Columbia is the winner of the "Win $3,000 in 90 seconds!" contest. She will receive a $3,000 deposit to her group retirement savings plan. Congratulations!

Let’s keep talking up the videos. Participants are interested

Our personalized videos have been a hit since their roll-out last June. The contest really boosted visibility and increased the views.

Even better, nearly a quarter of those who viewed the videos then made changes to their retirement savings strategies. Some filled out their personal data in On Target Retirement®, our retirement income calculator, and others started contributing or increased their contributions. Still others changed their retirement scenario to be more realistic.

Our animated videos star Penny, our friendly virtual financial guide. She’s in a coffee shop where she talks to participants directly, using financial information they’ve provided in On Target Retirement. She talks about their retirement income, plan contributions and financial goals. Depending on their situation, she might congratulate them on reaching a milestone or ask them to update their information. Participants who follow her recommendations could get a new personalized video.

Need more information?

Check out the article about personalized videos that was published in essential last June, call us at 1-888-280-2447 This link will launch your default phone software. or talk to your client relationship manager.